Integration pioneer Torbay to merge

In a paper due to go to the trust board next week, chief executive Anthony Farnsworth says that after an assessment of the trust’s financial position he has concluded it is unlikely to be viable in its current form.

He adds: “[The] expectation would be that the trust would not achieve, or be able to retain, foundation trust status in the longer-term, in line with its current business model and configuration.”

The former primary care trust provider arm, which is highly regarded for its integrated health and social care provision, became a standalone NHS trust on 1 April this year in preparation for becoming an FT.

The previous year the trust took on provision of community services in the rest of south Devon under the transforming community services programme. However, these services must be recommissioned by April 2014 and the trust’s agreement with the council is due to be reconsidered by next April.

The fact that most of the trust’s income is “subject to review” means Monitor is unlikely to regard the trust as viable, the report says. Mr Farnsworth suggests the trust would have a better chance of achieving foundation trust status if it became smaller, focusing on its core provision in Torbay, but warns this could have consequences for integrated working.

He says: “Although the pressing immediate question is one of financial viability, the more profound consideration is whether the best option is to make the organisation viable (but possibly smaller) in pursuit of the FT application at the possible expense of our local system of health and care services, the best interests of our local population, and our ability to respond to the pressures and opportunities facing our funders.”

Mr Farnsworth said the financial analysis had also revealed many services are costing more to provide than the income received for them. He said while this was appropriate when the trust was part of a primary care trust, which benefited from reduced costs elsewhere in the system, it would not “pass the test of viability”.

At the meeting next Wednesday the board will be asked to consider whether they wish to make the changes necessary to continue in the foundation trust pipeline or pursue a merger.

South Devon Heathcare Foundation Trust, which runs the acute Torbay hospital, is the most likely partner, having already made formal arrangements for some joint working with Torbay.

In 2012-13 the trust will receive around £41m from Torbay Council, £31m from Torbay Primary Care Trust and £34m from NHS Devon.