THE private firm which runs Hinchingbrooke Hospital has defended its application for a £3.5million loan from the Department of Health.

Circle says it intends to use the money to fund improvements to the Huntingdon hospital's infrastructure, including the development of a new critical care centre.

If agreed, it will be the second loan secured by the healthcare company from the Government, after it successfully applied for £1million last year to cover the cost of roof repairs.

A Hinchingbrooke spokesman said: "This refurbishment was a long-standing plan from before Circle took over the franchise. Hospitals across the country apply for similar capital funding to improve facilities for patients every year - it is a great opportunity for the NHS.

"If the application is approved, the loan would be ring-fenced and could only be used by Hinchingbrooke for investment in infrastructure for the benefit of patients.

"Last year, Circle invested £3.7million of its own funds to improve the quality of patient care at Hinchingbrooke and taxpayers didn't have to pay a penny extra."

Unions have expressed concerns about the private company's ability to run a hospital and have urged the Government to intervene.

Steve Sweeney, the GMB's regional organiser for the NHS in Cambridgeshire, said: "Our position is that the Department of Health should say no, step in and put an end to the contract and return it to the NHS.

"Staff satisfaction levels are dropping and two key figures (former Ali Parsa, of Cirle and Jim O'Connell, at Hinchingbrooke) have left within a year of the contract being awarded.

"When things like that happen it does not bode well for long-term sustainability."

Meanwhile, The Hunts Post understands Circle is among the companies to have expressed an interest in providing health and social care services for elderly people in Cambridgeshire and Peterborough, a contract reportedly worth between £700million and £1.1billion.

Bosses are thought to be keen to integrate the care it already oversees at Hinchingbrooke with looking after older people.

Potential providers of the service have filled in a questionnaire and will find out in August whether they have made it to a shortlist and will be invited to bid.

A spokesman for Cambridgeshire and Peterborough Clinical Commissioning Group, which is overseeing the bidding process, said firms and organisations that were taking part could not be identified at this stage.

She added: "The CCG's over-riding objective is to improve outcomes and service quality for older people.

"The current procurement will encourage existing and new providers to think about how they can better integrate services in order to keep people as well as possible.

"We are keen to see providers innovate as part of the procurement, and as such are open-minded about who will ultimately provide the service."

Mr Sweeney said he would be concerned if Circle was awarded the contract. "The big worry is whether their finances are in good enough shape for them to sustain Hinchingbrooke Hospital and older people's services."