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Hospital to ask for help in paying off ‘gaping jaws of PFI’

PUBLISHED: 13:52 27 January 2018 | UPDATED: 13:52 27 January 2018

Norfolk and Norwich Hospital. Photo: Keiron Tovell

Norfolk and Norwich Hospital. Photo: Keiron Tovell

Archant

The county’s busiest hospital will seek help to pay its massive debt to the firm which built it after it predicted it would end the year tens of millions of pounds in the red.

The hospital was built through a Private Finance Initiative (PFI) which has left it with a huge bill to pay each year. Picture: Archant LibraryThe hospital was built through a Private Finance Initiative (PFI) which has left it with a huge bill to pay each year. Picture: Archant Library

Mark Davies, chief executive of the Norfolk and Norwich University Hospital (NNUH), said he would ask the body which oversees NHS trusts what help was available after he told directors yesterday the hospital was set for a £27.3m deficit for 2017/18.

They had planned to finish the financial year with a £3.6m surplus.

Mr Davies said this was mainly down to operational costs and missing out on expected performance-based funding.

But the £20m paid towards the hospital’s private finance initiative (PFI) debt, through which the NNUH was built, put it further into the red.

The Norfolk and Norwich University Hospital (NNUH). Picture: NNUHThe Norfolk and Norwich University Hospital (NNUH). Picture: NNUH

Mr Davies said: “My personal view is I’m a great supporter of the PFI in that it gets us one of the nicest hospitals I’ve worked in. But it does come at a cost. The debate we want to have with NHS Improvement is if we can get help with the PFI.”

He said there was a debate nationally about whether help was possible, potentially in the form of subsidies. He said elsewhere contracts had been bought out but added: “that’s very expensive”.

Ian Gibson, who was MP at the time the new NNUH was built in 2001, said it was no surprise that the hospital needed help with payments.

He said: “It was predictable in a general sense, as with Carillion and what else. There are people doing very well out of it and the public services don’t get a lot. It was just a ruse to keep it off the public purse. It’s getting worse.”

Mark Davies, the chief executive of the Norfolk & Norwich University Hospital. Photo: NNUHMark Davies, the chief executive of the Norfolk & Norwich University Hospital. Photo: NNUH

Accounts show NNUH still has £194m left to pay consortium Octagon Healthcare for originally building the hospital, but only a tiny amount of that is being paid off each year.

This financial year so far £20m was paid in PFI operating expenses, with a further £13m in interest. Just £2.3m had been paid off the £194m balance in 2017/18 so far, according to hospital accounts.

Clive Lewis, Labour MP for Norwich South, said: “As I’ve said before, PFI is like signing up for the worst credit card on the comparison site. The NHS has more than 100 PFI hospitals with an original cost of £11.5bn but with PFI we’ll end up paying almost £80bn for them.

“Rather than slinging good money after bad into the gaping jaws of PFI, what our NHS really needs more money for is extra nurses, doctors and GPs.”

Ian Gibson, former Labour MP for Norwich North. Photo: Denise BradleyIan Gibson, former Labour MP for Norwich North. Photo: Denise Bradley

While Chloe Smith, Conservative MP for Norwich North, added: “This is concerning and I will seek to work with the hospital to support them in improving their position so that patients get the care they need.”

Alex Stewart, chief executive of watchdog Healthwatch, said: “Whilst there have been some benefits, PFI puts an intolerable strain on hospitals. If the money could be put back into services, it would provide opportunities for more people to be trained, in so doing, ease the burden that is currently facing the hardworking staff and potentially ensure better outcomes for people who could be seen more quickly.”

Octagon will continue to get tens of millions of pounds from the NHS until at least 2037 under the terms of the PFI deal.

The NNUH’s finances were further hit by missing out on £9.4m in Sustainability and Transformation Funding (STF).

Norwich South MP Clive Lewis.
Picture: ANTONY KELLYNorwich South MP Clive Lewis. Picture: ANTONY KELLY

This bonus is given to hospitals when they meet financial targets, but can leave them out of pocket if they do not hit them.

Mr Davies told directors: “Just those two [the PFI cost and loss of STF funding] would get us back to where we were at balance.”

He added the nature of the STF funding was that if targets were hit “you get a big bonus” but if they’re missed “you fall off a cliff edge”.

It was also announced at the meeting that the hospital’s chief finance officer James Norman had resigned.

Chloe Smith, Conservative MP for Norwich North, Pic: Eliza Boo PhotographyChloe Smith, Conservative MP for Norwich North, Pic: Eliza Boo Photography

But Mr Davies said this was unconnected.

•Winter pressures

More than 180 ambulances arrived at the NNUH on some days over Christmas and New Year, chief executive Mark Davies said.

Andrew Wiltshire, Conservative spokesman in Norwich South. Pic: Submitted.Andrew Wiltshire, Conservative spokesman in Norwich South. Pic: Submitted.

The pressure on the region’s hospital was dubbed “beyond anything we’ve seen” by chief operating officer Richard Parker, who revealed they had treated 25pc more patients aged 75-80, many with respiratory problems.

And he said the problem had not been delays in discharging patients, but simply the “influx” they had faced.

“We admitted as many emergency patients on Christmas Day as we would on a normal Monday,” he said.

He said in some areas staff had been moved to help ease the pressure at the front door, and this had caused some delays elsewhere.

Alex Stewart of Healthwatch Norfolk. Photo: Healthwatch NorfolkAlex Stewart of Healthwatch Norfolk. Photo: Healthwatch Norfolk

But praise was heaped on staff, who were described as “trail-blazing” by health secretary Jeremy Hunt when he visited the hospital last week.

Staff at the James Paget University Hospital, in Gorleston, were also heralded by their board members with how they handled one of their busiest periods in recent memory.

The period between Christmas and New Year for the hospital was described by members yesterday as one of the most difficult spells the hospital has experienced in terms of demand, but the staff response was widely praised.

At one point, the hospital’s accident and emergency department reached 115pc capacity, while demand for ambulances also swelled to the point that on one occasion the hospital had 10 ambulances vying for its five unloading bays.

In her report to members, chief executive Christine Allen said: “The trust has seen an extremely challenging and demanding Christmas and New Year period.

“Many staff sacrificed time with family and friends to stay extra hours in the hospital during this period and have gone above and beyond what is required. Our staff have been exceptional.”

New nurses at the James Paget

More than 100 international nurses could soon arrive at the James Paget University Hospital, once pre-employment checks have been completed.

The hospital’s board heard 115 registered nurses had been offered positions, however, their arrivals were dependent on completing a number of procedures to allow them to work in the UK.

The same report also stated the hospital has been forced to rely on locum workers in 15 senior positions - six surgical and nine medical, with 26 senior posts currently unfilled.

A further concern was raised around an ageing nursing staff at the hospital- with 238 members of the current roster reaching potential retirement age in the next year.

Figures released over the last few weeks showed just 10pc of nursing posts advertised in the east of England had been filled between April and June last year.

And more nurses were recorded as leaving the profession than the number joining.

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