Labour chiefs dismiss rumours South Tyneside District Hospital site has been earmarked for housing

The borough’s Labour Group describes as “simply not true, misleading and without foundation” what it says are social media-inflamed claims about the hospital’s future.

South Tyneside Council has held an informal discussion with local health bosses about a money-borrowing deal to fund possible hospital services changes.

This has involved the possibility of the council borrowing on behalf of South Tyneside and Sunderland NHS Foundation Trust for “visible improvements” at the South Shields hospital.

But it denied any request had been made by the trust for the council to borrow from the Public Works Loan Board, which facilitates investment in the public sector by providing low cost loans.

A spokesman for the Labour Group said: “The council has received no request from the Foundation Trust to apply for a loan from the Public Works Loan Board although there has been an informal discussion as to whether the council could use its borrowing powers to loan funds for visible improvements to their site at Harton Lane.

“Any such request - if received – would not be to facilitate the closure of South Tyneside Hospital, but in fact quite the opposite.

“It would enable the demolition of out of date Victorian buildings and investment in new modern buildings including the provision of a new state of the art diagnostic centre and improved car parking – the loan would be used exclusively for the South Tyneside hospital site.

“The loan would be at no cost to the council or the council tax payers of South Tyneside, it is re-paid in full and with interest by the Foundation Trust.”

He added: “The borough council, not any individual elected member or officer, will consider any such request received from the Foundation Trust and determine whether the specifics of the loan are in the interests of the people of the borough and whether the loan will ultimately lead to improved health provision at the South Tyneside site.

“Rumours that the site has been earmarked as a large scale housing site are simply not true, misleading and without foundation.

“The Foundation Trust wants to invest heavily in the long term future of their site at Harton Lane.

“Clearly as the Clinical Commissioning Group (CCG) – which is a separate body to the trust – continues its consultation on the reconfiguration of services between Sunderland and South Tyneside, it is important the Foundation Trust can demonstrate it will be able to deliver safe services from modern, state of the art buildings on South Tyneside, this loan – if applied for and if approved by South Tyneside Council – would help facilitate that.”

The Labour Group statement comes less than a fortnight after the trust confirmed it had held informal discussions with local authority partners around funding for changes to hospital services in South Tyneside and Sunderland.

It said this could see Sunderland City Council and South Tyneside Council using their powers to borrow funds from the Treasury more cheaply than could the trust from banks.

The changes would form Phase Two of the trust’s Path To Excellence programme, which has seen some health services moved from South Tyneside to Sunderland.

South Tyneside Council Leader Iain Malcolm has described as ‘win win’ the potential the council has to borrow from the Treasury at a cheaper rate than from the banks, which is then loaned to the trust.

Speaking earlier in July, Ken Bremner, chief executive of South Tyneside and Sunderland NHS Foundation Trust, said: “Our ambition is to create truly outstanding future hospital services and by working in partnership we have the potential to deliver major investment into local services.

“If the NHS is unable to support this funding, then we have entered into some discussions with local authority colleagues about whether they may be in a position to locally support this investment using their own borrowing powers.