This post carries on where my previous post, Shrink Wrapped Part 1, left off (http://dataforlb.blogspot.co.uk/2015/03/shrink-wrapped-absorption-of-ridgeway.html ). These posts were prompted by news that Oxfordshire County Council’s “big plan” for services for people with learning disabilities in Oxfordshire is unlikely to include a further contract with Southern Health NHS Foundation Trust for learning disability services in Oxfordshire (see http://www.communitycare.co.uk/2015/03/13/southern-health-set-lose-5m-learning-disability-contract-significant-concern-care/ ). If this comes to pass, does Southern Health NHS Foundation Trust get to keep (and sell off) the sites of its learning disability services in Oxfordshire, often in potentially lucrative locations? As yet the answer to that question isn’t clear (to me, anyway).
However, on the basis that past behaviour is the
best guide to future behaviour, I’ve been looking through Southern Health’s
Board papers for clues about their financial strategy when it comes to learning
disability services in Oxfordshire.
My template for looking at this is the behaviour of an asset
stripping venture capital company, with stages something like this:
1) Identify a financially struggling company and
acquire it at a knock-down price.
2) Reduce running costs as much as possible and
don’t make expensive investments into the company.
3) Sell off the assets piecemeal under there’s
nothing left except for any highly profitable elements that can be absorbed
into other company or sold at a huge profit.
The first post focused on Stage 1 – the merger/acquisition/absorption
of Ridgeway, and the possible financial incentives for doing that were
sufficiently attractive for 13 initial bidders to pitch for it.
This post focuses on Stages 2 and 3: after the absorption, what
evidence is there in the Board (and other) papers for:
1) Southern Health making serious investments into
former Ridgeway sites (or not),
2) Southern Health looking to sell off aspects of
the former Ridgeway estate?
3) Southern Health looking to then divest
themselves of responsibility for former Ridgeway services?
I don’t know why, but for some reason while I was writing
this ‘Right Said Fred’ (the original and best song by Bernard Cribbins, of
course) kept going through my head – probably slightly too benign a vibe, but
anyway, here it is (https://www.youtube.com/watch?v=r5XX9LX2es4
).
We was getting
nowhere, and so we had a cuppa tea
Although there is a curious lack of attention paid in the
Southern Health Board papers to the impending absorption of Ridgeway, there is
a focus very soon after on potential financial issues that require attention,
although issues about how good the Ridgeway services are seem to be treated
with some complacency:
“The Learning Disability division now stretches across
Buckinghamshire, Oxfordshire, Hampshire and into parts of Wiltshire and Dorset.
The newly configured services are currently finalising the clinical strategy
and business plan ensuring it is in line with the rest of Southern Health in
developing its services with a 'business as usual' approach. The next 12 months
will see the services undertake a financial recovery plan and a detailed
quality improvement plan that is supported by commissioners and centred on the
needs of service users.” (CEO report, 28 Nov 2012).
“The Chairman sought clarification as to whether there were
any issues, in particular in relation to quality of care. The Chief Operating
Officer noted that there had been no issues to date, largely due to the robust
due diligence undertaken; she confirmed that in relation to the transfer of
patients between facilities, there was no indication of systemic problems… In
relation to the financial recovery plan, the Chairman sought clarification as
to the progress with marketing beds at Postern House. The Chief Operating
Officer confirmed that the Trust needed to fill three more beds, two of which
were likely to be filled soon, in order to reach a breakeven position, and
would then look to further increase the financial viability of the service”
(minutes of 28 Nov 2012, Board meeting).
[Postern House is an inpatient service in Wiltshire where
there was heavy capital investment in the year before absorption by Southern
Health].
