The health service’s competition watchdog has cleared proposals for a merger of NHS trusts Ealing Hospital and North West London Hospitals.

The Co-operation and Competition Panel’s decision comes just weeks before commissioners in North West London aim to begin consultation on a major reorganisation of acute services in their patch.

The trusts moved to seek merger last year, after concluding they would be unable to meet the government’s requirement that they attain foundation status by 2014 as stand-alone organisations.

North West London, which runs Northwick Park and Central Middlesex Hospitals, has recorded deficits in each of the past four years and is forecasting deficits totalling £80m between 2011-12 and 2014-15, the CCP report states. An NHS London report this year concluded that productivity savings alone could not make the trust financially viable.  

The watchdog reported that Ealing Hospital – which runs one acute site, as well as community services across three London boroughs – was financially stable, and was expected to make surpluses in every year to 2015-16. The NHS London report also concluded that Ealing was “financially viable if given a longer period (i.e. beyond 2014) to achieve the highest level of productivity savings”.

However, the trusts told the CCP that without the merger Ealing could not make it to FT status independently.

“They explained this was because Ealing Hospital lacks the necessary clinical scale in some hospital based specialties to meet future commissioning standards and that the decommissioning of services would adversely affect its financial position,” the watchdog’s report stated.

In March, sources in the area told HSJ that the three hospitals most likely to lose accident and emergency services in commissioners NHS North West London’s planned reconfiguration were Ealing, Central Middlesex, and Imperial College Healthcare Trust’s Charing Cross Hospital.

Public consultation on the plans is expected to begin in early July. The commissioners have not yet announced the options they will consult on.

In the absence of certainty about which hospitals would lose services, the CCP assessed the merger based on the trusts’ current service configuration. It concluded that, while the two trusts were competitors, the proposed merged organisation was unlikely to see a “material” reduction of “competitive constraints”. For both trusts’ elective services, it found, Imperial was the “main competitive threat”.

The CCP’s recommendations must now be considered by the health secretary before a final decision on the merger is reached.