PRIVATE hospital asks govt for £3.5M loan while renewing £200M contract

You couldn’t make it up. Stafford hospital was placed into administration by the government for supposed financial ‘unsustainability’, in spite of the Trust being ahead of financial targets agreed with the Dept of Health (DH) and regulatory body Monitor just last year.

The ‘Trust Special Administrators’ appointed over Mid Staffs will give their final recommendations on Wednesday. Those in the know are trailing that the decision will be a bad one for the people of Stafford and its surrounds, 51,000 of whom marched for the preservation of their hospital to little media attention, with the hospital radically downgraded and residents forced to endure a likely 45-minute journey (or often longer) to reach emergency care.

The battle to save Lewisham hospital goes on, as residents fight desperately to overturn a decision to downgrade their hospital to little more than a hip and knee replacement centre because a different London Trust got into financial difficulties.

All across the country, smaller hospitals face downgrade or complete closure as the government pushes its plans to rationalise hospitals into larger centres against the wishes of residents (so much for choice and local empowerment, then), and invitations to private bidders to take over parts of services or even whole hospitals abound.

Meanwhile, a private hospital, run by a group which has just won a renewed £200 million contract, asks the government for a loan of £3.5 million.

Circle – whose major shareholders are regular contributors to Tory party funds and who employ at least one former Tory health team member (see here for more info) – has asked for this bailout in order to ‘accelerate’ its capital programme at Hinchingbrooke hospital, which it has been running since it was awarded the contract under this government in 2010.

This government tells us that the cupboard is bare – that there is no money to fund services or keep the poorest out of poverty, and that ‘unsustainable’ hospitals are a luxury that we cannot afford.

It tells us, in spite of the recent G4S debacle and others like it, that private companies run a ‘tighter ship’; that they are leaner, more efficient, and give better value for taxpayers’ money – in spite of the obvious flaw in the argument, which is that if you’re taking profits out of the total funding, that money will never be spent at the frontline.

Both claims are being flouted by the current situation.

Circle has major assets in the health sector, but asked its shareholders to stump up another £46m a year ago, after pre-tax losses of almost £33 million. Seemingly it’s still unable to ‘accelerate’ its own capital spending on a hospital it is running without government help, in spite of being effectively handed the hospital for nothing when it won the contract to run it.

The government tells us, as it cuts benefits to the poorest again and again, cuts nursing numbers and closes hospitals and other health facilities, that we can’t afford handouts, that the only facilities we can keep are those which are ‘sustainable’, ie. self-funding.

But it seems it’s ok to be unsustainable – and ok to hold out a hand to the government for help – if you’re a private company owned by people who contribute large sums of money to Tory funds and that offers ‘jobs for the boys’ to ex-members of the Tory health team. ‘Private more efficient’? Pull the other one.

Please share – and remember – this. Our intelligence is being insulted at the same time as we’re being robbed. Insult and injury, and neither must be forgotten nor forgiven.


  1. Ain’t it great being a private company. Bid what it takes to secure the contract and hold your hand out for a taxpayer bail out to fulfill the contract.

  2. If you could do with an international academic refutation to the alleged efficiency and better outcomes of the private sector there is a really good paper by Basu, Andrews et al of the USA (can’t remember which university). They have looked at middle to poor income countries, but what is going on is shocking, and includes the requirement to privatise their state healthcare before they can get loans. Outcomes are worse,and transparency around the poorer outcomes is far worse than the NHS (a “black box”)

    1. Private hospitals in the US have an extra member of staff per operating room to tot up every single suture etc used. Hardly likely to reduce costs.

  3. Have just heard that Burton Hospital has recruited 2 members of staff, clerical, and there are no jobs for them to do. They said they have to spend the money

  4. Re Lewisham hospital. The Trust of which it is a part is targeted as the next in line for major privatisation. It was reported (damned if I can remember where..) that the PFI debt, with which this Trust was being crippled, would be paid off by the Government, as part of the tendering process, as they didn’t want the private company who won the contract to be ‘burdened by historic debt’. I swear I didn’t dream this.

  5. Reblogged this on Grannie's Last Mix and commented:
    Steve’s right when he says you couldn’t make this up. Its beyond belief. And where is Monitor in all this? The body charged with ensuring that providers of healthcare don’t engage in uncompetitive practices? Well, if Circle can get away with asking for a £3.5 M loan from government the same should apply for Stafford and any other hospital surely. The issues raised by this post go to the very heart of the Health Bill and I for one shall be emailing my MP to insist he raises deep concerns with Jeremy Hunt.

  6. Reblogged this on Vox Political and commented:
    The government tells us, “in spite of the recent G4S debacle and others like it, that private companies run a ‘tighter ship’; that they are leaner, more efficient, and give better value for taxpayers’ money – in spite of the obvious flaw in the argument, which is that if you’re taking profits out of the total funding, that money will never be spent at the frontline”. And Circle Health is telling us that it is even putting profit before the investment it acknowledges that it needs to carry out, and going back – cap in hand – to the taxpayer for another handout.

    How long do we have to put up with these corporate spongers, scrounging cash from a government that must be either gullible to the point of drooling imbecility or utterly corrupt, with the latter seeming more likely every day?

  7. In the much awaited “Friends and Family” test (would you recommend this hospital you’ve just used to your friends and family?) – national results out today – the Stafford A&E ranked in the top 10 in the country. Closure will follow, obviously; I mean, we can’t keep good quality local departments open can we – especially if they are run by the NHS (imagine the hype and champagne corks flying if it had been the first privatised A&E, oh hang on a minute, A&Es make a loss so wouldn’t be of interest to the private sector unless subsidised).

      1. Apologies for the inaccuracy in the above, which you spotted anyway by going to the source data when it became available. What I said was what I heard but it was probably in the top 10% or top 10m DGH A&Es. The material point is, of course, unchanged.

  8. I totally disagree. I believe in letting the Trusts and private companies compete to run NHS services. If the private companies are taking money out (re profit) and the Trusts are reinvesting, then presumably the Trusts won’t have a problem.

    1. Nonsense, because the private companies are paying less, to the detriment of the local economy and free from the constraints of national frameworks which provide decent incomes to the health-workers we all need.

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