Circle in deal to run Hinchingbrooke NHS hospital


CEO of Circle Ali Parsa said the company has always reinvested profits back into services.

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A groundbreaking £1bn, 10-year deal for a private firm to run a struggling NHS hospital has been confirmed.

Circle is to take over Cambridgeshire's Hinchingbrooke Hospital in February - although it will stay in the NHS.

The deal will see Circle assume the financial risks of making the hospital more efficient and paying off its £40m of debts.

But fears have been raised it could pave the way for "wholesale transfers" of hospitals to the private sector.

There are a group of about 20 hospitals which have run into financial difficulties and Labour accused the government of wanting to see more of these deals under its shake-up of the health service.

The accusation was denied by ministers.

Nonetheless, the Circle deal is being seen as a significant step in the evolution of the health service.

Although private sector firms already operate units that treat NHS patients - such as hip replacement centres - the firm will become the first non-state provider to manage a full range of NHS district general hospital services.

The franchise deal with Circle was developed after concerns that the hospital had become unviable, and a local campaign to maintain services.

The company has to maintain services, including A&E and maternity, if they are wanted, although it is free to reduce staff numbers.

But any significant changes in services at the hospital will have to be agreed with the local NHS and the public will have to be consulted.

John Lewis model

Dr Stephen Dunn, from the NHS in the East of England, said the hospital will continue to be paid at NHS rates for its work while it is being run by Circle.

"It's a hugely original deal - we've managed to avoid the possibility of closing the hospital. We've got a solution to the debt - and have plans that allow us to meet the efficiency challenges the NHS faces."


For the moment this deal is a one-off, but other hospitals are struggling financially. About 20 in England have been named by ministers as being unviable in their current form.

It follows a review which all NHS organisations in England have had to undertake of whether they can meet the financial standards required to be given the status of a foundation trust.

Some may try to merge with more successful nearby NHS hospital trusts. Others will watch what happens in Hinchingbrooke with interest.

If Circle manages to maintain the range and standards of care at Hinchingbrooke, but cut costs, that in itself could put pressure on NHS managers at other hospitals to do the same.

And, as this deal has been subjected to very detailed scrutiny by the Treasury, it could also mean that other similar contracts could be agreed more quickly.

Circle chief executive Ali Parsa accepted the company was taking on a challenge. He said the strength of its approach was in increasing the involvement of doctors and nurses.

"We want to create a John Lewis-style model with everyone who works there in charge of the hospital, letting them own the problems and solve them. We will try everything we can to make this small hospital viable - if we can how fantastic would that be?"

The deal has taken almost a year from the plans being sent to the government for approval, to the contract being given the go ahead. The approval for the tendering process began under the last Labour government.

Circle, like other independent health providers, has experience of providing planned care but not of running a full range of services including emergency and maternity care.

The deal is controversial and not all are convinced this is the only solution to keeping Hinchingbrooke open.

Public sector union Unison's head of health, Christina McAnea, said a new management team could have been found without putting a contract out to tender.

Phil Green from Unison: "We do not welcome the taking over of an NHS hospital by a private company"

"We just don't accept there is no expertise within an organisation the size of the NHS, and to turn to the private sector which has a very patchy record in delivering these kind of services is an accident waiting to happen."

Shadow health minister Liz Kendall added: "Patients and the public will be deeply worried that they have seen this government's true vision for the future of our NHS with the wholesale transfer of entire hospitals to the private sector."

She added that the government's health bill "actively encourages" such moves.

But health minister Simon Burns said the move did not provide a "blueprint" and denied it represented a privatisation, pointing out that the staff would remain in the NHS as would the buildings.


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  • Comment number 355.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 354.

    308 by nhs fan - nice try

    private hospitals have itu to deal with this sort of problem

    my father had a quadruple bypass - a problem developed and a specialist tram were assembled at 11pm to stop/restart is heart

    no extra payment as the price was all 'in' - and included a clean room with no mrsa/c diff problems!

  • Comment number 353.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 352.

    private management = bad for the public

  • rate this

    Comment number 351.

