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Department of Health spends £1.2bn bailing out NHS providers Department of Health spends £1.2bn bailing out NHS providers
(34 minutes later)
More than 50 NHS institutions were paid a total of £1.2bn in bailouts in the last year, about double the amount spent to prop up providers a year earlier, an investigation has found.More than 50 NHS institutions were paid a total of £1.2bn in bailouts in the last year, about double the amount spent to prop up providers a year earlier, an investigation has found.
The Department of Health paid out in cash and loans to cover wages, debts, replacements for ageing equipment and deficit reduction in 2014-2015, according to the Health Service Journal.The Department of Health paid out in cash and loans to cover wages, debts, replacements for ageing equipment and deficit reduction in 2014-2015, according to the Health Service Journal.
More than 50 struggling NHS providers, including about a third of the acute sector, needed bailing out, in what the trade magazine called a stark illustration of how rapidly hospital finances were deteriorating.More than 50 struggling NHS providers, including about a third of the acute sector, needed bailing out, in what the trade magazine called a stark illustration of how rapidly hospital finances were deteriorating.
A dozen NHS trusts received support worth more than 10% of their annual income, with three getting more than £50m each. Barts Health NHS Trust in east London, which is in special measures, received more than £100m.A dozen NHS trusts received support worth more than 10% of their annual income, with three getting more than £50m each. Barts Health NHS Trust in east London, which is in special measures, received more than £100m.
Related: Corbyn's right. PFI is an unaffordable mistake for the NHSRelated: Corbyn's right. PFI is an unaffordable mistake for the NHS
King’s Fund policy director Richard Murray, a former senior analyst and economist for the Department of Health, told the HSJ the figures were “horrific”.King’s Fund policy director Richard Murray, a former senior analyst and economist for the Department of Health, told the HSJ the figures were “horrific”.
He said: “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.” He said: “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.”
Moreover, Murray warned the cost of bailing out struggling NHS bodies was the “lower end of how bad it is”, after HSJ said its £1.2bn figure was a conservative estimate of providers’ dependence on support from central government. Moreover, Murray warned the cost of bailing out struggling NHS bodies was the “lower end of how bad it is”, after the HSJ said its figure of £1.2bn was a conservative estimate of providers’ dependence on central government.
The figure omits £239m the DoH paid out in “dowries” to providers that took on struggling trusts, nor does it include £177m in “non-recurrent” payments to specialist acute providers released at the end of the last financial year. The figure omits £239m which the DoH paid out in “dowries” to providers that took on struggling trusts, nor does it include £177m in “non-recurrent” payments to specialist acute providers released at the end of the last financial year.
In August, NHS trusts were told by Monitor, the health service regulator, to fill vacancies “only where essential” as it warned that current financial plans are “quite simply unaffordable”.In August, NHS trusts were told by Monitor, the health service regulator, to fill vacancies “only where essential” as it warned that current financial plans are “quite simply unaffordable”.
In a letter to NHS trusts, Monitor’s chief executive David Bennett warned of an “almost unprecedented financial challenge”, in the face of a reported expected deficit of £2bn in 2015-16.In a letter to NHS trusts, Monitor’s chief executive David Bennett warned of an “almost unprecedented financial challenge”, in the face of a reported expected deficit of £2bn in 2015-16.
HSJ’s report makes no specific mention of the costs to hospitals under the private finance initiative – where public infrastructure projects were funded with private capital – which has left many buckling under the weight of debt. The HSJ’s report makes no specific mention of the costs to hospitals under the private finance initiative (PFI) – where public infrastructure projects were funded with private capital – which has left many buckling under the weight of debt.
In an article for the Guardian last month, Labour leadership frontrunner Jeremy Corbyn cited figures from the Unite union that showed 15 NHS trusts are spending more than 5% of their annual budgets on PFI financing, and two thirds of NHS trusts in deficit have PFI debts.In an article for the Guardian last month, Labour leadership frontrunner Jeremy Corbyn cited figures from the Unite union that showed 15 NHS trusts are spending more than 5% of their annual budgets on PFI financing, and two thirds of NHS trusts in deficit have PFI debts.
George Osborne, the chancellor, criticised PFI when he was shadow chancellor in 2009, saying it was a flawed model that must be replaced. However, despite having had to deal with public bodies struggling under excessive PFI debts, the coalition overhauled the scheme and continued to sign similar deals under a successor known as PF2.George Osborne, the chancellor, criticised PFI when he was shadow chancellor in 2009, saying it was a flawed model that must be replaced. However, despite having had to deal with public bodies struggling under excessive PFI debts, the coalition overhauled the scheme and continued to sign similar deals under a successor known as PF2.
Responding to the bailout revelations, a DoH spokesman said: “We are investing the additional £8bn that the NHS has said it needs to implement its own plan for the future.Responding to the bailout revelations, a DoH spokesman said: “We are investing the additional £8bn that the NHS has said it needs to implement its own plan for the future.
“We know that the environment is tough but the NHS must deliver its side of the plan by implementing the sort of cost-control initiatives the government has highlighted recently, like clamping down on ripoff staffing agencies and expensive management consultants.”“We know that the environment is tough but the NHS must deliver its side of the plan by implementing the sort of cost-control initiatives the government has highlighted recently, like clamping down on ripoff staffing agencies and expensive management consultants.”