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Cuts fear at privatised NHS trust

Bosses at the UK's first privately-run NHS general hospital have insisted they will improve standards despite claims that they will need to make "eye-watering" savings.

The statement from Circle, the company in charge of Hinchingbrooke Health Care Trust, comes as the Health Service Journal (HSJ) publishes a report saying the hospital will need to make surpluses of at least £70 million over the next decade if it is to clear its debts and meet Circle's contracted share.

Circle began its 10-year management franchise at the struggling Huntingdon-based hospital in February in what is seen as a potential model for other hospitals across the country.

Ali Parsa, chief executive of Circle, said: "Projections in the bid process showed the potential losses facing Hinchingbrooke in the coming years could reach many tens of millions.

"We have been tasked to stop taxpayers losing this money. Our plan is not only to do this and make the hospital sustainable, but to turn it into one of the best district general hospitals in the country.

"Only when we succeed in our ambitious goal will there be rewards to share fairly between our partnership, which includes Hinchingbrooke staff, our start-up backers and the local health economy. Circle has always re-invested profits back into building our partnership and services, and will continue to do so."

A letter deposited in the House of Commons library by Earl Howe, a junior health minister, and uncovered by the HSJ, details the terms of the deal.

A statement from the HSJ said: "The first £2 million of any year's surplus goes to Circle; the company then takes a quarter of surpluses between £2 million and £6 million, and a third of surpluses between £6 million and £10 million.

"The terms mean the trust, which has an annual income of around £100 million, will need to make a surplus of at least £70 million to clear its debts. 44% of that money would go to Circle."

Christina McAnea of Unison said: "Any surpluses should be going directly into improving patient care or paying off the hospital's debt, securing its future for local people - not ploughed into making company profits. The hospital was already struggling, but the creep in of the profit motive means cuts will now be even deeper."

From Belfast Telegraph