‘Historic’ deal sees NHS trust run by private hospital group offering NHS patients Michelin-starred chefs

The NHS has signed a history-making deal with a private hospital group which will run a debt-laden hospital for ten years.

Contracts were signed yesterday evening between Hinchingbrooke Health Care NHS Trust and Circle, which will take over the management of the hospital from 1 February 2012.. The clinical and non-clinical services will continue to be provided by the Trust but will be managed by Circle, via a franchise agreement.

Circle was chosen as the preferred bidder to run the Trust in November 2010 following a 13 month procurement process. Another hospital group, Ramsay Health Care UK submitted a bid outside of the guidelines so was not invited to tender. Today’s announcement follows a 12 month period of scrutiny by the Department of Health.

Dr Stephen Dunn, director of policy and strategy at NHS Midlands and East which has managed the project to find a franchise partner, said the signing of the deal was a “momentous day”.

“Without this partnership, the future for Hinchingbrooke could have been uncertain,” he said. “Now, we have a solution which aims to repay the hospital’s taxpayer debt of almost £40m, as well as giving it the best chance of a sustainable future. Patients will continue to receive high quality NHS services from NHS staff in the NHS hospital they know. This is not privatisation. Staff and assets will remain in the NHS.”

Although both Circle and the NHS have emphasised that staff and assets will remain within the NHS, and that patients will continue to receive NHS services, concerns about privatisation have already been voiced. Although Circle describes itself as a “social enterprise” in the John Lewis mould (it is 49.9% employee-owned) it is partly owned by venture capitalists and recently listed on the stock exchange.

UNISON, the UK’s largest union, has warned that the deal “could lead to a second Southern Cross crisis”, referring to the collapse of care home operator Southern Cross.

Christina McAnea, UNISON’s head of health, said: “We know that the Government is intent on privatising our NHS – that is the clear outcome of the Health and Social Care Bill. Privatisation, which brings in the profit motive, will damage our NHS.”

The union has expressed “huge concerns” that jobs will be cut as part of the drive to return the hospital to financial stability.

“The hospital could have been kept running for the benefit of patients, rather than profiteers,” said McAnea. “This must not become a precedent for the NHS, or millions more staff and patients will be put at risk.”

The NHS body overseeing the deal has said that the franchisee “may well identify scope for improving efficiency and performance”, but cited the transfer of more services into the community or an extension of hours, rather than job losses.

Circle has been keen to emphasise the efforts at staff engagement undertaken in recent months. It already owns private hospitals in Bath and Nottingham, surgery units in Stratford upon Avon and Windsor and is building a private hospital in Reading due to open in late 2012. However, it does not yet have experience of running the full range of services available at Hinchingbrooke such as accident and emergency and maternity services.