London's primary care trusts are hoping a high profile bailout of the capital's historic debt will demonstrate they can work together - and avert the threat of mergers.

NHS London last week announced plans to pay off the debts of 11 trusts and one PCT, expected to total£579m by 2011.

The proposal has been agreed by PCT directors and is going before boards this month.

The announcement follows sceptical comments by health secretary Alan Johnson, who told HSJ 31 PCTs in the capital did not seem "the most sensible arrangement".

There are concerns the PCTs lack commissioning capacity and cannot attract the expertise for service reform. NHS London began a "strengthening commissioning" programme earlier this year by asking PCTs to suggest solutions.

In response they are setting up a regional level support "hub" and, in seven geographical sectors, joint commissioning arrangements.

Building capacity

Wandsworth teaching PCT chief executive Ann Radmore, PCT lead for the debt proposal, said they believed they could develop the capacity without merging, and solving the debt problem could show that. She said the challenge was whether the 31 PCTs could develop a solution, explain it and agree it.

Strategic health authority finance director Paul Baumann told HSJ agreeing the debt solution would show PCTs were co-operating more successfully.

"This would not have happened in this form if we had not had [the] strengthening commissioning [programme]," he said. "I have been here for 18 months and when I was first here I did not see that sense of knowing how to collaborate."

Mr Baumann is among senior figures who have downplayed speculation about PCT mergers in the capital. He said: "As far as we are concerned there is not another agenda on the table at the moment."

NHS chief executive David Nicholson also told HSJ: "London needs to get a better way of managing itself than it is doing now. But that doesn't mean structural change."

The payoff will be funded by£304m from NHS London topsliced from PCT allocations in previous years and£275m from a 1.3 per cent levy on allocations in the next two years, excluding the five PCTs still repaying their own debts. The funds will be released when trusts begin to act on newly approved turnaround plans.

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