The first private company to run an NHS hospital, nuclear chiefs, the BBC and officials overseeing defence procurement reforms will come under fire from corporate Britain’s most feared committee of MPs before the election.
Steve Melton, the chief executive of Circle Holdings, is set to be grilled by MPs on the Public Accounts Committee (PAC) today after the Aim-listed group withdrew from its contract to run Hinchingbrooke Hospital in Cambridgeshire last month.
Asked to turn around the debt-ridden hospital in 2011, Circle decided to walk away after it had put in £5m of its own money to cover losses. Under the terms of the 10-year agreement, that was the point at which Circle could terminate the deal; concerns were raised in September when it emerged that the group was only £150,000 shy of this threshold after just two and a half years in charge.
The PAC’s chairwoman, Margaret Hodge, said last night that she would remind Mr Melton that he had been “incredibly confident Circle could deliver” when the PAC warned him at an earlier hearing that the deal was “unsustainable”.
A spokesman for Circle insisted that it had met key targets during its time in charge.
The grilling kicks off at least six weeks of what are likely to be tense hearings before Parliament breaks for the election. Since taking over in 2010, Ms Hodge has forged a reputation for her grillings of major companies, famously telling one of Google’s bosses, Matt Brittin, that the US internet giant “do evil” during the committee’s inquiry into corporate tax avoidance in 2013.
The last significant hearing is likely to be on Sellafield in early March.
Last month, the Government stripped Nuclear Management Partners (NMP) – a private-sector consortium comprising the US giant URS, France’s Areva and the FTSE 250 group Amec – of its £9bn contract to clean up waste at the Sellafield nuclear facility in Cumbria. Despite being over-budget and behind schedule on projects, NMP had had its contract extended at the end of 2013.
At the end of this month, the BBC’s director general, Tony Hall, will be questioned over the broadcaster’s property estate. Ms Hodge believes it is “staggering” that the running cost of Broadcasting House is 50 per cent higher than in similar buildings in the same part of London.
In early March, Ministry of Defence officials will be quizzed over plans to reform defence kit acquisition. The Coalition has been trying to sharpen up the way it negotiates contracts, but this has been controversial as it involves using other companies to help oversee those deals that are so crucial to national security.Reuse content