The must-read stories and debate in health policy and leadership

VAT’s not allowed

The establishment of wholly owned subsidiary companies by NHS trusts has become a hot topic.

Unions and left leaning politicians have criticised the moving of non-clinical staff into such companies, while others argue it enables cash strapped trusts to deliver VAT efficiencies and explore commercially beneficial solutions.

Perhaps understandably, given the fiery nature of this debate, there has been little comment or action from the powers that be so far.

That is set to change.

The Department of Health and Social Care is working with NHS Improvement to increase their oversight of trusts’ use of wholly owned subsidiaries, which will allow for “timely intervention” if necessary.

It is not yet clear how this increased scrutiny will work in practice, and NHS Providers has warned against trying to reduce the autonomy of foundation trusts in this regard.

While an outright change of legislation to require FTs to seek approval from the centre before establishing companies seems unlikely, a strengthened assurance process by NHS Improvement could slow down the process and potentially introduce extra stumbling blocks.

FTs with plans to create companies during the next two years will be watching closely for more details.

NHS Improvement said a “short consultation” would be launched, but the regulator did not specify when.

Third private hospital in special measures

A private provider was dealt another blow this week when it had a third mental health hospital judged “inadequate” and placed in special measures.

The Care Quality Commission rated the Huntercombe Hospital Roehampton as “inadequate” overall following an unannounced inspection in May.

It is the third mental health unit run by Huntercombe Group to be given the worst overall rating and placed into the special measures regime since mid 2016.

Huntercombe Hospital Stafford was rated “inadequate” and placed in special measures by the CQC in August 2016, but has since been upgraded to “requires improvement” and taken out of special measures.

The watchdog also rated Huntercombe’s Watcombe Hall specialist child and adolescent mental health hospital in Torquay “inadequate” and placed it in special measures in July last year. It was closed in August 2017.

The group was also told in May to improve its corporate governance by the watchdog following concerns being raised about its hospitals.

It is a big blow for the group, which was set up in Scotland in the 1990s and is a much lesser known provider than the Priory Group and Cygnet.

In a statement, the Huntercombe Group said that 68 per cent of its 25 registered hospital and specialist care centres were rated either “outstanding” or “good”.

But having three hospitals rated “inadequate” and placed in special measures is not normal and the organisation has been given six months to make improvements at the Roehampton site.

If it does not, the CQC deputy chief inspector Dr Paul Lelliott was quite clear that the watchdog could take further action – including potentially closing down the unit.

And having a second unit closed by the CQC would definitely not be normal.