HINCHINGBROOKE Hospital in Huntingdon made an operating surplus last year, in spite of the cloud of privatisation hanging over it because its claimed under-performance. Quite how much money made depends on the basis on which it is judged. An operating surplus of just over £3million turned into a retained deficit of £1,65m after payment of dividends to the Department of Health and accounting changes. But, against its statutory duty to break even, it made a surplus of almost £600,000, according to the hospitals annual report. That surplus is a key component in the way private sector bids to manage the hospital from next April will be judged. Current performance will be used as a benchmark to decide which of the two remaining bidders should be preferred or, theoretically, whether the current management is doing a better job than either of the potential newcomers would. Outgoing chief executive Mark Millar, who left the hospital in May and is now trying to rescue a troubled hospital in Milton Keynes, said that what is known as the Hinchingbrooke Next Steps franchise process, led which has been going on since the public consultation of February 2007, had had the effect of being a cloud hanging over the organisation. This means that 2010/11 may be the final year under the current arrangements, but, to ensure services are provided in a safe and robust manner, normal management arrangements are continuing to take place to avoid any kind of planning blight, he said. The [hospital] trust does have a key role in the Next Steps process, as our strategy team is working to produce a trust comparator, which in effect sets the bar, which all bidders would be expected to have to beat to be awarded the franchise. Mr Millar added: This past year has been challenging for the trust, but overall performance has been good against the main indicators. The financial performance of the trust has continued the pattern of the last three years, with a modest operational surplus. However, this year we have to take account of a new method of valuation of the estate. This means that the final income and expenditure position will unfortunately show a deficit for the year. However, the hospital had invested a total of around £5m, much of it in meeting standards for single sex accommodation and reducing the likelihood of MRSA and clostridium difficile infections. And it had already identified savings of £3m (on turnover of more than £90m) ahead of the current year, during which a further £4m investment was planned, though some proposals may fall foul of Government cuts. Infection rates reduced even though the hospital just missed its C. diff target thanks in part to a new £800,000 cleaning contract. Infection targets for the current year are that Hinchingbrooke should have no more than two cases of MRSA and fewer than 37 C.difficile. Human resources director Anita Pisani said recruitment and retention had been among the most critical issues facing the hospital over the year and was likely to continue to impact in the future. Particular challenges have been with regards to registered nurse, medical middle grade and consultant recruitment and, to combat this, the trust has used innovative recruitment methods wherever possible, she added. Compliance with the European Working Time Directive (EWTD) would increase the cost base of the service, she predicted.