Northumberland hospital buy-out approved in country first
A leading north east health trust has become the first in the NHS to agree a loan with a local authority partner which will save millions of taxpayers’ money to be reinvested in frontline patient care.
Northumbria Healthcare NHS Foundation Trust has been given approval from the Government and Monitor – the independent regulator of NHS Foundation Trusts – to terminate its private finance initiative (PFI) contract which enabled Hexham General Hospital to be built ten years ago.
The termination is being made possible by a loan from Northumberland County Council in a deal that reflects the strong partnership that exists between the local authority and Northumbria Healthcare and is believed to the first of its kind in the country.
The Trust has calculated savings of around £3.5million per annum, which will be realised by terminating its PFI contract early for Hexham General Hospital and by working with Northumberland County Council to agree terms for a new loan. The deal, approved by HM Treasury, has been made possible thanks to the borrowing powers which are available to local authorities and will not impact on any other public council resource.
Jim Mackey, chief executive of Northumbria Healthcare NHS Foundation Trust, said: “We are delighted that we are able to progress this agreement which delivers real value for money for taxpayers and helps save millions of pounds which will be reinvested directly in patient care.
“Without PFI, we would never have been able to build the fantastic facility we have today at Hexham General Hospital which has served people in Northumberland so well over the last decade. However, given the financial challenges facing the NHS we must constantly look for new and innovative ways to deliver good value.
“It is down to our excellent partnership approach and working relationship with Northumberland County Council and our strong financial track record that this agreement has now been given the go ahead. We will of course continue to explore further innovative ways to bring down borrowing costs as we continue to invest in developing our services.”
Hexham General Hospital was opened in summer 2003 and treats thousands of patients every single year. The hospital has over 80% of accommodation in single en-suite rooms providing the utmost privacy and dignity with many north east patients choosing Hexham’s first class facilities for their planned care.
Dave Ledger, deputy leader of Northumberland County Council, said: “This announcement is excellent news for local people and the local economy. The loan we have agreed with Northumbria Healthcare NHS Foundation Trust represents good value for the residents of Northumberland as it will reduce overall borrowing costs and release resources to support frontline health and social care services across the county.
“This is a result of the very strong and close working arrangements that have existed between Northumberland County Council and Northumbria Healthcare for a number of years, resulting in some of the best examples of integrated health and social care in England.”
Northumbria Healthcare has been working with Northumberland County Council for over ten years to develop joined up ways of working and deliver better integrated health and social care services.
Teams of hospital doctors, community nurses and adult social care workers across Northumberland are all managed by Northumbria Healthcare in a unique arrangement which means seamless care for patients.
Northumbria Healthcare’s very strong financial history has also recently been acknowledged by an independent global ratings agency ‘FitchRatings’ who have assigned the Trust with the best possible rating figure outlining its stable financial position – this is the first rating of its kind for an NHS Foundation Trust.