Failing hospital to be run by private company

A troubled NHS trust whose chief executive was sacked over allegations that he fiddled waiting list figures will become the first in the country to be run by a private-sector company.

A troubled NHS trust whose chief executive was sacked over allegations that he fiddled waiting list figures will become the first in the country to be run by a private-sector company.

Two health specialists – Secta, which has a £9m stake in a hospital in Coventry, and the Canadian company Interhealth – have been shortlisted to run Good Hope Hospital in Sutton Coldfield, West Midlands. The winning company, to be announced next month, will install a chief executive to replace Jeff Chandra, who was sacked after a disciplinary hearing found him guilty of misconduct last November. Mr Chandra appealed and is awaiting a hearing before an employment tribunal.

The move is certain to fuel anxiety among Labour MPs about the piecemeal privatisation of the NHS. More than 60 rebels voted against the Government over its plans to create foundation hospitals on Wednesday. David Hinchliffe, Labour chairman of the Commons Health Select Committee, said: "I have very deep anxieties about bringing in management teams from the private sector. There is a fundamental difference between a public service rooted in the philosophy of collectivism and the dog-eat-dog approach within private industry.

"I have not seen a scrap of evidence that the management of an NHS hospital by a private company is likely to offer a better outcome than by managers from elsewhere in the NHS."

Unions reacted with alarm yesterday. Ian McIvett of the public service union Unison said: "We are not talking about a little bit of stuff being contracted out. We are talking about the private sector running a major hospital in Britain's second city. That is an extremely worrying move."

Management of the 400-bed hospital was put out to franchise after it dropped from a three-star rating to no stars in the most recent NHS performance tables.

The trust was found to have more patients waiting over 18 months and 15 months, and more cancelled operations than it had reported. The Department of Health said it "highlighted a serious corporate failure to manage the waiting lists correctly".

Alan Milburn, the Health Secretary, announced last December a list of eight private-sector companies that would be invited to compete for contracts to manage NHS trusts that persistently failed to reach government targets. The scheme is based on a strategy used in failing schools.

The eight companies, which include three foreign firms, are on a "register of experts" alongside 62 of the best- performing NHS trusts ranked with three stars in the performance tables published last July. Only the eight private- sector companies chose to be on the register because they had an interest in taking over failing trusts. The 62 NHS trusts were placed there automatically on acquiring three stars.

A spokeswoman for Birmingham Strategic Health Authority said yesterday that the management board of the hospital would not be replaced. But she added that the new chief executive was free to make his or her own appointments. "There is flexibility to bring in other staff. The new chief executive will outline what changes in support may be needed to turn the trust around," she said.

A spokeswoman for the Department of Health said: "This is not privatisation. NHS trust franchises are for management services, and do not involve a transfer of ownership of the trust.

"Care will continue to be free at the point of delivery and the trust will remain firmly within the NHS."