Bart's hospital to be saved

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Britain's oldest hospital, St Bartholomew's, will be saved, Labour MPs said last night after receiving assurances from senior Cabinet sources that a review would rescue the hospital from closure.

Senior Labour backbenchers said that they had been telephoned by the Cabinet sources to assure them that St Bart's, the the City of London hospital, will not close.

Frank Dobson, the Secretary of State for Health, has ordered a moratorium on the Tories' closure plan for London hospitals pending a review which is to be carried out by Alan Milburn, the Minister of State for Health.

Ministers are expected to deny that any decisions have been taken, but Whitehall sources confirmed that the review was expected to give priority to the study of the future of St Bart's. It is likely to focus on ways of ensuring that the world-famous hospital remains on the site.

The big issue that remains to be resolved is whether the hospital's accident and emergency unit can be reopened. The department was closed more than two years ago, and featured largely in the high-profile campaign to save Bart's which included stage and screen stars. Whitehall sources said it was unlikely that the unit could be reopened. One option could be to raise private finance for an accident and emergency department, as part of the private finance initiative.

The MPs have been told that saving Bart's is seen by ministers as a powerful symbol to demonstrate the Government's commitment to the National Health Service.

There has been a St Bartholomew's hospital on the same site in Smithfield for almost 870 years. It was founded in 1125 to care for the sick and poor of the City of London but was adopted by the rich money makers in the City as their local hospital.

Saving it could also save money on the capital programme. The previous government planned to close the hospital by 2001 but the Royal Hospitals NHS Trust, which includes Bart's, announced a pounds 300m scheme to build a new 1,100-bed hospital in Whitechapel, east London, to replace Bart's and three other hospitals.

The hospital won support last night from an unusual quarter. John Redwood, who had challenged John Major for the Conservative Party leadership, said: "Labour should review their closure programme. They are threatening to close far too many hospitals." He said closure would break faith with the party's commitments on the health service.

There were also clear signals yesterday by Mr Dobson that he was going "softly softly" on Labour's commitment to replace GP fundholders with locality commissioning in which GPs have to co-operate with other family doctors.

Mr Dobson announced that he was deferring all further entrants to the eighth wave of GP fundholders, but he said plans for creating local commissioning groups of fundholders would be tested in a series of pilots before being extended.

The Queen's Speech omitted a Bill to force fundholders to join commissioning groups, and while it is being held in reserve, Mr Dobson has privately told GPs' leaders he wants to "go with the grain" of the profession.

Mr Milburn had met with the National Association of Fundholding Practices, of whom Mr Dobson said: "They appear to be satisfied with what we are proposing."