Northumbria NHS borrows 114 million to buy out PFI contract

Subscribe to our newsletter and get the latest news and business opportunities in your inbox
Northumbria NHS borrows 114 million to buy out PFI contract

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 consortium who run the contract was formed by Lend Lease Infrastructure Fund and Uberior Infrastructure Investments, which is part of Aberdeen Asset Management.

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.

 
List of country news

Country news

  • October 10, 2014

    Ardian and Antin to bid to acquire stake in Eurostar

    Paris-based Antin Infrastructure Partners and Ardian have emerged as potential bidders for the 40% stake in the Channel Tunnel express train operator Eurostar Group Ltd owned by the UK Government. Read more
  • October 10, 2014

    Kelda Organics preferred bidder for Cardiff waste plant

    The City of Cardiff (UK) and the Vale of Glamorgan councils have recommended Kelda Organic Energy as the preferred bidder for Cardiff waste plant PPP project. Read more
  • October 13, 2014

    Interserve, Kajima reach FC for National Centre of excellence

    International support services and construction group Interserve and its joint venture partner Kajima, have achieved financial close for the National Centre of Excellence PPP project for the Scottish National Blood Transfusion Service (SNBTS) near Edinburgh, UK . Read more
  • October 14, 2014

    AIMCo, Allianz, EDF Invest and Hastings Successful Bidders for 100% stake in Porterbrook

    The ultimate owners of Porterbrook Rail Finance Limited, one of the three major rolling stock leasing companies in the UK, entered into an agreement for the sale of their indirect interests in the company to a global investment consortium comprised of Alberta Investment Management Corporation (AIMCo), Allianz Capital Partners (ACP) on behalf of certain insurance companies of the Allianz Group, EDF Invest and Hastings Funds Management. Read more
  • October 14, 2014

    Macquarie Capital hires ex-CVC Capital partner

    Macquarie Capital has appointed Frédéric Devos as its global head of portfolio management. Devos will be based in London and will report to Alex Harvey, global head of principal transactions. Read more

Share this news

Join us

In order to get full access to News section, you must have a full subscription. You can check all the benefits of becoming a member and purchase a subscription on our membership page.