This new transactions guidance advises NHS trusts and foundation trusts planning an organisational or non-organisational transaction or investment on our new regulatory assurance process the required approvals and timescales. It consolidates and supersedes previous transactions guidance issued by Monitor and the Trust Development Authority, and aligns our transaction review process to the integrated support and assurance process.
Our new approach:
more streamlined with greater focus on early, more detailed engagement with us – the previous strategic and
outline business case stages have been combined. This means proposals that
are not viable should be identified earlier
- updates the risk factors we use to judge the depth of regulatory assurance required
- sets out the ‘red flags’ that, if identified at strategic case stage, will require trusts to do further work and/or provide mitigations.
Our guidance also:
- outlines how trusts should approach funding transactions in the context of ongoing constraints on capital funding
- shares the key learning points from previous mergers and acquisitions
- outlines the support we can offer, such as legal guidance and guidance on navigating a Competition and Markets Authority review.
If your trust has started a transaction process under the previous guidance from Monitor, we will continue to work with you under this plan.
For trusts undertaking transactions, including mergers and acquisitions
Transactions guidance for trusts forming or changing a subsidiary
This addendum to the transactions guidance outlines a new framework that changes the way subsidiaries are reported to and approved by NHS Improvement.
This framework clarifies the required approval process before trusts can implement plans for subsidiaries — it does not affect their legal ability to develop such plans.
This addendum applies only to subsidiary transactions. Our transactions guidance remains the prevailing framework for the reporting and review of all other provider transactions.
This addendum should be used by all NHS trusts and foundation trusts considering transactions involving the creation of subsidiaries or material changes to existing subsidiaries.
In this addendum, the term ‘subsidiary’ means a separate, distinct legal entity for the purposes of taxation, regulation and liability owned or partly owned by a provider. ‘Subsidiary includes companies limited by shares or companies limited by guarantee, limited liability partnerships and community interest companies.
This document is for trusts forming or changing a subsidiary.
Merger benefits guidance
This guidance is for NHS organisations planning a merger.
It also explains how we will assess and provide advice to the Competition and Markets Authority (CMA) on the benefits of mergers involving NHS foundation trusts. It covers:
- our role in relation to merger benefits
- what is a relevant patient benefit
- how the CMA will take our advice into account
- our approach to assessing merger benefits
- examples of types of merger benefits
Evaluating merger impacts guidance
Monitoring and evaluating benefits post-merger is crucial for implementing mergers successfully and realising the expected benefits.
We have developed a practical tool to help trusts plan for, oversee and conduct merger impact evaluation. Using this guidance can help trusts that are considering, planning or implementing a merger to develop more robust strategic and full business cases for the transaction review.
- how and when to plan an evaluation of merger impacts
- when to do the evaluation and how this fits into the merger timeline
- the key steps for an effective evaluation of merger impacts.
The guidance also provides evaluation tools and templates that trusts can use to keep track of and evaluate benefits and other impacts resulting from their merger.
“Historically, the NHS has not been good at evaluating large scale change. This new guidance provides a practical approach to assessing the impact of mergers. We would certainly have found this very helpful when planning the merger of the Birmingham Women’s and Birmingham Children’s NHS Foundation Trusts.”
Birmingham Women's and Children's Foundation Trust
"Significant transactions are about delivering benefits for patients and the tax payer. It is essential to give detailed thought to measuring potential benefits and obtaining key KPIs at business case stage or before. Otherwise the benefits are difficult to measure post merger (especially if some organisational knowledge is lost). NHSI’s merger impact evaluation guidance is a useful resource for trusts to refer to for practical tips on planning for and measuring potential merger benefits."
Essex Partnership University Foundation Trust
Competition review of NHS mergers: a short guide for managers of NHS providers
This short guide seeks to answer the questions merging providers often ask about the UK merger review process. It is designed to highlight important aspects of the process of merger review and provide an overview of the substantive test. It is not intended to be comprehensive.
For further detail please refer to more in-depth guidance that the CMA and Monitor have published.
Consultation response: Monitor’s draft guidance on merger benefits
This describes the healthcare sector’s response to Monitor’s draft guidance and explains the changes made to the final guidance documents.