healthcare update - issue eight
Mergers and takeovers of NHS trusts – an investigation into the property perspective
The Department of Health (DH) and Monitor have requested that
the NHS Cooperation and Competition panel launch an enquiry into
how much control central government should retain over its NHS
trust properties, following a merger with an NHS foundation
trust.
Recently, the NHS Cooperation and Competition panel approved an
NHS foundation trust takeover of an NHS trust. This merger included
40 properties which were used by the NHS trust for mental health
services. 15 of these properties were deemed as being ‘key’ for the
provision of the local mental health services.
Given the extra freedom that foundation trusts enjoy over their
estate, there is concern within the DH and Monitor regarding the
implications that might resonate from such a loss of control.
Poor service providers
If the commissioners or Health Secretary were not satisfied with
the new service provided, they would struggle to introduce an
alternative provider, which could be detrimental to the quality of
care which the patients receive.
Value for money on future sales of
properties
Following the foundation trusts’ take over and control of the
estate, there may be non-key properties that could be disposed of
to a third party. As the foundation trust is not subject to the
same disposal obligations as an NHS trust, it may be that such
future sales might not be value for money for tax payers.
There are also issues regarding future competition for the
provision of services that are taken over by the foundation trust.
There are usually a number of alternative third party service
providers, all of whom could carry out the role of a new service
provider. The merger might create an increased barrier to these
alternative service providers wanting to enter the market in the
future – the concern being that it would be more difficult to
compete against the merged NHS entity with its ‘ready made’
property estate.
The panel, which helps to ensure that the principles and rules
of cooperation and competition for the provision of NHS funded
services support the delivery of high quality care for patients and
value for money for taxpayers, agreed to the recent takeover
because:
- A property ‘protocol’ was agreed between the two trusts which
(in theory only, since it is not legally binding) gives the NHS
trust’s commissioners a certain degree of influence over the
estate, following the transfer to the foundation trust
- The concern in relation to the amount of control retained by
the NHS trust’s commissioners would remain, no matter which service
provider (third party or NHS) took over the trust
- The concern in relation to increased barriers to other
providers would remain no matter which of the bidding foundation
trusts took over
- The conclusion of the panel was that “the loss of control did
not result in any detriment to the patients or taxpayers”
Further investigation
This recent merger was approved but it has highlighted the above
concerns with regard to future situations where mergers or
takeovers are considered, or where services are put out to tender.
It might be that, although the intention is for foundation trusts
to devolve decision making from central government, the Health
Secretary needs to retain some influence over the future of NHS
properties, for the interests of patients and/or taxpayers.
Subject to the Health Secretary passing a dissolution order, the
merger will go ahead on 31 March 2010. Prior to this, the panel
will be carrying out a Phase 2 investigation which is to start “in
due course” and will look into the relationship between property,
competition and cooperation within the NHS, with the hope of
concluding this report by 11 January 2010.
talk to us
save to PDF
The content of this update is provided for the purposes of general
interest and information. It contains only brief summaries of
aspects of the subject matter and does not provide comprehensive
statements of the law. It does not constitute legal advice and does
not provide a substitute for it.