The Department of Health and Treasury have approved a process that could lead to a second district general hospital trust being franchised to a private company.
Board papers published by the NHS Trust Development Authority reveal George Eliot Hospital in Warwickshire could now pursue a path that might see a merger with another trust or a franchise like the one that saw Circle Health take over Hinchingbrooke Health Care Trust in February last year.
HSJ understands the DH was happy to let the trust start a process that could lead to franchising but was awaiting approval from the Treasury for the “dual-track” approach. This has now been obtained, the authority confirmed.
The report, by NTDA director of delivery and development in the Midlands and East region Dale Bywater, said: “It would be prudent to expect the service commencement with the strategic partner can begin on 1 April 2015.”
As an NHS trust George Eliot is accountable to the NTDA. Mr Bywater’s report recommends the body’s board approves the commencement of the process to find a strategic partner at a meeting due to take place on Thursday.
The document says an evaluation had found “that the specific business management model of a potential partner was more important than its organisational form in securing sustainability”.
“Therefore there is no preferred organisational model and an open procurement should take place in order to test a wide range of innovative proposals from both NHS and independent sector providers,” it adds.
In December the trust said: “It is in the best interests of the hospital, its patients and staff to seek a partner via a competitive procurement process” and that options included the trust being taken over or its being run as a franchise, along the lines of Hinchingbrooke Health Care Trust’s arrangement with Circle Health.
Among the organisations who have indicated an interest in running George Eliot are Circle Health, Serco, Care UK, South Warwickshire Foundation Trust, the Dudley Group Foundation Trust and Burton Hospitals Foundation Trust.
An NTDA spokesman said: “The most important thing for the patients of George Eliot and the people of Warwickshire is to secure its long term sustainability. It has a history of quality and financial issues, needing more than £100,000 a week of external support to break even over the last two years.
“Money should be spent on patient care not on servicing debt. George Eliot would undoubtedly need on-going support in future years if it continues in its current state. The scale of savings required in the future means this is unlikely to be achieved in its current form.
“That is why the NTDA is helping the trust to find an alternative provider within the NHS or, if necessary, the independent sector to ensure high quality, sustainable care.”