A health trust which closed community hospitals in Oxfordshire to save cash is handing out a £3m loan, writes Victoria Owen and David Horne

Less than two years after the Community Health Trust was forced into controversial cost-cutting, it is now dishing out emergency funds to the county's health authority.

The authority faces debts of £5.4m at the end of the financial year after paying court fees for clinical negligence cases.

But the loan deal has been attacked by campaigners who fought to save Burford and Watlington hospitals.

Dr Sandy Scott, a GP in Shipton-under-Wychwood and a leading light in the Save Burford Hospital Campaign, said: "The whole thing is a shambles. Burford Hospital was closed to save the Community Health Trust money - around £350,000 a year. "In one fell swoop the west of Oxfordshire lost its respite care and hospice care. To find that the trust is now able to loan £3m is staggering."

Chris Parsons, of the pressure group Watlington Hospital at Risk, said: "The sole motivation for the closure of Watlington Hospital was to save money. It is shocking that, although the trust has got this much money sitting there, they are still proceeding with the closure of the hospital. One would have thought they could have afforded to keep it open."

Health authority managers cannot turn to the cash-strapped South-East NHS Executive for help and they cannot ask neighbouring health authorities for help because of a ban on loans between NHS regions. Instead they have put out the begging bowl to the tiny Community Health Trust, based in Witney.

The trust announced it would save £1.15m a year by closing the hospitals in Burford and Watlington and opening a new 30-bed centre in Bicester instead.

It has accumulated a substantial amount of cash by investing funds for future building work and has promised £3.03m to the health authority.

Finance director Mark Sharman said: "This money is profit from our capital receipts which will be used for bricks and mortar in years to come.

"Our services won't be compromised in any way by giving the health authority this loan and we will be repaid early within the next financial year." Health authority spokesman Steve Argent said: "We're grateful to the community trust for this loan, which will contribute to help us out of a difficult situation. We will receive the money immediately and pay it back as soon after April 1 as possible.

"The problem was caused by the number of clinical negligence claims which were spread over a number of years, but which all concluded at around the same time.

"We have to pay the money out, then go through the lengthy process of claiming most of it back from the NHS Litigation Authority, causing a large - if temporary - shortfall in our funds."

Story date: Wednesday 23 February

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