Trust chief quits after funding row with ICS

Caroline Donovan, of Lancashire and South Cumbria Foundation Trust, has been in negotiations with NHS England over taking up a secondment post with the national mental health team. This has now been confirmed in a message to staff this afternoon.

Sources with knowledge of the situation told HSJ there have been significant tensions with the local integrated care board in recent months over the trust’s finances.

It is understood Ms Donovan and the trust board previously agreed to target efficiency savings of around £19m (5 per cent) this year, but were then told by the ICB to seek additional savings on top of this, to cover the costs of out-of-area placements, which are expected to come to around £15m.

OAPs had previously been largely funded by commissioners, the trust said.

Sources said there was a view among some that Ms Donovan had not been supportive of system-wide issues and a system approach, and that trust chair David Eva eventually sided with the ICB.

Difficulties in meeting the financial plan are apparent in early-year financial reports, with the trust already reporting a deficit of £7m in the three months to July, which was more than £3m worse than planned.

Finance director Jenny Hannon has been on leave for several months, which the trust said was due to personal health reasons.

LSCFT is one of England’s largest mental health trusts, with an annual turnover of around £470m.

In a message to staff this afternoon, Ms Donovan said she will be taking up a national secondment role, to support the mental health urgent and emergency care strategy for winter. She said she had been planning to retire in the near future, so would not return to the trust.

Ms Donovan took over LSCFT in 2019, when the trust was struggling with a severe shortage of inpatient bed capacity, a lack of investment in community services, and some deep cultural problems.

She played a central role in convincing former commissioners and regional leaders of the need for major investment, and there has been evidence of significant progress in the last three years.

The trust has had some of the most improved scores in the staff survey in that period, and a recent Care Quality Commission inspection found its previously troubled urgent care services were largely performing well in difficult circumstances.

Additional funding

Lee Morgan, secretary of the trust’s branch of the Unison union, told HSJ Ms Donovan had been an overwhelmingly positive leader for the trust, and was supported by the vast majority of staff.

He said: “There were a lot of problems internally before Caroline came in, and she managed to clear out a lot of people whose behaviours and management approach were not good for the trust. She brought in a whole new team of execs and the approach they all took was a breath of fresh air.

“She’s managed to secure a lot of additional funding, which we’d always been told previously wasn’t available, and that’s made a massive difference. Caroline wasn’t willing to make cuts and my concern now is that the next person who comes in won’t have the same attitude.”

He believed a minority of managers had found Ms Donovan’s style too robust, and “if she expects something to be done, you have to do it”, but said this was “completely appropriate” to expect of “well-paid people”.

Lancashire and South Cumbria ICB, led by chair David Flory and chief executive Kevin Lavery, declined to comment. The LSC system is one of the most financially challenged in the country, and all systems have been told they must reach a breakeven position in 2022-23.

In the message to staff, seen by HSJ, Ms Donovan said: “I am incredibly proud of the many achievements of the executive team, and our wonderful leaders and staff. Their determination to improve and transform services and manage the pandemic in the most difficult circumstances has been exemplary…

“Whilst I am sad to be leaving, I leave with full confidence in the staff of the trust. I am delighted that I will be working with the NHSE national mental health team, continuing to support improved access and better services for people with mental health needs.”

Mr Eva, the chair, referenced her “unstinting commitment” and noted several major achievements such as overseeing the acquisition of services in south Cumbria, a successful restructure of the trust, building strong relationships with partner organisations, and spearheading “a truly inclusive and patient-centred approach”.

Ms Donovan is expected to stay on at the trust for several more weeks, with deputy CEO Chris Oliver due to step in on an interim basis. The trust will also be seeking a new chair, as Mr Eva’s term is due to end in December.

Ms Donovan previously led North Staffordshire Combined Healthcare Trust to an “outstanding” rating from the CQC.