Merging trusts target £20m annual savings

Taunton and Somerset Foundation Trust and Somerset Partnership FT are targeting yearly savings of £19.3m after merging, although they do not expect the savings to materialise before 2024-25. The savings are expected within emergency care, elective care and support services. 

The trusts have committed to making cumulative savings worth £51.3m by 2024-25 if the merger is completed this financial year. Chiefs had initially planned to merge the trusts this autumn.

The new savings details have been set out in a summary of the trusts’ business case for the merger, which was published earlier this month. The trusts told HSJ they could not release the full business case, which has been sent to NHS England/Improvement, due to purdah.

Both trusts are forecasting small surpluses in 2019-20. But, according to the business case, both trusts’ finances will “deteriorate” if they continue to operate as separate organisations.

Under this scenario, Somerset Partnership FT – the community and mental health trust – would forecast a deficit of £3.2m by 2024-25 while Taunton and Somerset FT’s deficit would stand at £15.4m.

However, if the trusts merge, savings will be achieved by reducing the number of emergency attendances, unplanned admissions and outpatient appointments compared to the levels expected without the merger taking place – the business case states.

It states: ”We expect to secure these benefits as a result of increasing the care provided at neighbourhood level, integrating and streamlining patient pathways that span the two trusts, and increasing advice and support to primary care.” Efficiencies will also be made by “consolidating support services”.

The business case states the merged trust, which will be called Somerset FT, is forecast to deliver a surplus from 2024-25 and onwards, “following a period of investment in the new models of care”.

Both trusts said they could not comment further due to purdah.

The cost of the merger is expected to be £1.7m in revenue and £1m in capital, which would be met by the trusts. NHSE/I has told them the Competitions and Markets Authority does not intend to carry out a review of the merger. 

The trusts have shared a leadership team since creating an alliance in 2017. The business case states the trusts have seen a reduction in spending on agency nurses as a result of “improved recruitment” following the alliance being established.

The business case also reveals the trusts discussed a “three-way” merger which would have also incorporated Yeovil FT, but this was rejected. According to the document, Yeovil wanted to maintain its independence and there was a feeling among the county’s NHS chiefs that such a move would be too complex and risky, as well as raising potential competition issues.

Yeovil FT was approached for comment.