Council bosses in Northumberland are being asked to lend £25m toward the building of a new hospital in a border town.
Northumberland County Council’s policy board is tomorrow being asked to approve the loan to Northumbria Healthcare NHS Foundation Trust, which is seeking to redevelop Berwick Infirmary.
The move comes on the back of a £100m loan which the council agreed to give the trust last year relating to work on two other Northumberland hospitals.
The healthcare trust last year agreed to redevelop the infirmary on its current site after proposals to build on land owned by Berwick Academy were abandoned.
A report to the policy board proposes that a £25m loan to the trust towards the cost of the project be agreed, provided that the authority’s lead executive director for corporate resources “obtains sufficient security from the trust to enable the loan to be repaid.”
The meeting will be told that the proposal has been subject to the council’s risk appraisal process and that the risks of proceeding were deemed to be acceptable. The report sets out how the loan would be repaid over a period of 25 years with interest to be paid.
It states: “A proposal has been developed which would enable the council to use its ability to borrow under the Prudential Code to benefit both employment and healthcare service provision within Northumberland.
“The council has been involved in discussions with Northumbria Healthcare NHS Foundation Trust regarding the provision of financial support in the form of a loan to enable the trust to redevelop Berwick Infirmary and improve local healthcare facilities and local services in the Berwick area.
“The provision of financial support would benefit the residents of Northumberland; in particular those in the Berwick area, by enabling the foundation trust to improve the current site at Berwick and provide a purpose-built healthcare facility which responds to patients’ needs.”
County councillor Dougie Watkin last night applauded the proposed loan, describing it a “very good deal” for taxpayers of Northumberland given that the money is being spent on “something the community needs” and that the council will be able to spend the interest it earns.
He also spoke of the importance of Berwick having its own hospital in the event of emergencies, given that the nearest major health facilities are 50 miles away.
The move comes on the back of the council agreeing a loan of £100m to the trust in December, to allow the trust to buy itself out of the remainder of private finance initiative (PFI) contracts for work on Hexham Hospital and the second phase of Ashington’s Wansbeck General.
The council agreed that 25-year loan in principle in December and a report to tomorrow’s meeting outlines how the authority has since “granted a significant loan” to the trust.
Meanwhile, the trust and council are holding a joint public board meeting in Berwick at 12.30pm tomorrow to discuss the next steps for the new hospital.
The meeting takes place at Berwick Rangers Football Club.
Members of the public are then invited to an information event at the same venue from 1.30pm to 3pm where they can learn about the services provided in Berwick Infirmary and the expected timelines for the new hospital build.
The trust said it would not be commenting before the meeting.