    Fine . . but I won't be giving them any money. . EVER.

    And if we do see an eventual dismantling of the NHS . . I want to see the appropriate MASSIVE reduction in taxes , as do all my tory friends ? right ?

  • rate this

    Comment number 350.


    Is the BBC creating its own agenda again. Who is behind this left wing manipulation?"

    You're just like my teenage daughter when she doesn't get her own way "It's NOT fair", this is still a democracy and we still have a vote - get over it.

  • Comment number 349.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 348.

    #271 Rebecca Riot
    I think what you are trying to say is you didn't get the result you wanted at the election held 18 months ago so we have to keep having them until you get the result you want? Presumably you want Lab to win who would spend your grandchildren's money to fund you?
    Why not give this a chance? The hospital was financially failing so it was this or close it. I know what I prefer!

  • rate this

    Comment number 347.

    Quote Wikipedia
    Privatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from the public sector (the state or government) to the private sector (businesses that operate for a private profit) Unquote:

    Sounds like privatization to me too. Welcome back - the same old Tories! Soon we'll see hospitals catered for 'the select', goodbye NHS!

  • rate this

    Comment number 346.

    @Adrian M Lee

    Who said : "One word: tough."

    It will be indeed tough once NHS is defaced beyond recognition, one of the biggest myths of private healthcare is that it is affordable or even of good quality for anyone but the very richest, a sad fact the majority of this country will wake up to "kicking and screaming" as you say, but once they realise what they have lost.

  • rate this

    Comment number 345.

    This company sole purpose is to make a profit. Their claim that the company is run by its staff is rubbish (the bankers that set it up own control of the business). The problems in the NHS are not the fault of the NHS but of politicians who cannot run anything effectively. The fact the the Tory Party benefits from donations from Circle who then benefit from Tory policy should worry everyone.

  • Comment number 344.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 343.


    Is the BBC creating its own agenda again.I have just rated a comment positively and once again it has come up as a negative. Is it be because the comment was in favour of the proposed action? Who is behind this left wing manipulation?"

    Other posters rating this comment at the same time!

  • rate this

    Comment number 342.

    This article introduces the term "struggling hospital" without further definition. If I were a patient and had my condition resolved by friendly staff, then in no way would I consider it "struggling". In this way the BBC implicitly asserts that the argument, as to whether such entities should be public services or businesses, has been settled conclusively that they are the latter. Disgraceful.

  • rate this

    Comment number 341.

    The NHS was founded in 1949, before that ordinary people hardly had any medical care, Mrs Thatcher tried to privatize it in the 1980s along with the other nationalised industries, but it was unpopular with the people, so she ran it down cutting funding ect,
    And now the sneaky tories are doing it again.

  • rate this

    Comment number 340.

    Lets face it anything is better than the System we have now.
    The NHS is over-subscribed. Many people abuse the System. Attend any A&E on a Friday/Saturday night. See the drunks who have been fighting for instance.They should have to pay for treatment which is self inflicted.
    There's a shortage of Doctors.Some Hosptials are closing down on some nights.The NHS needs a shake up.

  • rate this

    Comment number 339.

    Running the NHS is not about political ideology. It is about pragmatic management of the delivery of good clinical outcomes and a quality experience for the patient. This is yet another attempt at delivering that to add to the many that are out there now. The principle, free care at point of delivery, remains intact. The delivery varies horribly now. Good luck to this one.

  • rate this

    Comment number 338.

    The Tories will eventually privatise healthcare just as they privatised water in England.

    The Scotland Independence vote has become a slam dunk for a yes vote because we want out of this creeping privatisation.

  • rate this

    Comment number 337.

    as a public health service, the NHS has one of the worst run in terms of successful treatments throughout the western world. We also have one of the highest mortality rates, so cheap it may be, but successful? far from it.
    This is simply untrue, the reverse is the case proved by all accepted creditable international comparators.

    Just because you want something to be sh** doesn't make it so

  • Comment number 336.

    This comment was removed because the moderators found it broke the house rules. Explain.


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