Trust merger in doubt after failure to secure capital funding

The latest board papers from Luton and Dunstable Hospital FT said it had not been successful in its most recent capital bid from NHS England, which is heavily linked to its acquisition of Bedford Hospital Trust.

The papers also said plans were being made “in the event that the hospitals do not merge”.

A Luton and Dunstable spokeswoman said: “Owing to a delay in a decision about the capital funding request, the proposed merger will not take place on April 2019.

“We anticipate receiving further news [about the capital bid] by the end of March and once we have received this information the boards will consider a new date [for the merger].”

Luton and Dunstable Hospital FT announced plans to acquire BHT in September 2017. At the time, it said it planned to complete the merger by April 2018. This was then pushed back to April 2019 after it said financial agreements with NHS Improvement were “not yet in place”.

HSJ understands the acquisition will only go ahead if Luton receives the £150m of capital investment it has asked for.

There are now board-level discussions about how the two trusts will work together if the merger does not proceed. The February board report said: “In the event that the hospitals do not merge it is anticipated that pathology [operating model] will move to a joint venture arrangement. In terms of IT, the spend is already agreed to create a hard link to connect the two sites.”

It also said: “Following submission of the sustainability and transformation partnership capital bids in July, which included the (Luton & Dunstable) acute services block/merger bid as the first priority, the approvals in respect of the wave 4 STP capital bids were announced in December. The L&D’s bid was not approved.”

The trust’s spokeswoman said: “Both NHS England and NHS Improvement are currently exploring other opportunities for capital funding for this particular merger project.”

The Treasury’s spring statement is due out before the end of March, but it is not clear if this will also include the 2019 spending review or if it will contain any detail which will have an impact on the planned merger.

The trust is seeking considerable capital support – £106m for its estate and around £44m for Bedford. It said it will use the capital to build a new five-storey acute services block, which will allow it to upgrade the existing maternity and neonatal intensive care services as well as expand accident and emergency and theatre facilities and deal with backlog maintenance.