MPs say more consideration should have been given to closing Hinchingbrooke Hospital instead of awarding Circle franchise

15:30 12 December 2012

Hinchingbrooke Hospital

Hinchingbrooke Hospital

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MORE consideration should have been given to closing Hinchingbrooke Hospital and transferring services to Addenbrooke’s and Peterborough hospitals.

That was the view of some of the MPs sitting on the Commons Public Accounts Committee on Monday as they looked into the franchise deal for Hinchingbrooke, which gave control of the hospital to private company Circle Healthcare, as well as the bankrupt, newly-built Peterborough City Hospital.

There is not enough work – or enough money – to sustain both hospitals, the committee claimed, and keeping Hinchingbrooke open through the franchise deal while also entering a costly private finance initiative for the £289million Peterborough City Hospital was a poor use of public money.

The committee was meeting to question Circle about its performance since taking over the hospital in February and following a critical report by the National Audit Office which questioned if the company’s projected savings were achievable on the hospital’s £107m budget.

It was also reported that in September the hospital had accumulated a deficit of £4.1m – now about £2.6m – when Circle had promised the deficit would be £1.9m.

The ability of Circle to deliver on its financial promises over the 10-year period of its deal were put under scrutiny, as well as Ali Parsa’s decision to step down from his chief executive role … with a £400,000 payment.

Clinically the hospital was doing well, Mr Parsa told the committee, while financially it could be better. Judge us in the long term, he said.

“When we took over at Hinchingbrooke it had clinical and financial issues,” he told the committee. “Today, clinically, it’s doing very well. It lost about £1m a month when we took over but in October this was down to £400,000 for the month.”

He added: “I think we are doing a very, very good job. It is like judging Mo Farah after 1,000m in a 10,000m race. We have fixed the quality, we will now fix the cost.”

Committee chairman Margaret Hodge, Labour MP for Barking, criticised Mr Parsa for walking away from an important Government health project.

“I know you want to be really honest with us but it stretches our credulity to hear that you have been there six months with this completely new project the Government is engaged in, and you’re off with a year’s money and you are saying this is completely normal,” Mrs Hodge told him.

Mr Parsa defended his decision – and his payment – adding that the rank and file of Circle and Hinchingbrooke Hospital were the people making the project work.

Criticism was also aimed at Sir Neil McKay, chief executive of the East of England Strategic Health Authority, for not providing enough of a strategic view for health care in Cambridgeshire.

Mrs Hodge said: “You took the decision in 2008/9 to have a franchise agreement at the same time as agreeing to build a new hospital in Peterborough. It’s clear that it wasn’t the best decision as there isn’t the money to sustain the hospitals.

“I bet in five years’ time someone will be sitting in this chair and Hinchingbrooke will have failed.”

Ian Swales, Liberal Democrat MP for Redcar, asked if the closure of Hinchingbrooke had been an option discussed by the SHA.

Sir Neil admitted it had not – it was not possible, he said, because there is not enough capacity to move patients elsewhere.

“I am certain that there will continue to be a hospital in Huntingdon, Hinchingbrooke Hospital.

“The reasons for that are many – it’s a much-loved hospital which is strongly supported by its commissioners and by the local population.

“It provides essential local services for local people. It’s my opinion that it would not be possible to close that hospital and to have the services relocated to somewhere like Peterborough, Addenbrooke’s or into the community.”

He also defended the franchise deal, stating that the financial risk was Circle’s and that the NHS would not have to bail out the hospital – something that has happened in Peterborough to the tune of £46m, with a similar sum expected from the Government early next year.

Hinchingbrooke’s historic debt, which Circle will have to try to repay over the course of the franchise, is £40m.

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