The running of an NHS hospital is to be franchised out, potentially to a private company, in the first arrangement of its kind.

Department of Health and Treasury backing for the plan for Hinchingbrooke Health Care trust was announced yesterday.

NHS East of England is now inviting foundation trusts and the independent sector to bid for the franchise.

Staff will remain employed by the NHS and assets will remain owned by the NHS. A condition of the franchise will be that Hinchingbrooke Hospital remains a district general hospital including maternity and accident and emergency services.

NHS East of England said the arrangement would ensure local people’s wishes for the hospital would be met, “and that the money owed to the rest of the NHS by the hospital can be returned and invested for the benefit of local people”. The trust has a historic debt of nearly £40m.

The strategic health authority’s director of strategy Stephen Dunn said: “This will come as a great relief to those concerned about the future of the hospital as it begins to end months of uncertainty for Hinchingbrooke.”

Trust chief executive Mark Millar said: “Throughout the process we will be looking for opportunities for staff and services which enhance high quality local services for local people.”

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