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NHS England paid £42m to buy independent treatment centre from private provider

NHS England has paid out nearly £42m to buy an independent sector treatment centre from a private company, after the contract to run the centre came to an end.

According to the latest board papers from NHS England, the NHS was forced to hand over £41.4m last month to private provider Circle at the end of its original contract in order to buy back both the building and specialist equipment at the Nottingham independent sector treatment centre.

However, in July Circle was awarded a new five year £200m contract to continue treating NHS patients at the ISTC and NHS England is preparing to lease the building back to the company.

The guarantees to buy back buildings and other expensive facilities such as dialysis units were in addition to revenue guarantees that meant the contractors were paid regardless of the number of patients seen.

When the contracts were originally awarded to ISTC private providers in 2008 14 of the 27 wave one schemes included ‘residual value guarantees’ which obliged the NHS to buy back the buildings used by the schemes at the end of the five-year contracts, to minimise the risk to the private investors.

NHS England’s September board papers confirm that the ‘payment was approved…equating to the residual value of the property, in line with previously agreed contractual terms.’

It adds: ‘It was agreed to issue a letter to the preferred bidder provider of future services to allow their continued occupation of the site to ensure
uninterrupted provision of patient care whilst work is undertaken to establish a new sublease.’

Pulse understands that Circle are now currently negotiating fees for leasing the building and equipment from the NHS.

A spokesman for Circle Partnership said: ‘As agreed in the original contract in 2008, the property has now been taken on by NHS England, and we will continue to lease the premises to deliver our new model of integrated care allowing more patients to be treated at home and in the community.’