Private NHS hospital is 'first of many'

TWO profit-making firms, including Westminster Health Care, the giant nursing homes group, are bidding to create Britain's first private NHS hospital, which is due to open next year.

After months of negotiations, Grampian health authority has named the three groups competing to build, equip and staff a new public hospital in Stonehaven, near Aberdeen. Westminster Health Care and Yorkshire-based Lister BestCare, which run private health centres and provide fee-paying clinical services across Britain, are bidding for the pounds 7m contract against Grampian Healthcare, the local NHS provider.

Grampian health authority is the first in Britain to use the Government's Private Finance Initiative to seek private sector bids for an entire NHS hospital - and news that two profit-making firms are on the shortlist has provoked a political storm. The British Medical Association and the health union, Unison, which see the Stonehaven project as the first step towards NHS privatisation, have launched a campaign to force the authority to abandon the "sell-off". Labour has pledged to return the hospital to full NHS control if Westminster or Lister succeeds.

All three consortia say they are confident they will win the contract. They have submitted bids to build the new hospital and provide all clinical services, including casualty, for more than 30,000 people in the Stonehaven area. Health authority managers, who back the radical market-testing scheme, will examine the offers before announcing the winner in May. With strong Scottish Office support for the private sector, many observers predict they will opt for one of the two English-based companies.

The creation of the hospital, which will replace two ageing "cottage" health centres, is the Government's most radical NHS Private Finance Initiative project. While companies have agreed to build hospitals or provide some medical services in England and Wales, Scottish Office ministers want private firms to take full control in Stonehaven.

From next year, every patient in the Kincardineshire town could be treated by private sector staff, although care will continue to be free with local GPs co-ordinating in-house services. Ministers want Westminster or Lister to win the contract and build the hospital before the general election so that they can use it to bolster the case for private-public sector partnerships.

Lord James Douglas-Hamilton, the Scottish health minister, defended the project last week. If the private sector built and ran the new hospital, more public money would be available for other NHS projects. "This is a good deal for the people of Stonehaven and for the taxpayer," he said.

But the BMA and opposition parties say the scheme is "proof positive" that the Tories plan to privatise the NHS. Dr Sandy Macara, chairman of the BMA, argues that "the very essence" of the health service is at stake. "Never before has an entire NHS hospital been offered to private sector firms," he said. "If this goes ahead, it will set a precedent which will lead to the end of the centrally-planned and resourced health service and the beginning of a fragmented, privatised and ultimately more expensive service."

Labour's Scottish health spokesman, John McAllion, confirmed that Labour would ensure Grampian Healthcare NHS Trust took over the hospital if it won the election. He said: "It is wrong for a private company to make profits out of treating NHS patients. If the internal market was the first step in selling off the NHS, Stonehaven marks the beginning of full- scale privatisation that we have feared all along. It must be defeated."