14th Aug, 2020

£321million debt wipe boosts hospitals

Ross Crawford 10th Apr, 2020

UNDER-PRESSURE health chiefs have had had £321million in debt written off by the government in a bid to help the NHS tackle the Coronavirus crisis.

The move, part of a £13billion debt write off by the Department of Health and Social Care, has been welcomed by local health chiefs at Worcestershire Acute Hospitals NHS Trust in the fight against COVID-19.

It means an immediate cash boost for the Trust, which had been looking at an ongoing debt of £80million alone for the 2019/20 financial year, which ended this month.

At a stroke the move releases an extra £9.2m in capital spending instead of the £2.2m WAHT would have been expecting.

Worcester’s MP Robin Walker told the Observer he was pleased with the news and said it would put the NHS in a stronger position to be able to respond to the global coronavirus pandemic and ensure it had stronger foundations for the future.

“It’s welcome news the Government is providing the NHS with whatever it needs to tackle coronavirus and this announcement provides the NHS immediate financial certainty to plan and deliver their emergency response as well as providing an increase in testing across the country.”

“As we tackle this crisis, nobody in our health service should be distracted by their hospital’s past finances. The debt write off will wipe the slate clean and allow NHS hospitals to plan for the future and invest in vital services.”

“I remain committed to providing the NHS with whatever it needs to tackle coronavirus, and the changes to the funding model will give the NHS immediate financial certainty to plan and deliver their emergency response.”

The decision to write off more than £13billion of debt is part of a package of major reforms to the NHS financial system and begins from the start of the new financial year.

The package is launched in combination with a simpler internal payment system to help NHS trusts in dealing with the coronavirus response, which was agreed with NHS England last week.

It also means hospitals can get the necessary funding to carry out their emergency response, despite many hospitals cancelling or limiting their usual services such as elective surgery or walk-in clinics due to the virus.

Under the new rules the government should hospitals need extra cash this will be given with equity, rather than needing to borrow from the government and repay a loan.

The moves comes on top of the capital facility launched in February to ensure the NHS has access to whatever extra capital investment it needs, without charges, to respond to the Covid-19 outbreak.

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