Hinchingbrooke Hospital privately-run hospital scheme 'poor' Published duration 18 March 2015

image caption Circle became the first private firm to manage an NHS hospital three years ago

Oversight of the contract to run the first privately-managed NHS hospital was "poor and inadequate", a House of Commons committee's chairwoman said.

MP Margaret Hodge said taxpayers were left "exposed" by the decision to allow Circle to run Hinchingbrooke Hospital in Cambridgeshire.

The Public Accounts Committee leader spoke after Circle pulled out of running the hospital, in January.

The firm said taxpayers still saved £23m through the deal.

In February 2012, Circle took operational control of Hinchingbrooke Health Care NHS Trust, but in January it gave up its contract, citing "unprecedented" increases in A&E attendances and funding cuts.

image caption When the scheme was first announced the Department of Health said "patient care would not be affected"

The Care Quality Commission inspected the trust in September 2014 and gave it an overall rating of "inadequate", although this is disputed by Circle.

The Public Accounts Committee said in a report that in January 2013 the committee "expressed concerns that Circle's bid to run Hinchingbrooke had not been properly risk assessed and was based on overly optimistic... savings projections".

The report said: "The Department of Health responded that the NHS Trust Development Authority (TDA) would monitor progress and take action if the trust was failing to deliver on its plans.

"In the event, Circle was not able to make the trust sustainable and the TDA did not take effective action to protect the taxpayer."

'Intervention package'

Mrs Hodge said: "Despite our warnings about the risks, oversight of the contract by the various parties who had a role was poor and inadequate and no-one has been held accountable for the consequences.

"As we warned in 2013, the taxpayer has been left exposed by the failure of the Hinchingbrooke franchise."

A Circle spokesman said: "We made the savings we planned - and the taxpayer has still saved £23m thanks to the deal with Circle."

A TDA spokesman said: "We will consider the Public Accounts Committee's report and recommendations to take forward the learning from the Hinchingbrooke management franchise to improve our oversight and intervention mechanisms.

"The Trust is currently receiving intensive support for quality improvements through our special measures intervention package."

A Department of Health spokesman said Hinchingbrooke Hospital had severe problems and Circle "had the most comprehensive turnaround plans, which included taking on £5m of risk to the taxpayer".