The losses built up by Hinchingbrooke Health Care Trust in its first two years under private management are just £150,000 short of the £5m ceiling at which the contract could be terminated.
According to the half yearly report of Circle - the firm contracted to run the hospital - it made £4.85m in “cumulative support payments” to the trust since the contract started in February 2012.
This represents an almost 40 per cent increase on the accumulated loss for 2012-13 of £3.5m. Under its 10 year contract with Hinchingbrooke, the firm has agreed to pay any deficit at the trust - in the form of support payments - up to a cumulative total of £5m.
After this point “both parties must agree the basis for the continuation for the franchise”, the report said.
Although either Circle or the trust could then terminate the deal, this would require Circle to pay Hinchingbrooke a £2m fee.
Circle’s report admitted to “uncertainty over Hinchingbrooke’s profitability over the next year”, raising the possibility that the limit could be broken this year.
Read more in HSJ.