MPs blame Ministers for plight of hospitals

The Department of Health came under attack yesterday after a damning report criticised a decision to build a new hospital and award a franchise to a private firm to run another one a few miles away.

The Commons Public Accounts Committee (PAC) said there had been a “complete lack” of strategic oversight over the building of a private finance initiative (PFI) hospital in Peterborough and allowing Circle Healthcare to run the nearby Hinchingbrooke Hospital. The decision left two hospitals whose financial viability and future was in doubt, said the committee.

Stewart Jackson, Conservative MP for Peterborough, and a member of the committee, said the strategic management of health resources across the East of England Strategic Health Authority (SHA) had failed. “Ultimate responsibility for this rests with the Department of Health,” he said.

Mr Jackson added that the PFI deal had proved “catastrophic”, with the health department now paying almost £1m a week to keep the trust afloat. There will have to be “unprecedented” levels of savings for the two NHS trusts involved to become viable, leaving the future of both in doubt, with “unknown consequences” for patients and the taxpayer, he added.

The PAC report said the Peterborough and Stamford Hospitals Trust had accumulated a deficit of £45.8m by the end of 2011/12, on a turnover of £208m, a ratio of 22 per cent, the highest in the NHS.

“The trust’s financial position is now so serious that, even if it achieves challenging annual savings, it will still require significant financial support of up to £26m a year for the next 30 years to remain viable,” said the report.

Circle aims to achieve savings of £311m over the 10-year franchise contract, but the MPs said the company had not achieved the savings it expected in the first few months of operation, and had parted company with its chief executive only six months into the project.