Trusts find workaround solution for failed NHS provider

Pennine Acute Hospitals Trust’s board was taken over by directors from Salford Royal Foundation Trust in 2016, following an “inadequate” Care Quality Commission rating. But the trust, which has four hospital sites, has remained a distinct legal entity.

PAHT was due to be formally split up and disbanded from April 2020, with its hospitals in Oldham, Bury and Rochdale acquired by SRFT, and Manchester University FT acquiring North Manchester General Hospital.

But HSJ understands the negotiations over those acquisitions have been drawn out because of the number of parties involved, and because the trusts have been pushing for significant national funding support. There has also been debate over the future configuration of services.

This risked a delay to NMGH being controlled by MUFT, which is key to its planned “single hospital service” for the city of Manchester.

Instead, an interim arrangement has been agreed in which a new independent board will be appointed to PAHT, with North Manchester run by MUFT under a management agreement.

The hospitals in Oldham, Bury and Rochdale will continue to be run by SRFT, under the Northern Care Alliance banner, via a separate management agreement.

The PAHT board will be made up of directors independent to SRFT and MUFT, and it is understood they will not be involved in the day-to-day management of the hospitals.

The discussions have involved the North West regional directorate, as well as Greater Manchester’s devolution team.

SRFT and MUFT will continue to pursue formal acquisitions of the hospitals, but the agreement should now allow them to conduct separate negotiations with national bodies.

Both trusts are likely to push for significant revenue investment, as PAHT reported a deficit of £24m for the first six months of 2019-20. It also owes more than £150m to the Department of Health and Social Care, and has significant clinical negligence liabilities.

MUFT is also seeking around £500m of capital investment for NMGH, which has one of the worst estates in the country, while SRFT will seek to negotiate a smaller figure for the other sites. The NMGH project was allocated seed funding last year in a round of announcements by the prime minister.

A report to MUFT’s board today, presented by Peter Blythin, group executive director of workforce and corporate business, said: “Due to the complexity of the acquisition process and the challenges at PAHT, NHS [England/Improvement] decided that it would not be possible to complete the proposed transactions by 1st April 2020…

“The PAHT Board will be re-established with two management contracts in place for the operation of its hospital sites and services… The expectation is that formal transactions to make these arrangements permanent will be completed by April 2021 at the latest.”

According to a letter to staff, Dena Marshall, who currently runs Royal Manchester Children’s Hospital as part of MUFT, will be appointed as chief officer of NMGH.