Just east of Liverpool city centre stand two Royal Liverpool University Hospitals. One is a vast, crumbling 1960s hymn to concrete brutalism, and the other its brand new replacement: a towering, stylish development designed as England’s largest single-patient room hospital.

The starkly contrasting buildings appear to illustrate the dramatic renaissance Liverpool has enjoyed since Steve Warburton joined Mersey Regional Health Authority as a graduate finance trainee back in 1989. “The city is unrecognisable,” he says, pointing to “the regeneration that’s taken place in the centre; the amount of construction work going on; the cultural offer. This is a great place right now.”

And Warburton – who in October became chief executive of Liverpool University Hospitals Foundation Trust, the product of merging Liverpool’s two acute trusts – says NHS services have improved along with the city. Even after nine years of austerity, he notes, “most patients are still getting relatively timely access to services, and these services are generally of a very, very high standard.” 

Concrete progress

Zoom in, though, and there are obvious weaknesses in Liverpool’s regeneration, in its health services, and in its shiny new hospital – which looks set to overshoot its original 2017 completion date by at least four years. Built by Carillion under a PFI deal, it was unfinished when the firm collapsed; and as hospital administrators took over the project, they found serious faults in its construction. “Structural defects in the concrete work have required some really innovative solutions” to avoid partial demolition, says Warburton, and now “problems with the external cladding have been identified: we’re still working through the engineering solution.”

How did project management go so wrong? “It’s a question we would like answering,” responds Warburton. Under PFI, he explains, trusts are kept at arm’s length until building work is complete – with the PFI company and funders, in theory, carrying the risk. “But following the collapse of Carillion and the transfer of the assets back to the public sector, what had been somebody else’s problem has now become our problem”: he expects the government to fund the work required, but “we’re still a couple of years away” from completion. Meanwhile, the hospital staff must struggle on in their 1960s home – despite “bits of concrete falling off the outside.”

Meanwhile, the two newly-merged trusts – Aintree University Hospital and Royal Liverpool and Broadgreen University Hospitals (RLBUH) – have been facing spiralling demand for services. “In north Liverpool, around the Aintree catchment, the health indicators are all going the wrong way,” Warburton explains: life expectancy is falling, infant mortality rising, and “the people presenting at the front door are getting sicker”.

These problems “directly correlate with deprivation levels,” he adds, noting that the city council’s budget has fallen by nearly two thirds since 2010. Although the council has done a “sterling job in trying to prioritise adults’ and children’s social care and social services”, he believes the “knock on impacts [of service and benefits cuts] have had a direct bearing on the level of demand.”

Cooperation not competition

In this environment, it made no sense to have two big acute trusts competing for work: both were struggling to attract the volumes required to support specialist services, and finding that emergency work was displacing planned operations. In 2013, when Warburton was deputy chief executive of Aintree trust, he worked with his counterparts at RLBUH to merge the trusts’ vascular and lab services. “But we had to wrap complex joint ventures around them,” he explains. “There were in excess of 20 services with the same level of duplication, and we didn’t want to set up 20-odd joint ventures! Having separate organisations was getting in the way of a rational configuration of services.”

At a clinical summit bringing together consultants from both trusts, he recalls, “the consultants were absolutely unanimous that we had to merge”. Doing so, they argued, would enable them to separate emergency from elective work, to cut wasteful duplication, and create centres of expertise big enough to support sub-specialisation among consultants. “This is a clinically-led merger,” insists Warburton. “We’ve got some fairly modest financial savings in the business case, but that’s about taking out duplication.” Indeed, he’s clear that the two trusts’ high volumes of non-elective work – whose tariffs, he says, do not cover the costs of delivery – will leave the merged organisation in the red for years to come: by 2023, he expects the combined underlying deficit to have fallen only from £85m to £50m.

In 2015, Warburton became chief executive of Aintree trust – which was not in a good way. “In the winters of 2015 and 2016, Aintree was in a permanent state of crisis,” he recalls, with “huge increases in demand” overwhelming capacity. He increased bed numbers and addressed the CQC’s concerns about safeguarding, winning back the trust’s ‘Good’ rating – lost in October 2017. Then, working with RLBUH, he began the painful process of securing approval for the merger.

Hoop-jumping

This involved winning support from the Competition and Markets Authority (CMA), charged with encouraging the inter-trust competition enshrined in former health secretary Andrew Lansley’s 2013 reforms. And the CMA’s test, Warburton explains, was not “whether there was a real loss of competition: [the merger] was always assessed against the theoretical loss. It didn’t matter whether competition was working in practice, because the competition element had been enshrined in legislation.”

Although “there’s nobody left defending the Lansley reforms now,” he says, these regulatory obstacles remain. So the two trusts relied on the support of NHS Improvement/England (NHSIE), which “understood the strategic importance” of the merger and helped them develop the business and patient benefit cases. NHSI’s backing was crucial, he adds, but nonetheless “it’s been really, really challenging. The system is now becoming easier to work with, but this merger’s been achieved in spite of the system – not because of it.”

