FINANCE: Talks are under way regarding a potential merger for Heatherwood and Wexham Park Foundation Trust, which has also secured bail-out funding for 2012-13.

An HSJ analysis on the future of acute services in the Thames Valley area has revealed that the troubled trust, which finished 2011-12 with a £13.5m deficit, is expecting a £12m deficit this year, and is not likely to return to financial balance for three or four years.

The trust is in discussions with neighbouring trusts Frimley Park Foundation Trust, Hillingdon Hospitals Foundation Trust, the Royal Berkshire Foundation Trust and Buckinghamshire Healthcare, along with commissioners and the South of England strategic health authority over its future.

Mergers with Hillingdon Hospitals, Buckinghamshire Healthcare and Frimley Park have been mooted, and talks are currently focussing on the Hillingdon trust. However board papers for that trust reveal that rising demand and caps on income from commissioners are threatening its viability, and local sources consider a deal unlikely, as Heatherwood and Wexham Park’s financial problems could be  severe enough even to sink a merged organisation.

Senior local sources predict that Heatherwood and Wexham Park will instead receive further bailouts over coming years as it returns to long-term viability, opening up the possibility of another merger in around 2016.

In the meantime, services will be reconfigured across the health economy, with a focus on south Berkshire, where new clinics run by the Royal Berkshire and Frimley Park are competing for Heatherwood Hospital’s elective services.

Heatherwood is likely to either be sold off or run by a new partner organisation, in a bid to bring new capital investment to the site. It is not yet known whether the takeover or partnership will come from the private or NHS sectors. In future services on the site could be provided by a range of organisations.