General financial plans for Southern Health for 2013/14
involved making substantial cuts at a time of reduced income to generate a
surplus, with former Ridgeway services explicitly mentioned as a location for
‘savings’:
“The Trust’s income will reduce by 1.3% for 2013/14, in line
with the national NHS settlement. Internally we plan to generate £17.8m cost
reductions, to enable the Trust to cover cost pressures including inflation,
and to enable investment in further service improvement and the development of
the capability of our workforce. The financial plan is to generate a surplus of
£4.5m.”
“Corporate and back office services will continue to deliver
both cost efficiency savings and restructuring savings. 2013/14 will be the
third year of a three year plan to deliver savings of 25%, alongside savings
planned following the merger with Ridgeway Partnership during 2012” (Summary of
Annual Business Plan 2013/14; 28 March 2013).
There are also statements in the strategy about capital investment,
with former Ridgeway services mentioned generically but with no specific plans
attached:
“An allocation of £4.0m will be required to fund service
developments/estate rationalisation, including works at the Becton Centre,
Petersfield Hospital, the Bridge Centre and Ravenswood and Learning Disability
units in Oxfordshire & Buckinghamshire.” (Summary of Annual Business Plan
2013/14; 28 March 2013).
A year later, it appears that investment in the learning
disability services estate was still effectively absent: “Sue Harriman reported
on the progress in relation to the turnaround plan for the Learning
Disabilities Division. She noted that the Trust was on plan, or ahead of plan
for delivery of key actions, with the exception of those relating to Estates”
(Board minutes, 25 March 2014).
By the 10 Sept 2013 Board meeting, all parts of Southern
Health were failing to deliver against their ‘cost improvement’ targets, with
the learning disabilities Division forecasting a shortfall of £0.9 million by
the year-end due to ‘unfunded beds in Oxford services’. This forecast had
increased to a £1.1 million shortfall by 25 March 2014 and ended up being £3.54
million over budget (27 May 2014). This was a consistent theme into 2014/15,
with the learning disabilities Division already forecast for an end of year
shortfall of £3.8 million by November 2014.
So overall, there seems to be a picture of a lack of capital
investment in former Ridgeway services, and swingeing expectations of ‘cost
improvement’ (i.e. cutting costs) in learning disability services that were repeatedly
not being met.
Take off all the
handles, and the things wot held the candles
It seems always to have been part of the financial plan that
parts of the Ridgeway estate were to be sold off. Before absorption, four
Ridgeway properties (Wadham Court, Selbrook Villa, Northview, Lanterns) had
been identified as ‘surplus to requirements’, although they were only to be
sold after absorption, with the money going into Southern Health’s coffers (these
were eventually put up for sale at a total price of around £1.7 million).
However, it appears that this wasn’t enough, with further ‘estates
rationalisation’ required (allied to a worrying lack of preparedness in terms
of service and clinical leadership):
“3.9. Learning Disabilities: Risk
a) Sustainable cost effective services in 2013/2014 are dependent on business
plans with significant change programmes including estates rationalisation. b)
Divisional leadership has changed and Clinical Service Directors are not yet
established.” (Chief Operating Officer’s Report, 28 March 2013).
And even at this point, less than six months after absorption,
there are ominously worded statements about the Slade site in Oxford:
“The division is also working closely with corporate
services to ensure alignment of business plans e.g. an estates strategy will be
developed that will support operational delivery. It is fair that there are
both opportunities and challenges in relation to this, particularly on the
Slade site in Oxford.” (COO Report, Divisional Update, 28 March 2013).
It is unclear to me whether the Slade site is being
considered as opportunity or challenge.
There are further sinister signs for the Slade site in the
23 April 2013 Board papers, where:
“There are also some challenges in relation to the condition
of some of the estate, particularly on the Slade site where buildings are now
of an age that they need significant refurbishment. The Division will work
closely with other Divisions to ensure that joint decisions and priorities are
both understood and agreed” (COO Report, Divisional Update, 23 April 2013).
