27 August 2019 by Tosca Fairchild
The journey behind the making of the University Hospitals of Derby and Burton NHS Foundation Trust
An NHS merger is a challenging proposition for any governance team, especially when it has the potential to create one of the largest NHS trusts in the country. This was the case for the two teams of Derby Teaching Hospitals NHS Foundation Trust and Burton Hospitals NHS Foundation Trust, which came together to form University Hospitals of Derby and Burton NHS Foundation Trust (UHDB).
The two teams came together under my leadership where I developed and implemented innovative governance solutions to ensure the process was run and felt like a merger, although transacted statutorily as an acquisition leading to the creation of one of the largest NHS trusts with an annual turnover of nearly £800m and employing 12,500 staff. ICSA recognised this and awarded UHDB the ICSA Governance Project of the Year 2018 award, against competitors Aviva, the Financial Reporting Council, HSBC, KPMG & Purple, Scottish Widows, and Sport England & UK Sport.
During a 24-month period the team faced a number of governance challenges, including preparing the merger documentation itself, establishing a clear process for the appointment of the new Board and were also involved in developing pre and post implementation plans for key areas. These included policy development, writing and getting approval by Parliament the Trusts’ Annual Reports, whilst all the time having personal concerns about how the merger would impact on them.
The new team operates across five hospital sites, supporting not only the Trust Board and its sub-committees, but also the Council of Governors and their associated groups/committees. It also continues its involvement in strategic risk management and has responsibility for insurance and the Trust’s Freedom of Information requests.
Communication and mutual respect was the key to creative, innovative teamwork as each sovereign organisation’s systems and processes needed to be detailed and the plan for integration developed. Linked to clear communication was wider stakeholder engagement, as the team were dealing with a number of internal and external groups, including the Board, Council of Governors, regulators and other bodies, such as the ‘Big Four’ accountancy firms and legal firms.
It was essential that the information provided was clear and correct, duplication was avoided and the recording of when and where this information had been submitted and approved was accurately recorded to satisfy our regulators at NHSI and CQC.
Operating in parallel to this was the need to ensure that day to day good governance and compliance for each of the sovereign trusts was maintained. This was complicated by the fact that the two sovereign organisations had the same Chairman and my focus was required to ensure there was clear demonstrable separation of governance and that the Chairman’s conflict of interest was robustly managed.
My focus was also on what needed to be in place to allow the process to ‘feel like a merger’, but transacted as an acquisition and once the merger had been approved by the CMA and NHSI – what systems and governance needed to be in place to ensure compliance with any inspection from the CQC or other regulators.
One of the key elements for myself and the team was to avoid duplication and ensure interlink with Directors, Non-executive Directors and Governors, who all had a role in the approval of the merger and so it was critical to ensure Governors were fully briefed. The NHS governance structure is different from the commercial one because it involves Governors, who came from various walks of life
and are voted by the public and staff to represent their constituencies.
The project was the first merger between two NHS trusts who had decided to merge and were not being forced by the regulators due to financial or operational reasons, and was delivered without any central financial support. It was a merger in all senses of the word even though the legal action was that Derby Teaching Hospitals would acquire Burton Hospitals. To demonstrate this, the new Board is made up of a mix of board members from both legacy organisations.
Some of the complex issues that had to be considered included:
• how to compile a Patient Benefit case showing the patient benefits for the CMA including how overview and governance of this would be retained locally and this was led by the Medical Director
• how to appoint a new Board and Executive team, utilising the underlying merger requirements, recognising it would be transacted as an acquisition
• how to develop the new Constitution to meet the requirements of the new organisation and the regulatory requirements of NHSI and CQC
• how to manage the very diverse requirements of the two Councils of Governors to allow them to approve the merger and then integrate into a larger council for the one organisation over a larger geographic area with a very diverse demographic.
A particular governance difficulty was the fact that the actual legal transaction was an acquisition of Burton by Derby. Whilst both trusts were foundation trusts, the constitutions, reporting, committee structure and approval levels through schemes of delegation were slightly different.
All this had to be reviewed and a proposed constitution and structure, including a new Board and Council of Governors, would have to be developed that would be appropriate to meet the demands of the regulators in their Well-Led assessment (i.e. governance assessment of NHS organisations undertaken by CQC) and Reporting Accountant reviews. It also had to satisfy the Councils of Governors who are publicly and staff elected and are required to approve all significant and statutory transactions in any foundation trust NHS organisation.
The team developed interactive links with the external bodies involved in the process, including accountancy, legal and regulatory bodies, and ensure that day to day compliance was achieved, whilst developing the standards required for the new organisation. A separate and critical strand of the work, led by the Medical Director, was the development of a detailed Patient Benefit Case for the CMA setting how clinical services could be delivered differently to provide the best clinical outcomes for patients even though competition in its true form would be reduced. Getting CMA approval at Phase One was a massive achievement.
It has now been 12 months since the merger. Although the majority of the team have remained, with any integration there is always the need to shape the team for the long-term and recognise that some outstanding members of the team will want to pursue their career goals in the short-term.
Although these have been a loss, the team and the wider Trust have continued to succeed in their objectives.
We merged two strong teams and this meant that when opportunities became available elsewhere, we were always going to lose one or two valued colleagues – especially given the knowledge they will have gained through the merger.
This is the reality and it is a great credit to the Trust and to the team that we see colleagues promoted to senior roles elsewhere and I am grateful for their support and contribution to UHDB governance.
For the Trust itself, we’ve recently been awarded a ‘Good’ rating from the CQC, which recognised all of the progress we’ve made since previous inspections at the two former Trusts – and our team played a very critical full part in the preparation for this particularly the governance assessment of the Board referred to as ‘well-led’.
This was our first inspection as UHDB and it started in January 2019, just six months after our merger and in right the middle of a busy and challenging winter. To get a ‘good’ Well-led rating is a reflection of how well the new Board has come together as a team and how well the new governance processes in the organisation are working.
A CQC rating is the very best indicator of how an NHS trust is performing, given the depth of their scrutiny. This gives us a great foundation on which to continue to build and improve our services further.
In creating UHDB, we wanted to achieve three aims. We wanted to sustain important local services at Queen’s Hospital Burton, to provide Royal Derby Hospital with a bigger population to help support and grow our specialist services, research and education interests, and also to make best use of our community hospitals in Lichfield, Tamworth and Derby by working together with our partners across Staffordshire and Derbyshire.
Over the year, there has been good progress in achieving these aims. We’ve seen services strengthened at Queen’s Hospital Burton, with improvements, for example, in Renal and Urgent Care and recruitment into key posts in specialities, such as Imaging, Cardiology and Acute Medicine.
For specialist services, we’ve brought back complex cardiology work from other regional centres, created an integrated Breast Service and have plans for improving our stroke services in Staffordshire.
UHDB consultants are now working in the Samuel Johnson Community Hospital in Lichfield, Sir Robert Peel Community Hospital in Tamworth, has more specialist clinics and at London Road Community Hospital in Derby, we’ve further developed our rehabilitation and outpatients offer too.
Through all of this, there is recognition of how tough a challenge this has been for all the colleagues in the Trust and Governance team. Delivering all the opportunities presented by the new Trust will take time and although were pleased with the achievements to date, the Governance Team at UHDB will continue to strive for excellence in governance.