4 December 2012 Last updated at 13:18 ET

Hinchingbrooke: Ali Parsa steps down as chief executive

Ali Parsa will remain on the board of Circle

The chief executive of the firm running Cambridgeshire's Hinchingbrooke Hospital, the first in the NHS managed by a private company, has stepped down.

Circle Holdings plc took over the hospital in February this year in a £1bn, 10-year deal.

Chief executive Ali Parsa will be replaced by Steve Melton, who will serve on an interim basis.

Mr Parsa will remain on the board of Circle as founder and a non-executive director, the company said.

Under the deal Circle assumed the financial risks of making the hospital more efficient and paying off its £40m of debts.

'Entrepreneurial vision'

The company said the main reason for Mr Parsa to step down was to give him more time to fulfil "his passion for social entrepreneurship".

"Ali has been instrumental in forming the entrepreneurial vision and early development of the company," Michael Kirkwood, chairman of Circle Holdings, said in a statement.

"He has been a pioneer developing a business model which empowers doctors, nurses and healthcare professionals to redefine UK healthcare delivery for the benefit of their patients.

"The board and Ali have agreed that now is the appropriate time for him to assume a non-executive role."

Mr Parsa said: "I wish to step down from my executive leadership role so that I have the time I need for other projects that now require some of my focus."

Tracey Lambert, Unison head of health for the eastern region, said: "Bringing in a private company like Circle to run the hospital has always been a dangerous experiment.

"Ali Parsa made a lot of claims about the unprecedented level of savings he could make at Hinchingbrooke and now he is walking away before he has completed his job. That is because not only are his claims exaggerated, but they are made at the expense of staff and patients.

"There is still a very big question mark over the long-term financial viability of Circle and whoever is in charge of the hospital bringing in a private company to run an NHS hospital is not right for the health service."

Mr Melton, who takes over, is currently Circle's head of mobilisation. He joined the company in February 2008.

Circle said it would recruit a permanent successor to Mr Ali, with candidates from both inside and outside the company.