Private company appointed as recommended bidder to run NHS acute hospital

A private health company has been appointed as recommended bidder for an NHS hospital in Huntingdonshire, but senior NHS officials have insisted that the move does not represent privatisation.

The deal, which will see Circle run Hinchingbrooke Hospital, is the first time an operation franchise has been offered for an NHS acute hospital in England. “Uniquely it was achieved via an open and competitive process,” NHS East of England said in a statement.

Key elements of the deal are:

• Circle will be appointed for a 10-year franchise term, taking over from 1 June 2011
• Within that period it is planning to repay all the hospital’s £38.8m historic debt
• There is no subsidy
• Staff and assets remain part of the NHS
• Clinical and non-clinical services will be provided via the operating franchise agreement
• A full range of acute hospital services – including accident and emergency and maternity services – will be provided. However. services provided by other organisations such as Cambridgeshire Community Services NHS Trust, through contractual arrangements with NHS Cambridgeshire, are unaffected.

The Department of Health will now consider whether to approve Circle’s appointment. The unsuccessful bidder was Serco.

More details of the deal will be made public once it is approved by the Department and other regulators.

“Until that time they remain commercial and in confidence, in accordance with UK and international purchasing law,” NHS East of England said.

Dr Stephen Dunn, Director of Strategy at NHS East of England, said Hinchingbrooke was heavily indebted and might have had to close or receive a large subsidy from the taxpayer.

“Thanks to this process this is not the case,” he added. “This is not privatisation. Staff and assets will be protected, and the taxpayer will not be forced into bailing out Hinchingbrooke. This could be a model for hospitals that face similar challenges.”

Ali Parsa, Circle’s managing partner, said its co-operative model offered a “Big Society” solution for the hospital. Circle is an employee-owned social enterprise with more than 2000 clinicians. It already has day surgery hospitals in Nottingham and Burton that provide NHS services to 130,000 NHS patients a year.

“This is a great opportunity for a social enterprise and local clinicians to come together to lead the next chapter in the long and successful history of the NHS,” Parsa claimed.

Dr Paul Zollinger-Read, chief executive of NHS Cambridgeshire, which commissions services at Hinchingbrooke, said the appointment was a good solution. “The thorough and robust tender process has secured a sound foundation from which we can continue to commission services at the hospital,” he suggested.