Eleven Trusts NHS Bailout Cash Converted to Loans

As the revelations regarding the amount of bailout cash made available to NHS trusts sinks in, more information has seeped out regarding the Department of Health’s scheme.

It seems that the department proffered bailout money to a raft of particularly troubled hospitals in the form of loans, according to official figures.

A group of foundation trusts were informed in the latter months of the 2014-15 financial period that bailout would be converted to debt.

This is part of an overall policy of encouraging financially distressed organisations within the NHS to manage their finances more adequately.

The identities of the organisations involved in the scheme have now also been made public. 11 trusts effectively borrowed a total of £167 million in what are described as “interim deficit support” loans during the previous financial year.

Monies acquired by the trust contributed towards a raft of different expenditure, including staff wages and pharmaceutical products.

The five biggest recipients of loans from the Department of Health were the Milton Keynes Hospital Foundation Trust, Medway Foundation Trust, the University Hospitals of Morecambe Bay Foundation Trust, the Barnsley Hospital Foundation Trust and the South Tees Hospital Foundation Trust.

Each of these organisations received loans totalling at least £17.7 million, with Milton Keynes having acquired a payment in excess of £25 million.

Repayment terms for the loans presented to the NHS trusts have been set at a five-year period. It is not clear at the time of writing whether the Department of Health is likely to accept negotiation of these terms.

The decision to offer bailout packages as a form of credit represents an alteration in Department of Health policy.

Previously, bailouts were provided to NHS trusts in the form of “public dividend capital”. These monies were bailouts in the truest sense of the word, as there was no expectation on behalf of the government that they would be repaid.

According to the Department of Health, the shift in ethos is intended to ensure that departmental support can be provided with the condition of a recovery plan being put in place.

The apparent intention to recover money offered as bailouts will perhaps alter perception of the scheme, even though questions still clearly need to be answered regarding NHS funding and budgets in general.

 

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