Buying back the buildings
Onerous contract provisions forced the government to buy back Independent Sector Treatment Centres, ISTCs, after five years. This means that despite a huge taxpayer investment nine of the 31 centres initially set up have been forced to close, and others will go the same way as contracts end.
In 16 of the ISTC contracts the previous Labour government agreed to repurchase the centres at the end of the contracts under a “Residual Value Agreement”.
The government has already paid out £70.1m under these contracts, and is obliged to buy-back another six at a cost of £116.1m.
The table below details all of the centres for which there was a Residual Value agreement.
|Contract (obligation to acquire at RV)||RV (£m)||Contract end date|
|GC4 East Cornwall||4.3||31 March 2010|
|GC4 North Oxford||15.1||31 December 2010|
|GC4 NEYNL||8.0||31 March 2010|
|GC5W Cheshire & Merseyside||33.3||31 May 2011|
|GC5E Nottingham||41.4||30 March 2013|
|GC6 Maidstone||4.7||5 November 2011|
|GC7 North East London||10.6||30 November 2011|
|GC8 Brighton||11.7||31 May 2011|
|GC8 Portsmouth||10.5||28 November 2010|
|LP2 Bradford||4.5||31 January 2010|
|LP3 Burton||14.4||9 July 2011|
|LP4 Trent||8.2||31 March 2010|
|LP7 Somerset||9.9||14 July 2010|
|LP9 Plymouth||9.2||30 April 2010|
|Total (obligation to acquire at RV)||185.8|
|Contract (option to acquire at RV)||RV (£m)||Contract end date|
|GC4 West Lincolnshire||0.3||31 March 2010|
|GC8 Havant||0.1||31 December 2010|
|Total (option to acquire at RV)||0.4|
|Total (obligatory and optional buyback)||£186.2|
Source: Department of Health