Potential bidders circle as first NHS trust goes up for grabs

Posted on May 28, 2009. Filed under: Journals | Tags: |

Health Services Journal | BY DAVE WEST | 28 MAY 2009 

Twenty-two NHS organisations, including one based 200 miles away, are vying to take over the first trust offered up for competitive takeover.

Foundations and trusts from regions including the North West and South West have expressed an interest in acquiring or merging with Bedfordshire and Luton Mental Health and Social Care Partnership trust, NHS East of England has confirmed.

The strategic health authority says the takeover is the first process of its kind and will establish a model for trusts not expected to achieve foundation status.

Managers are looking to foundations to take over poor performing or unsustainable trusts but HSJ has been told foundations are wary that such moves would affect their own finance and governance risk ratings. This would damage their standing with the regulator Monitor.

NHS East of England director of strategy Stephen Dunn said the NHS transaction manual and Monitor guidance gave some direction to the process. But there were “quite a lot of gaps that need to be filled in”.

“That is why the Department of Health is working with us to clarify some of the finer points of detail, and this can act as a model for future transactions,” he said.

He added Monitor would examine any deal’s effect on existing foundation trusts.

“The challenge for any organisation is to try to ensure that the deal that is done does not increase risk of a potential breach of its terms of authorisation [as a foundation].”

NHS East of England has set a deadline of the end of 2009 for all its trusts to become foundations and is looking for alternatives for others. It is waiting for the Treasury to approve a competitive tender to run Hinchingbrooke Health Care trust as a franchise, which would also be open to the independent sector.

Consultant and former government adviser Michael Macdonnell is working with trusts looking at potential acquisitions and mergers. He warned there was a “policy vacuum” surrounding the process and said trusts wanted assurance they would not be taking a big risk for little benefit.

“From a foundation’s point of view there are very few incentives, and there are few levers to force them to do it. They need a model on how to do it.”

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