This story was first published in digitalhealth.net
£13bn of NHS debt to be written off
Health Secretary Matt Hancock has announced that more than £13 billion of NHS debt will be written off.
Forming part of NHS reforms, the changes will help the health service through the coronavirus pandemic, with the financial support also set to deliver the long term commitments made by the Department of Health and Social Care last year.
The package of reforms, formed in collaboration with NHS England, will begin from the start of the new financial year (April 2020). The package combines with a simpler internal payment system to help trusts deal with coronavirus, agreed with NHS England last week. Despite many hospitals having to cancel normal operations to divert staff and resources towards tackling the pandemic, the move should mean hospitals get the necessary funding to respond accordingly.
107 NHS trusts have an average £100 million revenue debt each, with the two trusts with the highest debt reaching a total of more than £1 billion.
Should hospitals need extra cash, this will be given with equity, rather than having to borrow from the government and repay the loan.
Hancock said: "As we tackle this crisis, nobody in our health service should be distracted by their hospital’s past finances. Today’s £13.4 billion 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."
Simon Stevens, chief executive of NHS England, added: "We’ve advocated for and support this pragmatic move which will put NHS hospitals, mental health and community services in a stronger position - not just to respond to the immediate challenges of the global coronavirus pandemic, but also in the years ahead to deliver widespread improvements set out in our NHS Long Term Plan."
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