Secret Deal Fears on Hospital Site

Peterborough District Hospital07:07 Thursday 2nd June 2011
Peterborough Breakfast Show
BBC Radio Cambridgeshire

SUZIE ROBERTS: The Trust who runs Peterborough’s hospital has announced plans to cut around 300 jobs. The news came at a budget meeting yesterday, as Peterborough and Stamford Hospital Trust look to address a possible £38 million overspend this year. Well speaking on yesterday’s Drivetime programme, John Randall, Medical Director at Peterborough City Hospital explained how the Trust had come into difficulties. (TAPE)
JOHN RANDALL: It’s come about for a variety of reasons really. Our income has remained relatively static, if not gone down. Our costs have actually increased, and we’ve increased the numbers of staff over the last two or three years. We’re also having some services commissioned less from our purchasers, and also the additional costs of moving in to our new PFI hospital. (LIVE)
SUZIE ROBERTS: So now the The Trust could be forced to arrange a loan or extension of its overdraft to help address the issue. That could then be paid off using funds raised by the sale of the old PDH site. Well here to explain the situation and give us his thoughts is the MP for Peterborough, Stewart Jackson. Morning to you Stewart. This is a very tricky situation, isn’t it. We’ll get to the proposed solution in a minute, but first of all, your reaction to the news of job losses, 300 job losses.
STEWART JACKSON: Well I think that this is the most serious situation financially for the Trust in the last ten years. To be going from a situation where you’re moving into a modern state-of-the-art hospital in November, and then you’re thinking of deleting 300 posts, 300 very dedicated hard-working long standing staff in June, six months later, is a very poor situation. And it does reflect I think a lack of strategic management planning, either with the move to the City Hospital, or the negotiations with the Primary Care Trust, and the amount paid for services. Something has gone very badly wrong. And unfortunately my constituents who are staff there are having to ostensibly pick up the pieces of that mismanagement.
SUZIE ROBERTS: Do you think that looking at it, that the Hospital opened quite frankly too early?
STEWART JACKSON: Well there is an argument for saying that the model of acute district hospitals is being phased out. they’re a thing of the past. Because so much more medical care is being delivered in the community, which is the position really of the PCT. They’ve got to look at much more primary care. So there is always going to be a stress and strain between an acute hospital and its local primary care trust. I think the problem is that the Hospital didn’t foresee that there would be extra costs with the move, and that they didn’t see into the future that the PCT wouldn’t be putting all their services at Peterborough City Hospital, that they would be using Hinchinbrookes, they would be using Leicester Royal Infirmary, Adenbrookes. And that has meant that the income streams that they expected just haven’t materialised. And also you had things like the winter vomiting bug, which no-one in fairness could have foreseen.
SUZIE ROBERTS: We mentioned there will be a debt to pay off, £38 million potentially. The obvious thing is, obviously, is that the Trust could sell off the site where PDH, the old hospital is still standing there. You’ve raised concerns about this before. Explain what your issue with that is.
STEWART JACKSON: Well my issue is that the Hospital have known that they will have released the land on the former PDH site a year ago. They’ve spent huge amounts of money on legal and other advice from property agents. They’ve worked with the City Council over the last year. That’s been a capital asset which they could have by now have had demolished, and outline planning permission. They’ve failed to do so. They have unfortunately behind closed doors entered into negotiations and discussions with just one developer. And the problem is that it’s all been done without transparency, and without openness. And it’s not, it seems, going to go out on the open market, which means that it’s going to be a lower price. It’s also possibly judicially reviewable, if they don’t put it out to open market, because I think it contravenes the National Health Service Act of 2006. It seems crazy when you’ve got a £38 million deficit, that you’re not trying to maximise both the aesthetic value, the quality of the site, in terms of the housing and the retail that would go there, but also the capital receipt. This is a one-off public asset, which can’t be sold again. And it seems to be being sold at lower than market price to pay an overdraft, which is crazy.
SUZIE ROBERTS: But Stewart beggars can’t be choosers. We’re desperate for the money. As you’ve said yourself your own constituents are potentially going to suffer because of cutbacks.
STEWART JACKSON: That is true, but the management of the Board and the Governors have had on the table these proposals for a year. The Supplementary Planning Document that was written by the City Council was written a year ago. They’ve done nothing to move it forward. We’re no nearer to going to the open market. And now they’re forced into the position, having had a presentation by one monopoly developer, of having to go for a fire sale very quickly. And that is a very unsatisfactory position. And that’s why I will probably be writing to Monitor, the regulator, to draw their attention to the circumstances around this sale.
SUZIE ROBERTS: I mean the thing is that year has gone now. It’s too late to do anything about that now. We need to act quickly surely now.
STEWART JACKSON: Well I think it’s quite possible for it still to go to the open market. I think the £16 million figure, I’m not an expert, but I’ve talked to others, that is a prime site. That could be one of the best urban development sites in the whole of the UK. It’s a fantastic site. I think if it went to the open market the taxpayer and the health care sector could get a much better deal.
SUZIE ROBERTS: And even if it took longer to sell, therefore meaning other things would have to go like jobs and that sort of thing, in order to claw back this money, would you be prepared for that, if it meant getting a higher price for PDH?
STEWART JACKSON: Well I think if it secured the long term financial viability of the Hospital, where we didn’t have to make people redundant who’ve been at the Hospital and given loyal service for many years, I think it’s a price worth paying, even if it’s only a few months. If we go to a fire sale now, we can never get this capital asset back. And that’s a point I’ve been making to the Chairman and Chief Executive of the Trust for a number of months.