Full Business Case for the merger of Colchester Hospital University NHS Foundation Trust and The Ipswich Hospital NHS Trust 22 March 2018 Final Draft Version – Prepared for Trust Board 29 March 2018 Colchester Hospital University NHS Foundation Trust and The Ipswich Hospital NHS Trust Merger Full Business Case 2 | P a g e Colchester Hospital University NHS Foundation Trust and The Ipswich Hospital NHS Trust Merger Full Business Case Contents Contents .................................................................................................................................................. 3 Abbreviations .......................................................................................................................................... 7 1 Executive Summary ......................................................................................................................... 9 1.1 Introduction ............................................................................................................................ 9 1.2 Background ............................................................................................................................. 9 1.3 The case for change ................................................................................................................ 9 1.4 Benefits of merging ............................................................................................................... 10 1.5 The ESNEFT mission, vision and philosophy ......................................................................... 11 1.6 How ESNEFT will operate as a single organisation ............................................................... 12 1.7 The new organisational operating model ............................................................................. 13 1.8 Financial case ........................................................................................................................ 15 1.9 Programme governance and timeline .................................................................................. 16 1.10 Communication and engagement......................................................................................... 16 1.11 Conclusions and recommendations ...................................................................................... 16 2 Introduction .................................................................................................................................. 19 2.1 Purpose of the Full Business Case ......................................................................................... 19 2.2 Agreeing the OBC and the preferred form of transaction .................................................... 21 2.3 Structure of this document ................................................................................................... 21 2.4 Arrangements for the oversight and development of the FBC ............................................ 22 3 Background ................................................................................................................................... 25 3.1 Background to CHUFT and IHT .............................................................................................. 25 4 The case for change for CHUFT and IHT ....................................................................................... 35 4.1 The drivers for change .......................................................................................................... 35 4.2 Driver: Clinical models of care provision are changing ......................................................... 35 4.3 Driver: Recruitment and retention challenges ..................................................................... 38 4.4 Driver: Financial viability ....................................................................................................... 39 4.5 Driver: Delivering transformational change ......................................................................... 40 4.6 Driver: Demographic factors ................................................................................................. 42 4.7 Driver: Impact of technology ................................................................................................ 45 4.8 System risks if the merger does not proceed ....................................................................... 47 4.9 Conclusion ............................................................................................................................. 47 3 | P a g e Colchester Hospital University NHS Foundation Trust and The Ipswich Hospital NHS Trust Merger Full Business Case 5 The new organisation.................................................................................................................... 49 5.1 Introduction .......................................................................................................................... 49 5.2 Mission, vision and philosophy ............................................................................................. 49 5.3 Organisational objectives ...................................................................................................... 50 5.4 How ESNEFT will operate as a single organisation ............................................................... 51 5.5 Element 1: Governance ......................................................................................................... 52 5.6 Element 2: Clinical operating model ..................................................................................... 57 5.7 Element 3: Corporate model................................................................................................. 60 5.8 Element 4: Enablers .............................................................................................................. 62 5.9 Element 5: People and organisational development ............................................................ 65 5.10 Element 6: Education and training ........................................................................................ 68 5.11 Element 7: Capacity and capability to deliver change .......................................................... 70 5.12 Element 8: Performance management ................................................................................. 77 5.13 Benefits ................................................................................................................................. 79 6 Financial Strategy .......................................................................................................................... 83 6.1 Introduction .......................................................................................................................... 83 6.2 Overview ............................................................................................................................... 84 6.3 Key developments since the OBC ......................................................................................... 85 6.4 Historic trust performance and STP context ......................................................................... 85 6.5 Forecast methodology .......................................................................................................... 89 6.6 Standalone positions (Step 1 and 2) ..................................................................................... 89 6.7 ESNEFT before adjustments (Step 3) .................................................................................... 98 6.8 Merger benefits and integration costs (Step 4) .................................................................... 99 6.9 Enlarged Partnership Post Adjustments (Step 5) ................................................................ 103 6.10 Sensitivities (Step 6) ............................................................................................................ 105 6.11 Closing the Gap ................................................................................................................... 107 7 Transaction and integration ........................................................................................................ 109 7.1 Organisational form of the transaction .............................................................................. 109 7.2 Transaction governance ...................................................................................................... 109 7.3 Post-transaction implementation ....................................................................................... 115 7.4 Overview of key risks and mitigations ................................................................................ 115 8 Communications and stakeholder engagement ......................................................................... 120 4 | P a g e Colchester Hospital University NHS Foundation Trust and The Ipswich Hospital NHS Trust Merger Full Business Case 8.1 Progress and approach since the OBC ................................................................................ 120 8.2 Communication and engagement strategy ........................................................................ 121 8.3 Equality impact assessment ................................................................................................ 121 8.4 Travel impact assessment ................................................................................................... 121 8.5 Engagement activity ...........................................................................................................