Details of the NHS trust debts to be written off were published by the Department of Health & Social Care on April 9, confirming that 100 trusts are to be set free from cumulative borrowing of £13.4 billion.
Over 90% of this (£12.2bn) is recorded as “revenue debt” – loans taken out to keep the trust running as funding constraints tightened in the last 10 years.
The region which has had to dig most extensively into borrowing to keep trusts running is the ‘Midlands’* with almost £3.5 billion of total debts run up by 23 trusts, 14 of them over £100 million: six of these were over £200m, of which four were over £300m.
According to the DHSC list, London is the second most indebted region, with 15 trusts carrying a total of £3.1bn of loans, two thirds of them over £100m, and one third of them over £200m: London also has the two highest debt totals in England, with King’s College Hospital a staggering £735m in the red and Barts Health £592m.
Eastern region, which also has two thirds of trusts showing debts of over £100m, is the third most indebted area, while the South West, with just 3 of 13 benefiting trusts in the red by over £100m is the least in hock to the Treasury and Department of Health.
Some of the mega deficits are clearly linked to high-profile and costly Private Finance Initiative (PFI) contracts for major hospitals. King’s College Hospital has two major schemes including the disastrously expensive Princess Royal Hospital in Farnborough; Barts Health has the largest PFI contract in the NHS, with £4.5 billion still to pay on £1 billion of new hospitals (Barts and The London); Worcestershire Acute Hospitals’ accumulated £321m debts go back to the dreadful, but relatively small, PFI deal that forced the rundown of services in Kidderminster; and the big debts include other familiar extravagant PFI fiascos, such as Peterborough (North West Anglia), Norfolk & Norwich, Barking Havering and Redbridge, North Cumbria and Sherwood Forest.
Local journalists in Nottinghamshire used a Freedom of Information Act request to reveal last year that the Sherwood Forest Hospitals FT was spending £4,029,105 a month repaying the debt, or about £134,534 a day – at 14.5 percent of its budget. The most recent official figures show that the Trust still has £1.6 billion to pay on the remaining 23 years of the contract – so the deficits are likely to start piling up again as soon as the current loans are cleared.
The PFI model, piling long term capital costs on to revenue budgets for 30-40 years, gives a misleading picture of the underlying problem, especially because the apparently relatively low cost first-wave PFI hospitals also included far too few beds to cope with demand and resulted in inefficient and distorted health care systems, with trusts locked in to rising annual bills for accommodation that proved increasingly inadequate.
But more surprising is the number of extraordinarily high deficits run up by struggling trusts that have not been saddled with bills for major PFI schemes – including St George’s (£315m), United Lincolnshire Hospitals (£378m), University Hospitals of Leicester (£350m), West Hertfordshire (£237m) Northern Lincolnshire and Goole (£210m), University Hospitals of Morecambe Bay (£290m) and East Sussex Hospitals (£233m).
In other words far from boasting about now clearing away these deficits run up by trust bosses struggling to cope with demand, ministers should be apologising profusely to the NHS as a whole for ten years of brutal austerity and conscious under-funding, that has not only driven cutbacks but also resulted in such huge and unpayable debts.
*Surprisingly this DHSC ‘Midlands’ list includes £455m of debts in Hertfordshire (West Herts and east and North Herts Trusts) and Bedfordshire, which historically have been included as East of England. Altering this back to previous arrangements would leave the Midlands with all its largest debts and 20 trusts benefiting from the cancellation, 60% of them over £100m, while the Eastern region total rises to 15 trusts, ten of which are over £100m.
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