News / Hinchingbrooke franchise ‘will break even’

The private company given a franchise to run Hinching-brooke Health Care NHS Trust has said it is confident that the trust will break even next year.

A National Audit Office report on the first franchise, nine months after Circle took on the trust’s management, said the company must generate savings at an ‘unprecedented level’. While the trust’s cancer and A&E performance had improved since February, when the company formally took over its management, by September the trust had a £4.1m in-year deficit – £2.2m more than planned.

At the end of March, the trust’s cumulative debt stood at £38m on an annual income of £107m. Circle plans to achieve savings of £311m over the 10 years of the franchise, with most set for later years. The company will receive payments only if the trust records a surplus in-year and must cover deficits up to £5m. Its liability is capped at £7m.

‘While Circle has made early improvements in some clinical areas, the company will have to generate savings at an unprecedented level,’ said NAO head Amyas Morse. ‘The final judgement on the value for money of the franchise will depend on how successfully Circle makes the projected savings and repays the cumulative deficit, while maintaining clinical quality.’

Circle chief executive Ali Parsa was confident about the trust’s future. ‘Having overcome the quality issues facing the hospital, we have little doubt that our partners in Hinchingbrooke will overcome the financial challenges too, and next year break even for the first time in years. Not bad for a hospital that faced closure and was written off as a “clinical and financial basket-case”.’