COMMERCIAL: Plans to merge two Cornwall providers have been put on hold after a study of the proposals for further joint working said a merger would not be feasible in the short term.

A future reconfiguration has not been ruled out.

The merger of mental health provider Cornwall Partnership Foundation Trust and community services provider Peninsula Community Health, a social enterprise, would have required upfront costs which the trusts could not currently afford, HSJ understands.

While the feasibility study has not been made public, HSJ understands that a multimillion pound sum would have been needed to bring the two organisations together and satisfy regulatory requirements.

Questions over who would absorb Peninsula Community Health’s potentially outstanding financial liabilities also remained unresolved.

The two organisations commissioned the study in July, carried out by GE Healthcare Finnamore, to examine the benefits of working closer together.

The leaders of the two providers told HSJ last year that financial pressures and the need to secure sustainable futures were some of the motivations behind the merger proposal.

Steve Jenkin, chief executive of Peninsula Community Health, said last summer: “I think it’s fair to say in Cornwall there are financial challenges at this moment in time for all providers.”

He added that the integration project would be examining how back office functions like IT and procurement could be rationalised, as well as some clinical work.

The £87m-turnover organisation was created by NHS staff in 2011 to take over a number of community services from NHS Cornwall and Isles of Scilly Primary Care Trust as part of the Transforming Community Services programme.

If a merger does eventually go ahead, it would be the first time a social enterprise has been taken back into the NHS.

Cornwall Partnership FT took on the provision of community physical health services for children and young people in 2011.

Mr Jenkin said of the proposed merger: “It hasn’t worked out in terms of structural change [this time], but we will continue working together, particularly working with local GPs.”

In a joint statement Phil Confue, chief executive of Cornwall Partnership, and Mr Jenkin said: “Last year a lengthy and full study was conducted to look at closer clinical working and the financial implications of Peninsula Community Health and Cornwall Partnership Foundation Trust becoming a single organisation.

“As a result of this piece of work, it is now apparent that a full formal ‘merger’ will not be taking place imminently.  

“Our organisations remain committed to providing high quality healthcare services and continue to support NHS Kernow’s vision for integrated healthcare as part of a sustainable NHS for the benefit of people’s health and wellbeing across Cornwall and the Isles of Scilly”