Labour Critical of NHS Hedge Fund Plan

A major argument is brewing over plans to borrow £10 billion from hedge funds in order to finance hospital repair and infrastructure projects in the NHS.

Health bosses believe that low interest rates make this proposition an enviable prospect.

Thus, it has been suggested that an infrastructure funded partly by private cash could enable local services to apply, and create a flexible pot of funding.

Senior NHS executives are already discussing the matter with several hedge funds, and Jim Mackey, chief executive of the financial regulator NHS Improvement, has already met with treasury officials to encourage them to approve the borrowing plan.

Mackey fully supports the hedge fund policy, suggesting that it can play a major role in providing valuable NHS services.

“We have to be realistic because we are not going to get a £10 billion cheque to pay for all the transformation under way and the massive maintenance backlog, so we need to think long and hard about another way. Historically low interest rates are a golden opportunity for the NHS but we are constrained by rigid rules around borrowing that prevent us from taking action.”

But health unions have been critical of the plan, describing it as nothing short of a major cry for help.

It is considered risky by many to invest in hedge funds, which often utilise aggressive strategies in an attempt to make trading returns.

Furthermore, many will be concerned about the notion of borrowing money from financial sector institutions, considering the publicly-funded status of the NHS.

Nonetheless, the 1.1% interest rates that could be available for NHS loans garnered from hedge funds will be attractive to healthcare bosses.

Simon Stevens has already indicated that billions of pounds of investment is required in order to fund buildings, equipment and IT systems.

But Jonathan Ashworth, the shadow health secretary, stated that it is “shocking NHS leaders are in secret negotiations with hedge fund bosses”.

Ashworth believes that investing more money in rapid-response teams would help keep elderly people out of hospital, and thus assist with improving services.

Initial reviews of healthcare funding have already established that the NHS faces a gulf of £10 billion.

And it is already known that NHS trusts have exceeded the deficit target figure that was set for them by the government for the previous financial year.


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