First privately run NHS hospital admits failure

Labour's Andy Burnham blames the government 'for the mess'. Picture: PA
Labour's Andy Burnham blames the government 'for the mess'. Picture: PA
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THE first private healthcare operator to run an NHS hospital trust is to pull out of the deal, sparking a political row and warnings that staff and patients face “huge uncertainties” about the future.

Unions said that privatising Hinchingbrooke Hospital in Cambridgeshire had been a “dangerous government experiment” which was guaranteed to be a failure.


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Circle Holdings said the level of cash it had pumped in to prop up Hinchingbrooke Healthcare Trust was about to reach £5 million, meaning it would have the right to terminate the franchise. It pointed to “significant changes in the operational landscape for NHS hospitals” since the contract was first procured in 2009.

Circle said there had been unprecedented increases in accident and emergency attendances, a lack of care places for patients awaiting discharge, and funding had been cut by 10.1 per cent this financial year.

Labour blamed the government, saying the coalition appointed Circle in November 2011 and so “must take responsibility for the mess”. Shadow health secretary Andy Burnham said: “Patients who rely on Hinchingbrooke will be worried about their hospital following this announcement and ministers must provide urgent reassurance and set out a plan to ensure the continuity of services at the hospital in this uncertain time.

“The government were explicitly warned two years ago about the risky business model Circle were operating, but failed to take any action. Given that these risks were known at the outset, ministers must explain why they judged Circle a safe choice to run this hospital. They must also set out today how long they have known about the problems at Hinchingbrooke.”

But Health Secretary Jeremy Hunt said Mr Burnham should “stop playing politics”, tweeting: “He signed off decision to allow private sector operator.” He added: “This government makes no apology for seeking solutions for failing hospitals. We won’t be deterred from tackling poor care and driving up standards.”

Unions opposed the privatisation from the start, and said that “forcing” a privatised model on the NHS was never going to work.

The company said conditions had “significantly worsened” in recent weeks, adding that it had already pumped £4.84m into the trust and would be “highly likely” to have to make further support payments that would breach the £5m cap.

It said it was facing an imminent report from the Care Quality Commission which it expected to be “unbalanced”.

Circle began operating Hinchingbrooke in February 2012, the first time the management of an NHS trust had been delegated to a private company.

It warned in August that changes to funding mechanisms had left “uncertainty over Hinchingbrooke’s profitability over the next year” though it said its “patient-centred and innovative approach should ensure the long-term sustainability of the contract”.

A statement said: “Circle today announces that it has determined that its franchise to operate Hinchingbrooke NHS Trust is no longer sustainable under current terms and that it has entered into discussions with the NHS Trust Development Authority with the view to ensuring an orderly withdrawal from the current contract.”


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