Vast £1.2 Billion Department of Health Bailout Made Public

Figures published today indicate that the Department of Health paid out a staggering £1.2 billion on bailouts in 2014-15.

The ten-figure sum was earmarked in order to assist no less than fifty troubled NHS providers, all of whom faced difficulties in meeting pay commitments, along with remunerating creditors and other expenses.

It is also telling that some of the £1.2 billion figure was required in order to address structural deficiencies in the health service. The replacing of ageing equipment and need to cut fiscal deficits in existing NHS budgets also contributed to the overall bailout.

Not only is the figure paid out by the Department of Health a large one, but there is also strong evidence that the bailout situation within the department is deteriorating.

The £1.2 billion total was in fact double the amount that was paid out by the department during the previous fiscal year.

Additionally, it is clear that the acute sector is becoming ever more dependent on bailouts. The proportion of this tranche of the NHS that required bailouts rose to one-third in 2014/15, a significant increase from the one-quarter equivalent from twelve months previously.

And some NHS trusts are evidently struggling significantly to meet costs. Over a dozen NHS trusts received bailout money that was worth more than 10 per cent of their annual income.

With three trusts having received funding in excess of £50 million, the level of bailouts within the NHS certainly cannot be described as trivial.

Commenting on this issue, King’s Fund policy director Richard Murray, a former senior analyst and economist for the Department of Health, pulled no punches in describing the figures as “horrific”.

Murray opined that the picture was one of irrevocable structural disintegration. “It just strikes me again how much the payment system in the NHS looks fundamentally broken – if you’ve got this many [providers] now reliant on an alternative source of funding to their commissioners.”

The NHS is, of course, not the first organisation of significant size and scale to receive bailout money in what is this age of austerity and economic malaise.

To give one example, the HBOS banking and insurance group received £37 billion of public money to prevent its collapse in October 2008.

But the figures reported with relation to the Department of Health do paint a picture of a gulf in funding in the health service that will need to be addressed in the immediate future.

And a particularly troubling aspect of this news is that the £1.2 billon figure does not convey the true extent of the bailout.

This does not include the £239m that the DH paid out last year in ‘dowries’ to struggling trusts, nor £177m in ‘non-recurrent’ payments to specialist acute providers to which NHS England agreed last year.

The serious nature of the budgetary problems that have been succinctly illustrated by these revelations led the aforementioned Murray to muse rather gravely on “whether the department will run out of cash [in 2015-16].”

 

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