Health sector regulator Monitor has claimed it will for the first time attempt to help a foundation trust hospital become “a full integrated care organisation”.

The regulator announced it would send a team of management consultants to Tameside Hospital Foundation Trust to consider whether and how such a shift could take place.

It could involve the hospital potentially offering public health, social care and wellbeing services, and represents the first time the NHS has “tried to create a full integrated care organisation at a foundation trust”, according to Monitor.

The economic regulator is taking the action because Tameside is believed to be clinically and financially unsustainable in its present form. It is in regulatory special measures and finished 2013-14 with a £3.6m deficit.

Late last year the foundation trust commissioned a review of the strategic options for its clinical services by management consultants McKinsey and Co, at the suggestion of Monitor.

The review considered removing various acute services from the site and suggested replacing them with general practice, out-of-hours primary care, community services and, potentially, some low-complexity elective work currently provided at other hospitals.

The proposal to become an ICO is already backed by Tameside Hospital Foundation Trust, Tameside and Glossop Clinical Commissioning Group and Tameside Metropolitan Borough Council.

The team which Monitor will appoint, likely to be led by a consultancy or accountancy firm, will start work later this year and consider which acute services could be provided by hospitals nearby and which services could be moved in.

A Monitor statement published last week, announcing the move, said it would “help turn [the trust] into a new more integrated healthcare organisation”.

The regulator’s regional director for the north of England Frances Shattock told HSJ its work would build on proposals developed locally.

It was providing additional resources to give the organisations “extra bandwidth” to move faster, she said.

Ms Shattock said Tameside was the only foundation trust at which Monitor was currently exploring the ICO model, but she would be “surprised” if there were not others in which it could work.

Tameside Hospital chief executive Karen James told HSJ its current service model was “not fit for purpose” and it should become a “hospital without walls”, delivering services in and out of hospital.

This would allow the hospital to close old buildings and make more use of those which opened in 2010 under a private finance initiative deal, thereby “sweating” its assets. Ms James claimed most of the hospital’s current secondary care services would remain.

Tameside and Glossop CCG chief operating officer Steve Allinson said the plans aimed to produce a lasting solution to health and care fragmentation, rather than only addressing the FT’s financial problems.

“This isn’t about trying to shuffle a few services in and out of a hospital to make a hospital viable, this is actually about doing something quite radically different,” he said.

Tameside was placed in special measures in summer 2013 and was in July rated “inadequate” following a Care Quality Commission inspection.