Hospital Dr News

Taxpayers “exposed” by Hinchingbrooke deal

Oversight of the Hinchingbrooke Hospital contract – the first allowing an NHS hospital to be privately-managed – was “poor and inadequate”.

This is conclusion of MP Margaret Hodge, who chairs the all-party Public Accounts Committee.

She said taxpayers were left “exposed” by the decision to allow Circle to run Hinchingbrooke Hospital in Cambridgeshire.

In February 2012, Circle took operational control of Hinchingbrooke Health Care NHS Trust, but in January of this year it gave up its contract, citing “unprecedented” increases in A&E attendances and funding cuts. It was just three years into a 10-year franchise.

Hinchingbrooke Health Care NHS Trust is a small district general hospital in Cambridgeshire, with some 250 beds and nearly 1,500 staff. In 2013–14, the Trust had an annual income of £111.6 million.

Also in January the Care Quality Commission published the results of its inspection of Hinchingbrooke, which gave the Trust an overall rating of ‘inadequate’.

The Trust disputes the CQC’s assessment, but Circle said that the inspection was not the reason for its decision to withdraw from the contract.

Hodge said: “Whilst this was an innovative experiment we are concerned that none of those involved in the decisions has been properly held to account.”

Hinchingbrooke had a history of financial difficulties and had an estimated underlying deficit of between £3 million and £4 million in 2011–12. In 2007, the Department of Health gave the then Strategic Health Authority approval to explore options to implement a new management structure at Hinchingbrooke, with the aim of making the Trust financially sustainable and enabling it to repay the cumulative deficit.

Following a procurement process, the Strategic Health Authority awarded Circle a 10-year operating franchise beginning in February 2012.

Under the terms of the franchise agreement, the Trust’s services, staff and premises remained within the NHS but the management functions passed to Circle, which is responsible for meeting the requirements of the agreement and ensuring that safe and high-quality NHS services are provided to the public. The Trust board is responsible for monitoring performance against the franchise agreement.

Cambridgeshire and Peterborough Clinical Commissioning Group monitors the clinical performance of the Trust. At national level, the NHS Trust Development Authority oversees the performance of all NHS trusts, including Hinchingbrooke, and the Care Quality Commission regulates the quality and safety of care.

The DH is ultimately responsible for establishing systems that protect health service users and taxpayers.

Circle now expects to hand back responsibility for running the Trust to the NHS by the end of March 2015.

The firm said taxpayers still saved £23m through the deal.

The committee says the DH and the NHS Trust Development Authority should report to it on the total cost to the taxpayer arising from the failure of the franchise, including the costs of transition arrangements and the total cost of covering the financial deficits incurred during the franchise.

“Accountabilities and responsibilities are fragmented and dispersed across the health system, as indicated by the number of witnesses we had to call to answer for what happened at Hinchingbrooke,” the committee said.

The NHS Trust Development Authority, which was tasked with monitoring progress, did not oversee this high risk venture effectively, it said.

The committee recommends that strong governance and clear accountabilities are put in place for future novel or high-risk ventures, and that there is strong and effective monitoring.

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One Response to “Taxpayers “exposed” by Hinchingbrooke deal”

  1. Malcolm Morrison says:

    This would appear to be yetr further ‘evidence’ that funding of the NHS (both in amount and the SYSTEM) is failing to produce the desired results.

    I hope that The Govt., the DoH – or whichever bureaucratic body or QANGO is acting on their behalf – will sue Circle for ‘breach of contract’ and demand suitable comensation. This might deter other ‘private contractors’ from taking on contracts that they cannot fulfill.

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