FINANCE: The preferred bidder to take over North Cumbria University Hospitals Trust has estimated it needs the government to pump £78m of financial support into the troubled trust over the next two years.
Details of the acquisition bid were released by NCUH yesterday, in response to an on-going furore in Cumbria over the trust’s selection of Northumbria Healthcare Foundation Trust as preferred takeover bidder.
Community and mental health foundation trust Cumbria Partnership – whose bid in “alliance” with Newcastle Hospitals lost out to Northumbria – has argued that the decision lacked transparency, and was a missed opportunity to integrate care in Cumbria.
In response, NCUH has released a summary of its bid evaluation, showing that the trust board ranked the alliance proposals third, behind both Northumbria and University Hospitals of Morecambe Bay. This is despite the latter trust dropping out of the bidding to deal with the fallout of the care quality scandal in its maternity services.
Newcastle Hospital chief executive Sir Len Fenwick, commenting on the revelation, said: “In [light of] the reality of our experience of this process, nothing comes as a surprise.”
He added that the trust was “disappointed that a strategic decision has been made by a failing organisation, rather than [through] a more top-level approach that would reflect government policy” on integrated care.
The NCUH document said Northumbria’s bid scored highest on both financial and non-financial criteria, because it identified “more opportunities for service development, including development of integrated services”. It said the alliance proposals did not “fully demonstrate” the advantages of “single integrated pathways from primary to tertiary care”, and lacked “clarity” about Newcastle’s proposed contribution.
Cumbria Partnership chief executive Stephen Dalton said: “I welcome some light being shone on this secretive process but we do remain concerned that those of us living and working in Cumbria still have no idea how our health services will change as a result of this decision.
“We were offering to invest £60m over the next five years to fully integrate hospital and community health services in the county. Our proposals to develop the Great North Children’s Hospital and a Northern Centre for Cancer Care in Cumbria were genuine.”
The NCUH document said that while the local press in Cumbria had suggested there were “large scale investments in specific services in the unsuccessful bid this was not supported by any evidence”.
On finances, the alliance bid estimated it would need £105m of exta funding above current contracted levels to run Cumbria between 2012-13 and 2017-18 and a further £14m after that. Northumbria estimated it would need £68m revenue support and public dividend capital next year and £10m in 2013-14, but no further extra funding after that.
A leaked KPMG “due diligence” report commissioned by NCUH in December, estimated there would be a “downside case” hole in NCUH’s finances of £46m in 2013. It noted that NCUH’s plans for a £1m surplus in 2013 depended on £23.1m additional support from NHS North West, a £7.4m increase in its contract, and savings of £16m, or 7 per cent of forecast income. The report also noted that £3.4m NCUH had received for works on a new hospital had been “spent elsewhere”.
An NCUH spokeswoman told HSJ the KPMG report was, by necessity, a “worst case scenario”. “This is a scenario which is always tested in the NHS, but rarely happens,” she said. She added that, as approvals had been delayed for the West Cumberland Hospital “the cash has been used internally as a temporary measure”, but that did not mean it would not be available for the rebuild.