MPs tick off health bosses over hospital funding crisis

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Health bosses in Peterborough have been branded as negligent by MPs for the decision to build a new hospital that is now costing taxpayers £1 million a week to keep afloat.

The 611-bed Peterborough City Hospital was opened in November 2010 at a cost of £289 million with the funding being provided through the government-backed private finance initiative scheme.

But since then the Peterborough and Stamford Hospitals Trust has seen care costs soar at the same time as it started to pay the £40 million a year repayments on the PFI loan and is now facing a deficit of £54 million.

But members of the House of Commons’ Public Accounts Committee heard during a 90 minutes hearing today (MONDAY) that warnings that the cost of the new hospital would be too high had been ignored and that there had been poor regulation and inadequate oversight.

In particular, MPs were angered that a key assumption in approving the trust’s bid for PFI funding in 2007 by the Department of Health was the sale of the former Peterborough District Hospital site, which did not happen and has still to be approved.

The sale would have meant the cost of the new hospital would not have been more than 15 per cent of the trust’s turnover - the benchmark set to secure PFI funding.

Uno O’Brien, permanent secretary for the Department of Health, said: “The hospital is now costing taxpayers about £1 million a week.

MPs were also outraged at the apparent failure of trust bosses, the health regulator Monitor and the Strategic Health Authority to take responsibility for the crisis.

Margaret Hodge MP, chair of the Public Accounts Committee, said: “Every single one of you has failed to do proper due diligence about this and no one has been brought to account.

“There is an issue of negligence here and one that I have not felt with a health report to this committee before.”

MPs were also told that over the last few years, some £14 million has been spent on a range of consultants as well as five chief executives, to try and resolve the crisis.

A further £3 million is to be spent on setting up a new team of consultants, which was announced by Monitor today, and which will go into the hospital next year also in a bid find a solution to the trust’s woes.

Peterborough MP Stewart Jackson, who sits on the committee, said: “This is the worst report of financial incompetence in NHS that we have seen

“It is a nightmare that is continuing with the decision to send in more consultants at huge cost to the public purse.

“This should never happen again - it is a financial disaster.”

Dr David Bennett, chief executive of Monitor, said: “The decision to sign the PFI has led to us to where we are now.”

He said that lessons have been learned but ongoing financial help will be needed for Peterborough for sometime to come.

The trust’s interim chief executive Dr Peter Reading said that negotiations were ongoing to try and renegotiate the PFI repayments, which had gone up from £30 million a year to about £40 million, largely because of inflation.