Northumbria Healthcare NHS Foundation Trust has been given approval from the Government and Monitor, the independent regulator of NHS Foundation Trusts, to terminate its private finance initiative (PFI) contract which enabled Hexham General Hospital (Hexham, UK) to be built in 2003.

The termination is being made possible by a loan from Northumberland County Council. The Trust has calculated savings of around £3.5million per annum, which will be realised by terminating its PFI contract early for Hexham General Hospital and by working with Northumberland County Council to agree terms for a new loan.

The hospital was built in three stages. The first was opened by Mr Blair in 2004 with the contractor, Catalyst, being paid to run it for 32 years. Catalyst includes Bovis Lend Lease and Bank of Scotland.

Hexham hospital cost £54 million to build.

Jim Mackey, chief executive of Northumbria Healthcare NHS Foundation Trust, stated:

Without PFI, we would never have been able to build the fantastic facility we have today at Hexham General Hospital which has served people in Northumberland so well over the last decade.  However, given the financial challenges facing the NHS we must constantly look for new and innovative ways to deliver good value.

Dave Ledger, deputy leader of Northumberland County Council, stated:

 The loan we have agreed with Northumbria Healthcare NHS Foundation Trust represents good value for the residents of Northumberland as it will reduce overall borrowing costs and release resources to support frontline health and social care services across the county.

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.