Second NHS hospital in financial difficulty is put out to tender

BMJ 2013; 347 doi: (Published 05 September 2013) Cite this as: BMJ 2013;347:f5449
  1. Gareth Iacobucci
  1. 1BMJ

A second NHS hospital trust in England could be franchised out to a private company after the government approved plans for an open market tender to source a partner for the George Eliot Hospital in Warwickshire.

Following the analysis of a business case, the NHS Trust Development Authority concluded that an open procurement process should commence, which will lead to the trust being merged or acquired by another NHS trust, or “a franchise that may be a non-NHS organisation.”

If the bid is won by a private company, the trust would be following in the footsteps of Hinchingbrooke Health Care Trust in Cambridgeshire, which had its management taken over by Circle Health in February 2012.1

Labour said that the latest move, backed by the Department of Health, amounted to “privatisation driven from the top.”

The trust, which provides services for around 290 000 patients, has been seeking a partnership since 2011 when it was agreed that it was unable to achieve foundation trust status in its current form and faced “significant challenges in delivering services sustainably.”2

It was one of 11 trusts placed in special measures by the health secretary, Jeremy Hunt, in July, following a review by NHS medical director Bruce Keogh, which found that it was an outlier for mortality.3

The development authority said that the trust had required external financial support to breakeven for the last two years, and had a financial gap for this year.

In a board paper outlining its decision, the authority concluded, “An open procurement should take place in order to test a wide range of innovative proposals from both NHS and independent sector providers.”4

It added, “Further review and testing of the procurement approach determined that a ‘dual-track’ process for the management of the trust either by merger and acquisition by another NHS organisation, or by a franchise that may be with an NHS or non-NHS organisation, would best meet the project objectives.”

The authority said it expected that the new partnership could begin service on 1 April 2015.

The shadow health secretary, Andy Burnham, criticised the decision. “Everywhere you look, chunks of the NHS are being broken up and handed to the private sector. With this announcement, it is now proceeding at a pace and scale never seen before,” he said.

“Ministers have spent all year running down the NHS and their real intent is becoming increasing clear—preparing the ground for more privatisation.”


Cite this as: BMJ 2013;347:f5449


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