Concerns for frontline services funding under new contract

Liverpool Community Health Trust is in the process of being split up after a catalogue of serious care and governance failings between 2011 and 2014, which were likened to those at Mid Staffordshire FT.

Following a procurement process, Bridgewater Community Healthcare Foundation Trust has been named preferred provider for Liverpool element of the services, after agreeing it could deliver the contract on £77m of recurrent annual funding.

But HSJ understands that Mersey Care FT, the other bidder, was firmly of the view that this level of funding would make it impossible to deliver the services safely. It believed the services required recurrent funding of £81m.

The services set to transfer to Bridgewater next financial year are being run with £77m of recurrent funding during 2016-17, along with £4.6m of non-recurrent funding.

Although Liverpool Clinical Commissioning Group has offered to replicate the £4.6m of non-recurrent funding again in 2017-18, reducing to £3.6m in 2018-19, concerns remain over the funding levels from 2019-20 onwards, once the non-recurrent element expires.

A recent LCH board paper stressed that reinvesting the funds would ensure funding in operational services “remains consistent”, and HSJ understands the trust’s interim leadership have raised concerns about the future funding envelope. 

Tony Woods, head of strategy and outcomes at Liverpool CCG, said the contract offer for 2019-20 was not yet determined, but said there will be “significant opportunities to deliver efficiencies” through Bridgewater’s partnership with the social care services and the city’s GP federation.

He added: “There are also significant switch off costs released by the dissolution of Liverpool Community Health that are factored in.”

Investigations into failings at LCH prior to 2014 found significant cuts were made to frontline services as the board sought to meet their financial targets and obtain foundation trust status.

And a senior NHS source in the region told HSJ that cost-cutting efforts since 2014, under the trust’s interim leadership, have focussed heavily on back office areas, so there are doubts over the level of future savings that can be delivered without reducing frontline care.

The source, who spoke only on the condition of anonymity, said: “The shrinking pot of funding under the new contract will mean the services staring off a cliff edge when the non-recurrent funding gets switched off.

“The concern is that this will be back to the future, and we’ll see all the same problems returning.”

As well as the efficiency savings required by the withdrawal of non-recurrent funding, Bridgewater will have to deliver the standard efficiency savings expected of all trusts.

Rosie Cooper, MP for West Lancashire, who helped expose the previous failings at the trust, said: “The CCG need to justify their reasons for not maintaining the current budget or even increasing it given the recent history of the trust.

“Their transformation plan for the future of Liverpool’s hospitals depends on getting services out into the community - a community service the CCG themselves are pushing to the brink.”

A spokesman for Bridgewater Community Healthcare NHS Foundation Trust said its partnership with the council and city GPs will create a “range of co-location and joint working opportunities to reduce inefficient hand-offs and duplication whilst improving patient care; doing that faster than is currently possible”.

He added: “Economies of scale, widespread adoption of technology and optimal use of the estate will also provide us with a strong base to ensure that high quality services are delivered for the people of Liverpool whilst non-clinical costs continue to reduce.”

As part of the same procurement process, Mersey Care was chosen as the preferred new provider for community services in Sefton, which are also currently run by LCH.