So there is a clear recognition that the Slade site is in
serious need of refurbishment, but the opacity of what to do about it is
remarkable, and certainly doesn’t seem to involve actually doing any
refurbishment. The lack of urgency is evident, in that exactly the same
statement is copied and pasted into the ‘Divisional Update’ prepared for the 29
May and 23 July 2013 Board papers. Followers of #justiceforLB might well
wonder why this statement disappears from further ‘Divisional Updates’ after
this point.
There was more in a similar vein in the 10 Sept 2013 Board
meeting, from the acting Chief Executive Officer:
“Sue Harriman advised the Board that a post-acquisition
benefits realisation was on-going within the Trust’s Learning Disabilities
Division. She reported that this had identified some successes, but also some
challenges and concerns. She noted the significant financial challenges that
the Trust needed to address, which had been highlighted through the due
diligence process”.
Given all this due diligence and earlier recognition of the
poor state of the Slade site, it’s surprising to me that Southern Health were
apparently so surprised by a damning CQC inspection of these services (followed
by a succession of less than stellar CQC inspections of other Southern Health
learning disability services):
“The Care Quality Commission (CQC) conducted a three day
inspection of services on the Slade House site in Oxford in mid-September. The
inspection identified a number of areas of compliance failure and as such it is
incredibly disturbing that these issues had not been identified internally
through tried and tested governance processes. We have taken the findings from
the draft report incredibly seriously and have ensured these services are safe
and of appropriate quality in the immediate terms whilst fully investigating
and generating organisational learning” (COO Report, 29 Oct 2013).
This point of crisis seems to have forced a little more
clarity from Southern Health about their intentions for the Slade site:
“There are some longer term building challenges particularly
around STATT House, which needs to be balanced against the trust investment
criteria and future commissioning intensions [sic]. In the meantime, these
challenges are being planned for and will be implemented when service decisions
have been made” (Learning Disabilities Division Report to Board, 29 Oct 2013).
By March 2014, the prospects for estates ‘rationalisation’
across Southern Health is becoming more apocalyptic:
“The Trust’s Estate Strategy has been refreshed and is
currently going through an internal ratification process. It continues to
support the clinical strategies, resulting in a proposed reduction of
approximately 13 freehold (circa £6.8m total carrying value) and 11 leasehold
properties over the next two years. This will contribute a further £1.5m of
savings per annum to the total occupancy cost and consequent revenue position
of the Trust. The strategy is an interim refresh and a more radical estate
strategy and rationalisation plan will be developed with the challenge to
reduce the cost of estate by an ambitious target of 20-25%” (Finance Report, 25
March 2014).
And by June 2014, the specific implications for learning
disability services are spelled out:
“Costs within the Learning Disabilities Division exceeded
budget by £748k at the end of May 2014. This mainly results from the divisional
CIP target of £729k for the same period. The Division has had to address issues
involving both the quality and profitability of services and radical action has
been taken where appropriate.”
“Postern House has now closed, relieving recurrent losses of
around £400k per year, with notice also served on community services in Swindon
and Wiltshire. A paper evaluating the viability of John Sharich House is being
progressed. Work is ongoing with Oxfordshire County Council to develop a more
community oriented model which should be more clinically effective and cost
effective, and this forms a major part of the planned redesign of services.
Further options are being explored in Buckinghamshire and in LD Specialised
Services.” (Integrated Performance Report, 24 June 2014).
And
by November 2014, Postern House, together with Hampshire learning disability
sites Westview and Home Farm, were officially declared “surplus to
requirements…and the properties are now being marketed” (Chief Executive’s
Report and Directors Report, 25 Nov 2014).
So Charlie and me had
another cuppa tea, and then we went home
The first concrete sign of Southern Health withdrawing from
a former Ridgeway service came in December 2013: “There are ongoing discussions
with Swindon and Wiltshire regarding the future of service provision in these
areas”. Unsurprisingly “The Division recognises some unsettling times for staff
in Swindon and Wiltshire, whilst the future of services is agreed” (Learning
Disability Division update, 10 Dec 2013).
