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The real state of the Hinchingbrooke healthcare trust

Why the Hinchingbrooke Healthcare Trust is living on borrowed time.

Hinchingbrooke Healthcare Trust is a zombie.

The Health and Social Care Act abolishes NHS Trusts (section 179(1)) with one exception: franchised trusts (section 179(3)).

This is the Hinchingbrooke clause. It was created to allow Circle’s experiment to privatise the management of an NHS acute trust to continue. Hinchingbrooke can only remain an NHS Trust while it is still franchised. All other NHS Trusts will have been killed off (become Foundation Trusts, or merged with one) by April 2014.
Hinchingbrooke’s franchise deal is only ten years, so this trust is living on borrowed time.

Hinchingbrooke is the only franchised NHS Trust at the moment, but the concept is not new.

In 2003, Good Hope Hospital in Birmingham was franchised to management consultancy firm Tribal Secta.

It was not a happy time for the hospital. Tribal failed to improve quality and failed to reduce the trust’s debt. Indeed, the annual deficit increased from £839k when Tribal took over the hospital to £3.5m when the contract was terminated. The local Strategic Health Authority (SHA) decided that the hospital should return to NHS management. Good Hope is now part of Heart of England FT.

The situation with Good Hope was very different to Hinchingbrooke.

With Good Hope, the franchising deal was reversible. Under Tribal, the hospital was an NHS Trust and it was possible for the NHS Trust to be returned to NHS management.

This cannot happen with Hinchingbrooke because the Health and Social Care Act says that trust can only remain an NHS Trust if it is franchised. The Act abolishes the concept of NHS Trusts in all other situations and so if the franchise fails, the trust will have to be re-franchised or else cease to exist. There is no alternative status for an NHS Trust.

All other NHS Trusts will become, or be part of, a Foundation by 2014.

An FT has specific governance arrangements and has to prove that it has sufficient financial and clinical quality. It takes a lot of planning and re-structuring for an NHS Trust to become a Foundation Trust. In particular, the board becomes accountable to a council of (a majority of) elected governors, a concept that does not fit in with a franchise model.

Meanwhile, the government has just created the legislation to set up the NHS Trust Development Agency (NTDA).

This organisation will manage those non-franchised NHS Trusts that have not been able to become FTs by 2014.

The NTDA is being created because the government is abolishing those NHS organisations used to provide services and oversight (the Appointments Commission and SHAs) before the 2014 deadline when NHS Trusts will be abolished.

The Impacts Assessment for this statutory instrument says:

"To date, 50 per cent of the NHS trusts whose applications for FT status are rejected by Monitor fail because they do not have sufficiently robust governance."

This refers to the stronger NHS Trusts that have already applied. The remaining NHS Trusts will be much weaker and less likely to succeed in becoming FTs.

However, the same document goes on to say “There is a strong expectation that the majority of NHS trusts will achieve FT status by April 2014”. Which can only imply that the criteria for FT authorisation will be relaxed to make sure that the majority of weaker trusts obtain FT status.

The NTDA impact assessments shows that currently it is tough for an NHS Trust to get FT status. Hinchingbrooke is a weak NHS Trust. If Circle fails to clear Hinchingbrooke’s debt, and the National Commissioning Board cancels Circle’s contract, it will not be in a state to become an FT. This zombie
trust can only live on under another franchise.

Richard Blogger writes about the NHS and social policy at NHS Vault.

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