£35million loan 'must be spent improving South Tyneside Hospital' if move goes ahead, council pledges

Leaders at South Tyneside Council (STC) are in talks with the hospital trust about the possibility of securing funding worth £35million to press ahead with the controversial Path to Excellence reforms.

But they have also warned care managers they will be seeking extra assurances from government about the potential implications of such a deal.

A motion passed by the council agreed: “Only to support a loan of this type – if applied for by the South Tyneside and Sunderland Foundation Trust – if the loan would facilitate the development of the physical infrastructure of the site – including a new multi-storey car park – to fulfil the commitment to improving and expanding local health services in the Borough.”

As well as £35million from STC, NHS bosses have also approached Sunderland City Council about the possibility of a separate £15million loan.

If agreed, this would see the council take advantage of cheap credit on offer from the government’s Public Works Loan Board, which would then be passed on to care chiefs.

Work is underway on the second Phase of the Path to Excellence, which will cover areas such as surgery, scans and blood tests in Sunderland and South Tyneside.

The motion was originally tabled by independent councillor John Robertson and called on councillors to reject any loan if it could see the council profit from ‘the downgrading of South Tyneside District Council’.

“The whole of the borough is totally any funding of the downgrading of the hospital,” he said.

“I ask [the council] to confirm we will not be partners to the downgrading of the hospital.”

Coun Robertson’s original motion was amended by Labour’s Coun Joan Atkinson, cabinet member for Area Management and Community to emphasise the conditions under which the council may support such a loan.

Coun Atkinson also claimed national NHS bosses had not ruled out providing funding directly and there had not yet been a ‘formal request’ for a loan.

Questioned by Coun Robertson on why there had been discussions between the council and NHS about a possible loan, Coun Atkinson called them ‘exploratory talks with an end to see how much they could borrow’.