Scrapping hospitals’ debt is ‘chance for fresh start’

Politicians across the region have welcomed a decision to scrap hundreds of millions of pounds of debts that NHS hospitals have amassed, saying it represents a opportunity to overhaul the services.

Health Secretary Matt Hancock’s announcement will see £1.3 billion of debt wiped off across 15 NHS trusts in the North East and Yorkshire, including £144.6 million from South Tees, £32 million from York, £30.1 million from County Durham and Darlington and £4.9 million from Harrogate.

The move is designed to enable hospitals to better respond to the immediate challenges of the global coronavirus pandemic, but also in the years ahead to deliver widespread improvements set out in the NHS Long Term Plan.

While many NHS trusts manage strong finances, under the existing rules, some took out loans to plug financial gaps in their budgets.

Last summer, after visiting Middlesbrough’s James Cook University Hospital and Northallerton’s Friarage Hospital, Care Quality Commission inspectors found “harm occurred” to patients because beds were not available and rated South Tees Hospitals NHS Trust’s critical care as ‘inadequate’.

In September, the trust’s chief executive Siobhan McArdle stepped down, saying the demands for further efficiency savings at the trust “too great a challenge”.

Mr Hancock said: “As we tackle this crisis, nobody in our health service should be distracted by their hospital’s past finances.”

The letters also include details on every local area’s capital budget for 2020/21, providing certainty to the NHS for the new financial year and enabling investment in vital longer-term infrastructure upgrades as soon as possible.

The budgets come on top of the capital facility the Government 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.

The Health Secretary said the changes would also mean hospitals will get all 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.

Ben Houchen, Mayor of the Tees Valley, said hospitals such as James Cook would now have much more money available to help people and fight Coronavirus.

He said: “This is incredible news for our hospitals and health services across Teesside, Darlington and Hartlepool.

“The Government has also wiped off the debt of Darlington hospital, which will boost money and resources in our hospitals right across the region.

“In practice this means money to frontline hospital services rather than using vital money to make debt payments to banks and funders.”

Councillor Kevin Nicholson, Darlington Borough Council’s health portfolio holder, said: “I support any measures which go towards enhancing the delivery of local health services for people here in Darlington, particularly at a time when they are under extraordinary pressure. Locally the County Durham and Darlington NHS Foundation Trust have worked tirelessly to balance budgets and at the same time have continued to provide first class care for our communities, which is a credit to their dedication and commitment.

“In the years ahead it’s important to measure the success of this intervention by how it’s impacted the widespread improvements set out in the NHS Long Term Plan.”

Councillor Jim Clark, a former chairman of North Yorkshire’s scrutiny of health committee, said while clearing the debts was welcome, hospitals would only remain debt-free if a more sustainable system was introduced. He said changes introduced in response coronavirus represented an opportunity to improve healthcare by uniting services.

He said: “Once we get through the present difficulties there will be lessons to be learnt. The staff have worked magnificently bringing together the NHS and the care sector and this is something we need to look at carefully as we go forward. It will be an opportunity to create a better and more resilient health sector.” [kofi]