Health PFI buyout backed
15 August 2012
Regulator Monitor has granted approval in principle for a Foundation Trust to enter into negotiations to buy out its PFI contract using money from a local authority.
Northumbria Healthcare is seeking to buy out its PFI deal through a £120m loan from Northumberland County Council – which itself will borrow the money from the Public Works Loan Board.“Without PFI we would never have been able to develop new facilities at Hexham General Hospital and Wansbeck General Hospital which have served people in Northumberland so well over the last decade,” said trust chief executive Jim Mackey.
“However, given the financial challenges facing the NHS, we must constantly look for new and innovative ways to deliver the best value for money for taxpayers.”
The backing from Monitor will allow the Foundation Trust to move forward in its discussions with its PFI provider to reach a potential agreement on the buyout.
However, any deal would still require the approval of both the Treasury and the Department of Health.
Last week, it was reported that using council borrowing to fund such deals with Foundation Trusts could become more common, with many trusts believed to be viewing the Northumbria plan as a test case.
