COMMERCIAL: A mental health trust in the East of England may be “heading to arbitration” over the terms of its talking therapies programme, having failed to sign its contract for the current financial year.

The Suffolk Mental Health Partnership Trust was recently hit by a negative independent report and has had its planned merger with Norfolk and Waveney Mental Health Foundation Trust repeatedly stalled. Three months into the 2011-12 financial year the trust’s contract with Suffolk PCT – its main commissioner – had still not been signed.

Chief executive Aidan Thomas’s report to the partnership trust’s June board meeting said: “The trust may be heading to arbitration on the issue of IAPT [improving access to psychological therapies] target figures and penalties.”

A performance report to the meeting said the majority of the contract had been agreed, “with the main exception being the IAPT services”.

Discussions were ongoing “regarding the activity levels required in the IAPT contract”, it said. “The present level required by the PCT of 80,000 [patient] contacts is not achievable. Alternative proposals have been put to the PCT and the trust is awaiting their response.”

Minutes said the delay meant the commissioner would continue to pay the trust at the value of last year’s contract. Mr Thomas told the board the contract dispute posed a risk of £2m to the trust.

A spokesman for NHS Suffolk said: “Ensuring the appropriate level of healthcare and value for money are key elements of all NHS Suffolk contract negotiations. We are working with Suffolk Mental Health Partnership to come to a mutually agreeable conclusion to negotiations.”

Meanwhile, the PCT is monitoring quality improvement at the trust following an independent report it commissioned into homicides at the trust reporting serious concerns about the trust in May. An independent review was conducted after five homicides involving individuals known to the trust and the suicide of a 19-year-old male in-patient by hanging.

While the trust’s merger with Norfolk and Waveney Mental Health Foundation Trust was delayed in June at the request of Monitor. The merger was previously ruled against by the Cooperation and Competition Panel due to the lack of other credible competitors within the area. Mr Thomas told the board the merger will not go ahead until the end of September.