Northumbria NHS borrows 114 million to buy out PFI contract
- Aberdeen Asset Management
- Uberior Infrastructure Investments
- Lend Lease PFI/PPP Infrastructure Fund
Related M&A Transactions
Last Wednesday, Northumbria Healthcare Foundation Trust (UK) borrowed £114 million from the local council to pay off private contractors who built and ran Hexham General Hospital through a PFI contract.
We had already announced the deal in June 2014.
The Financial Times reports that Phil Lobb, a partner at Deloitte who advised Northumbria on its PFI buyback, said he had been approached to conduct about 10 further feasibility studies by hospital trusts around the country keen to shift to cheaper public debt.
However, he added there were many obstacles to overcome before a buyback could be completed. The Northumbria case benefited from a "relatively unique" situation because of the council's relationship with the hospital.
The Northumbria trust is borrowing the money from Northumberland county council, which in turn will borrow from the Treasury's Public Works Loan Board. That means that the debt will end up on the public accounts.
Hexham hospital cost £54 million to build. The Trust has calculated savings of around £3.5million per annum.
Hexham General Hospital was opened in summer 2003 and treats thousands of patients every single year. It is a modern hospital providing a full range of diagnostic services and 24-hour emergency care.
The hospital has four wards consisting of an oncology day unit, a surgical ward for patients who have had general, orthopaedic and gynaecological surgery, a stroke rehabilitation and care of the elderly ward and a general medicine ward. Its wards are largely single, en-suite rooms. The hospital also has a midwifery-led maternity unit with birthing pool. Two GP practices are based within the hospital.