Campaigner: Private finance ‘too risky’ for hospital

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A HARTLEPOOL campaigner has called on health chiefs to learn the lessons from a nearby trust looking set to borrow £100m to get out of costly private finance contracts for hospital building projects.

Keith Fisher said news that Northumberland County Council is proposing to loan Northumbria Healthcare NHS Foundation Trust £100m is a prime example of why private finance initiatives (PFI) are too risky.

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Mr Fisher is chairman of the Save Our Hospital campaign group, which is against plans to build a new £300m hospital at Wynyard.

The Wynyard site – which could be funded by PFI – would replace the University Hospital of Hartlepool and the University Hospital of North Tees, in Stockton.

The proposed 25-year loan would allow the Northumbria Healthcare NHS Foundation Trust to buy itself out of the remainder of expensive PFI contracts for work on Hexham Hospital and the second phase of Ashington’s Wansbeck General.

Northumberland County Council bosses say the loan would allow the trust to save money by terminating the PFI contracts and help prevent potential cost-cutting reductions in hospital and community services across Northumberland.

Mr Fisher said: “The neighbouring NHS trust is looking to buy out the long-term deal and looking to borrow money from the council to do so.

“If that does not raise concern here then I don’t know what does.

“How dare our trust try and go down that route when a neighbouring trust is having to be bailed out.

“This is a real-life example of a neighbouring trust trying to get out of a PFI mess, which our trust is hoping central government will underwrite for them.”

When asked whether Mr Fisher feared that a similar situation could arise in Hartlepool, he added: “I would hope that we would not get to that stage.

“The lesson is there to be learned.”

Alan Foster, chief executive at North Tees and Hartlepool NHS Foundation Trust said: “To provide the best facilities and high standards of care we’re still committed to building a new hospital in the centre of the area we serve, supported by excellent transport links.

“The scale of investment needed for the new hospital means we would be unable to come to a similar arrangement with our local authorities. Currently the government is reviewing the private finance initiative and while we await the outcome of that review we are exploring other avenues for funding. Early discussions with pension funds have been encouraging.”

Last month the North Tees and Hartlepool NHS Foundation Trust revealed the Wynyard plans have been hit with a further delay after it emerged that a decision on government backing is not expected until July at the earliest.

Officials from the Department of Health are still considering the outline business case, while there is an ongoing review of using PFI funding for major developments.

Trust bosses are also looking at alternative sources of funding including from private pension fund holders.

Executive member for corporate resources at Northumberland County Council, Andrew Tebbutt, said: “The trust is locked into PFI contracts which are costing it a lot of money and one option is to borrow money from the council.”

Northumbria Healthcare NHS Foundation Trust chief executive Jim Mackey said at the time that PFI was the only option to complete Hexham and Wansbeck hospitals.