The decision came swiftly, by 25 March 2014: “For some time
the Division has been reviewing its ongoing provision on the community element
of the contract with Swindon and Wiltshire. Presently, we only provide
Psychology and Psychiatry and as such have limited influence on overall
pathways of care, which we do not believe are in the best interest of the
people we look after. Having worked with Commissioners over the last year, we
have served notice on both services, and we will stop providing those services
by 29 January 2015. However, should the pathways become clearer during the
notice period, we remain open to negotiations” (Divisional Reports, 25 March
2014).
More generally, throughout 2013 and 2014 there are
increasing rumbles about the financial performance of the Learning Disabilities
Division within Southern Health, usually attributed to ‘under-occupancy’ of
inpatient units in Oxford and Postern House and/or a move from block contracts
to spot purchasing.
As far as I can see (at this point the full set of Board
papers is over 200 pages long), the 28 January 2014 Board meeting contains the
first implication that Southern Health considers the whole commissioning model
as unsustainable:
“11.1 The Division continues to face a difficult financial
challenge, and has not yet realised the planned CIP [Cost Improvement
Programme] in year. A significant proportion of the divisional position is a
result of loss of income within in-patient facilities commissioned via ‘spot
purchase’, as such there is no longer guaranteed income for a number of our
units. This commissioning position is unsustainable for Southern Health, who
have a strategy to reduce dependency on beds and increase community services”
(Learning Disabilities Divisional Progress, 28 Jan 2014).
[As an aside, I don’t understand why a strategy of reducing
dependency on beds requires block contracts for, er, beds, but then again I’m
probably not strategically sophisticated enough]
This is put in stronger terms in the 25 March Board meeting:
“The Division has seen a significant underachievement of its
income to date and poor delivery of its CIP programme. This financial
underachievement has been in the main a result of quality issues and mitigation
plans in the LD services provided in Oxford, Swindon, Wiltshire and
Buckinghamshire. Significant service redesign with the planned reduction of bed
based services and investment in community based provision in these counties is
required to ensure financially sustainable services. This requires
Commissioners to re-commission LD pathways and wide-scale system and service
re-design; this creates a significant risk for the Trust if the pace and scale
of change is not acknowledged by all” (Learning Disability Divisional Progress,
25 March 2014).
And, in a final straw: “Southern Health’s current contract
to provide Learning Disability Services in Oxfordshire expires in December
2015. Commissioners have commenced the process of procuring a provider of these
services” (Southern Health Summary Strategic Plan 2014-2019).
So, in a year’s time, what will be left of the former
Ridgeway Trust within Southern Health? This map from a presentation to the
Board by the learning disabilities division soon after absorption shows all the
Trust’s learning disability services at that time. It looks like all the
Oxfordshire and Swindon and Wiltshire services will have gone with, to date,
substantial proceeds from the sale of sites – is there any reason to suppose
that the Slade House site will be any different?
Southern Health’s 5-year strategic plan, submitted to
Monitor, couldn’t be any clearer how things play out, from the SWOT analysis…
[I particularly enjoyed the CQC regulatory regime being
identified as a threat; and the typically warped tribute to the #justiceforLB
campaign in a weakness being “Current reputation largely based on quality
issues in LD services]
…to the key ‘challenges’ faced by Southern Health’s learning
disability services...
…And finally, the entirety of the summary strategic plan for
learning disability services (yes, that really is it):
A stereotype of a venture capital company couldn’t have done
it better. Who knows the motivations of senior Southern Health personnel when
they decided to bid for Ridgeway, especially given that most of the ‘key
challenges’ must have been obvious from the start? And who knows how they feel
about that decision now? Surely it would be complete moral bankruptcy to take
the proceeds of the Slade site back to Hampshire, rather than those proceeds
being used to support people with learning disabilities in Oxfordshire. One thing
I do know for sure – on their watch, a young man died. And none of the capital
gains in the world are worth that.
