£15m loan to RBH from BCP Council is approved and will bring "social good"

Councillor David Brown said he wanted to put more of a focus on arrangements that would bring “social good” as well as a financial return.

His comments came as the cabinet voted to approve the £15 million loan to Royal Bournemouth Hospital for the construction of a new pathology centre.

The deal will see the hospital make repayments over a 15-year period with the council netting a £4.2 million return as a result of a 3.5 per cent interest rate.

Funding for the loan is to come through management of its cash flows – money it has received but is not yet required to spend.

Cabinet member for finance, councillor David Brown, said: “This is a treasury investment to make the most of the money we receive.

“For me this is ideal in showing our approach to investments – it’s making a profit through a project which is giving some social good.”

The new pathology unit would be built either on the existing hospital site or on land at Wessex Fields bought from the council.

It would provide a centralised service for the whole of Dorset, a move, trusts say, which will save money in the long-term but also increase capacity and speed up diagnoses.

Councillor Kieron Wilson, who previously worked at the hospital, welcomed the loan plan and said the new facility was “much needed” and had the potential to save lives.

Local authorities in Blackpool and Northumberland have previously agreed similar loans to NHS trusts, setting a precedent for the deal.

A report to the council’s cabinet ahead of its Wednesday meeting said the money it would earn from the loan would be £2.8 million more than had it kept hold of it.

It said the best case scenario would see the planning process for the facility take place over the next eight months with that followed by a year-long construction period before it is ready to open.

Councillors unanimously agreed to give the go-ahead for work to create a legal agreement for the loan to be started.