• Colchester and Ipswich complete merger to form East Suffolk and North Essex FT
  • New trust targeting £28m deficit for 2018-19 on revenues of £673m
  • New trust is key provider for new integrated care system

Colchester Hospital University Foundation Trust and Ipswich Hospital Trust have completed their merger to create East Suffolk and North Essex Foundation Trust.

The new trust came into existence as a legal entity on 1 July after setting out formal merger plans last summer.

It will be a key provider in the Suffolk and North Essex Sustainability and Transformation Partnership which was named in May as one of 10 new integrated care systems.

The new trust is targeting a deficit of £27.9m for 2018-19, according to a budget discussed at the trust’s inaugural board meeting on 5 July.

Hitting this forecast deficit position would trigger £19.9m from the Sustainability and Transformation Fund. But it is, however, predicated on a significant savings target of £40.5m, around six per cent of its projected £673.4m turnover. Both legacy trusts had similar revenues, of around £300m, in 2017-18 and both were running deficits.

The merger was prompted by concerns about how to address performance and quality at Colchester, which was in special measures, and to try and secure financial stability for both mid sized providers.

Colchester came out of special measures in November 2017 after four years in the performance regime – longer than any other trust. It was rated requires improvement. The rating represented a significant boost for the trust, which was nearly liquidated in 2016, according to one senior source, because of the dire state of its quality and operational performance.

Ipswich has been a stable performer in terms of quality for a number of years and was rated good by the Care Quality Commission in January 2018.

The trust will be a key provider in the Suffolk and North East ICS – a designation which also represented a major boost for the Suffolk and North Essex STP, which is led by the newly created trust’s chief executive Nick Hulme.

It was announced the STP was one of four areas to become ICSs in May, taking the total number of ICSs to 10. The other three new ICSs announced in May were Gloucestershire, West, North and East Cumbria, and West Yorkshire and Harrogate.

A paper to a joint board meeting of NHS England and NHS Improvement in May said: “These systems demonstrate strong leadership teams, capable of acting collectively, and with an appetite for taking responsibility for their own performance.

“They have also set out ambitious plans for strengthening primary care, integrating services and collaborating between providers. Although they experience the operational and financial pressures that other systems do, our assessment is that they are more likely to improve performance against NHS Constitution standards and clinical and financial sustainability by working together as a system.”

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