In August, the CMA finally gave the marriage its blessing – and in October, Warburton became chief executive of the merged trust. Now things are moving: the first departments to merge are trauma and orthopaedics, with Aintree taking over emergency work while non-elective cases go to the former RLBUH’s Broadgreen Hospital. Next will come a series of consultation exercises, testing opinion in local communities and among staff. “Staff side [unions] have been involved all the way through,” he says. “There’s been good engagement meetings, and we would see [the unions] as an essential partner going forward.”

Coming together

There will, he adds, “be a period of change, and we’re trying to work through that with staff in a sensitive way.” The merger of corporate teams such as finance and HR is, for example, creating “a degree of anxiety – though I don’t think anybody thinks it’s the wrong thing to do”. So good management of the change will be crucial: one early task, he explains, is “developing a new vision for the organisation, and defining how that’s underpinned by values and behaviours. We want that to be co-developed with the organisation.” This framework, he adds, will ensure that “those of us in senior leadership positions can be held to account for continual demonstration of those values and behaviours”.

“Go to any part of the health service; talk to GPs, community staff, hospital staff – they’ll all tell you the same story: the fact that the vast majority of patients are still getting a great service is down to the staff, who are working under immense pressure.”

And staff will benefit from the merger, Warburton says – not least from a “richer career structure” offering better opportunities for promotion or specialisation. “A lot of staff turnover used to be people transferring between the two organisations,” he notes.

There are concerns, though, that those opportunities may not be distributed equitably. Aintree trust’s last CQC report called for work to “improve diversity and equality across the trust and at board level”, and Warburton acknowledges the need to “systematically look at some of the reasons why we struggle with that.” Senior leaders are not representative of the workforce, he says: “We’re about to commission a piece of work to see what some of the barriers might be, because clearly a passive approach has not got us to where we would like to get to.”

The new trust’s leaders will also have to consider the merger’s impact on other providers, such as the district general hospitals – some of which are running “potentially fragile services” dependent on tiny teams of consultants. “It’s really important that we’re not seen to be pulling up the drawbridge, particularly around medical staffing,” he says. “Increasingly, consultants want to go into the bigger centres – so we’ve got to make sure that what we do isn’t to the detriment of the wider system.”

Aligning attitudes

Such collaboration is, he says, increasingly prevalent across Liverpool: the city’s health, social care and housing bodies have formed a Provider Alliance to “make sure we’re all working together – and that work is at a more mature level than it’s been for a very, very long time.” By improving systems and relationships, he adds, members can address the “artificial barriers and budgetary constraints” that distort care: “It does not make sense, and it’s not good patient care, to have a patient stuck in an acute hospital bed for the lack of a minor adaptation that needs to be undertaken in their home,” he comments.

Until recently, national bodies’ approach to performance management would have made such collaboration difficult: individual organisations would be penalised if reforms designed to improve the wider system weakened their own metrics. But Warburton says that today’s NHSIE is taking a more “nuanced” approach. “Increasingly, we’re looking to move from organisational performance management to whole system management,” he says, building a system more suited to “the circumstances we’re operating in”.

Those circumstances, though, remain difficult. Health services, Warburton stresses, can’t be seen “in isolation from the wider determinants of health” – such as poverty, poor housing and drug use. “We would be in a better position if we could do more of that upstream work, so we didn’t have such high levels of demand in the hospital sector.”

Saved by the staff

Meanwhile, he says, trusts are maintaining service quality thanks to the commitment and dedication of their staff. “Go to any part of the health service; talk to GPs, community staff, hospital staff – they’ll all tell you the same story,” he says. “The fact that the vast majority of patients are still getting a great service is down to the staff, who are working under immense pressure.”

Demand is unlikely to ease up anytime soon. But as services are reshaped across the new trust, care pathways are improved with other providers and the Royal Liverpool settles into its gleaming new home, the system should become better able to meet it. Then the battered 1960s building will be torn down, and the trust will oversee the huge plot’s redevelopment. “I wouldn’t see this as being a commercial development,” he explains. “I’d want to make sure that it was aligned with the academic health campus and the requirements of the university.”

In time, the creation of Liverpool University Hospitals Foundation Trust should help plug some of the gaps in Liverpool’s revival – improving health and care services, while extending the city’s physical regeneration eastwards. “I’ve long felt that competition in healthcare wasn’t an effective way of delivering services – and now we’re starting to see collaboration,” says Warburton. “There’s horizontal integration, with providers increasingly working together; and there’s vertical integration with communities, local authorities, social services. Everything’s going in the right direction.”

“We’ve got huge ambition for this new organisation,” he concludes. “Now we’ve got to take our people with us.”

This article has been amended to correct errors within the print version. The correct name for the merged trust is Liverpool University Hospitals Foundation Trust, and the new Royal Liverpool University Hospital will be the biggest single-patient room hospital in England – not the whole UK.