25 Nov 2010

First privately owned NHS hospital approved

Health and Social Care Editor

Hinchingbrooke Hospital in Cambridgeshire is the first ever NHS hospital to be placed in the hands of a private company. Social Affairs Correspondent Victoria Macdonald explains the significance.

NHS East of England Strategic Health Authority voted today for Circle, an employee-owned company, to become the preferred partner to run the hospital.

Hinchingbrooke has regularly been described as a “failing” hospital, and has a £40m deficit. Stakeholders hope the private takeover will lead to more positive results at the hospital and trust, Hinchingbrooke Healthcare NHS Trust in Huntingdon.

Social Affairs Correspondent Victoria Macdonald said: “Although private companies have been involved in social care and services, this will be the first time this will have happened to an NHS district hospital.

“It will now pave the way for other NHS hospitals to be taken over.”

Circle has a “John-Lewis-style” model, where all parties from the consultants to the cleaners are co-owners in the business, and the company has a record of turning round NHS services.

Model for other hospitals?

Dr Stephen Dunn, Director of Strategy at NHS East of England, said: “Circle’s John Lewis style partnership model and track record of turning around NHS services make them our preferred partner to transform the first NHS Trust to be franchised.

“We are impressed by the way Circle devolve decision-making to those closest to patients, and empower doctors, nurses and all staff to innovate to deliver better care for their patients…This has to be a model for hospitals that face similar challenges nationally.”

'Failing' hospital Hinchingbrooke becomes first NHS hospital to be owned privately (Getty).

The Labour government approved the bid process last year – indicating it would prefer another NHS organisation to take over. But now private takeovers could become the norm.

Ali Parsa, Circle’s managing partner, said the company’s co-operative model offered a “Big Society” solution for Hinchingbrooke. Circle already employs 1,000 seconded NHS staff and treats more than 130,000 patients a year at day-surgery hospitals in Nottingham and Burton, and runs other surgical clinics in the UK and one private hospital in Bath.

Franchise not takeover

The deal is more of a franchise than a full scale takeover, unions have been assured.

Hinchingbrooke will remain an independent NHS trust, run by franchise holder Circle, and the trust will retain the right to approve any land or asset sales, care for patients will remain free, and Circle only has the contract for seven to 10 years.

In return, their responsibility will be to improve the hospital’s financial position while maintaining levels of care. Circle will take over the delivery of hospital services and the running of the NHS trust in June 2011.


While some people in Cambridgeshire who spoke to Channel 4 News felt that the investment was positive, Karen Jennings, head of health at Unison, the country’s largest health workers’ union, was concerned about the quality of care.

However, Mr Parsa stressed Circle’s strong patient satisfaction record at its other facilities, and promised to try not to cut any hospital services as Circle took over the running of the hospital.

Watch the debate below between Circle’s Mr Parsa, and Unison’s Ms Jennings.