FINANCE: A hospital trust has sold half of its beds to a Dutch company for half a million pounds and is leasing them back, HSJ has discovered.

St George’s Healthcare Trust’s accounts reveal it had made £509,000 selling the 594 beds to De Lage Landen, a Dutch specialist leasing company.

The lease rental will cost £79,000 for 2011-12 and the trust said they would be “leased back over varying terms depending on their age at the date of the sale from five years to 13 years.”

The move was overseen by specialist lease advisors Leaseguard.

De Lage Landen is a subsidiary of Rabobank, a Dutch bank which offers general financial services in the Netherlands and said internationally it is focused “primarily on the food and agribusiness” sector.

Rabobank is thought to be one of the world’s 25 largest financial institutions.

The move, which sees the organisation effectively borrowing against its assets, comes as it missed its end of year financial target by £5.4m.

A report from NHS London said this was due to “cost improvement programme slippage and challenges to income from acute commissioners”.

St George’s also got a £4m bailout from NHS London’s challenged trust board last year and £8m the year before.

The £556m-turnover trust has set a cost improvement plan target of 7.5 per cent this year. It achieved nearly all of its 3.6 per cent target from last year but nearly a third of the £40m target was made of non-recurrent savings.

St George’s chief executive and chairman announced they were stepping down after the board voted in May to delay the trust’s application for foundation trust status.

In 2003 the organisation sold £2.5m of cardiac catheter lab equipment and leased it back over seven years. When the contract expired in September 2010 the trust had paid £2.8m including VAT and the lease was renewed at £218,000 a year.

The Audit Commission said the receipt with the beds deal should be spread over the length of the lease and not recorded as lump sum income for 2010-11.

A spokesman for the commission said: “Sale and leaseback transactions would need to demonstrate good value for money, and our understanding is that they are generally discouraged by the DH. “ 

A spokesman for the Department of Health said: “Leasing arrangements, especially for equipment, are common in the NHS. But any contracts must meet the twin criteria of delivering value for money and transferring a significant amount of risk to the private sector supplier.

“For this reason the great majority of such contracts are operating leases, although it possible other local models such as sale and leaseback can be made to work if they meet the key criteria.”