Where Hinchingbrooke’s �39m debt came from

THE new era at Hinchingbrooke is the culmination of a series of events over the last decade that resulted in the hospital’s running up debts that the NHS claims amount to nearly �40m – a large proportion of it through a series of double-counted accounting errors.

Now that the hospital is ‘washing its face’ in its day-to-day finances part of Circle’s brief will be to start to pay off that debt.

The trouble started when the trust’s board decided to build a �22million treatment centre on the back of undertakings from district primary care trusts to send patients there when the Private Finance Initiative project opened. But the patients did not appear in sufficient numbers, the centre cost more to run than it was taking in, and the debts started to mount.

On top of that, because Hinchingbrooke was one of the more efficient District General Hospitals, it was penalised under transitional arrangements for ‘Payment by Results’, which meant that, for every given treatment, every hospital was paid the same fee.

Hinchingbrooke was required to give 20 per cent of that money back to the Department of Health to fund inefficient hospitals elsewhere. But, through an accounting error that managers failed to spot until a new interim chief executive took over the failing trust, Hinchingbrooke paid �11.5m too much. And, even though the Government acknowledged it was the wrong figure, the Department of Health made Hinchingbrooke repeat the over-payment the following year.

So, on any reasonable basis, Hinchingbrooke’s indebtedness should probably be less than half the �39m that sits on the balance sheet.