A mental health trust has become the first healthcare organisation to buy back a PFI hospital.
The Tees, Esk and Wear Valleys NHS Foundation Trust exercised a clause in its contract for the West Park Hospital, in a bid to save £14m. It bought back the hospital using a £41m cash balance, which it had built up by the end of last year.
The trust’s director of finance, Colin Martin, said the authority took advantage of the clause which allowed it to end it, 23 years early, and paid £18m to get out of the contract. ‘In simple terms, it’s like paying off the mortgage early,’ said Mr Martin. ‘At the time, in 2003, the PFI arrangement was the right decision, and it was the only way to acquire the hospital.
‘We still have two other PFI hospitals – Roseberry Park in Middlesbrough and Lanchester Road Hospital in Durham – which are newer, and were negotiated more recently, using different funding models and, as such, have no plans to change these arrangements, as they give good value for money,’ he added.
