STRUCTURE: Two mental health trusts are considering a merger against the backdrop of commissioners who plan to de-fund secondary community services for ‘most’ mental health conditions.

A report setting out the options for merger between South Essex Partnership and North Essex Partnership University foundation trusts said commissioners in the county planned to shift provision into less specialist care.

The strategy paper from North Essex said: “All Essex clinical commissioning groups plan to shift income from specialist mental health services into increasing access to psychological therapies [services], by decommissioning secondary community services for most patients in non-psychotic mental health clusters.” IAPT services are a less specialised form of mental health care designed to address less severe illness for a larger patient population.

The report said the “shrinking market” for mental health services in the county, combined with increased competition from other providers had prompted both organisations to think about a merger.

The document, presented to the board by North Essex director of strategy Mike Chapman, said: “We are acutely aware that the political, social, economic and commissioning environment in which [both trusts] operate means that now is the time to consider whether a new organisational form might better serve the interests of the residents of Essex.”

He added that North East London FT securing of an Essex-wide contract for young people’s wellbeing and mental health services in June had “called into question the size of the [Essex] trusts and their capacity to absorb the cost and complexity of developing successful bids independently”.

The document outlined the strengths and weaknesses of both trusts.

North Essex had “historic financial stability” and a “spread of clinical expertise”. However, it also noted a “lack of critical mass with consequences for FT transaction rules”, “cost base flexibility compromised by number of highly graded expert senior staff” and “historic difficulties with patient information systems/IT”.

The report said South Essex had a strong “brand” and good clinical and financial performance. Under weaknesses, it said: “[The] costing of recent bids suggests that we will not be price competitive if we are unable to change traditional staffing models.”

It added that the organisation’s “forecast reduction in contract income requires downsizing/reconfiguration of corporate infrastructure”.

Analysis of the options open to the trusts concluded that merging with another organisation outside of the county – such as North East London FT or Norfolk and Suffolk FT – would be too slow and could dilute the focus on patients and carers in Essex.

The paper said the merger between the Essex FTs could be completed within two years.

The expected benefits include “estates rationalisation… back office staff rationalisation in HR, workforce development, finance, procurement, quality, risk management, organisational development and strategy”.

The proposal was approved by North Essex’s board and a “strategic options case” for the merger will be submitted to Monitor.

The trusts have been approached for comment.