Council planning to loan hospital £15m for new pathology centre

A NEW partnership could see Royal Bournemouth Hospital loaned almost £15m by BCP Council for a new pathology centre.

Cabinet members have been asked to give their backing to the arrangement which would see the council earn interest of £4.2m over 15 years, writes Josh Wright of the Local Democracy Reporting Service.

The proposed move follows precedents set in Blackpool and Northumberland where funding agreements have been made between local authorities and health trusts.

NHS providers in Dorset say the new centralised unit would deliver long-term savings and cost efficiencies while improving care through faster diagnoses.

It would either be built on the existing Royal Bournemouth Hospital site or on land at Wessex Fields bought from the council.

Ahead of Wednesday’s cabinet meeting, a report recommending the council loan £14.9m to the trust has been published.

“This application is different from a normal business investment in terms of the nature of the applicant as a strategic public sector partner,” it said.

“However, from the council’s perspective, it is important to emphasise that the trust will be required to make £993,000 annual capital repayments and the associated interest payment regardless of its financial position, operational performance or success of the pathology service.

“This arrangement recognises that there is a limited amount of capital funding available in the NHS compared to the size of its revenue budget.”

It said the council would earn £4.2m in interest over the 15-year repayment period, £1.8m more than interest it would have expected to receive if the money was kept.

Funding provided by the council would be used to cover the cost of the building for the new laboratory, which the NHS said would lead to faster diagnoses while delivering “more efficient ways of working”.

Should the cabinet give its backing to the report next week, it would allow council legal officers to begin putting together an agreement for the loan.

In June, the NHS trust submitted a planning application for the redevelopment of the Bournemouth hospital as part of ongoing work to merge it with Poole Hospital.