The chief executive of the National Health Service has admitted that taxpayers will have to bail out hospitals struggling with debts from Private Finance Initiative schemes.
By Martin Beckford, Health Correspondent
10:00PM BST 28 Sep 2011
Sir David Nicholson said that some of the trusts struggling to balance their books, and so reach semi-independent Foundation Trust status, may have to be “subsidised”.
However he risked a rift with the Health Secretary, Andrew Lansley, by denying his claim that hospitals with large PFI burdens are on “the brink of financial collapse”.
As The Daily Telegraph has disclosed, 22 NHS hospitals around England have been identified as being unable to balance their books, because of the size of the annual payments they must make to the private firms who built their new units.
Ministers are expected to set out plans for how to deal with them later this week, so that all hospitals can meet the target of reaching Foundation Trust status by April 2013.
The options could include mergers or takeovers by more successful trusts, but speaking at the public inquiry into the scandal at Stafford Hospital on Wednesday, Sir David admitted that public money is also likely to be used to bail out struggling hospitals.
This would likely happen by the Treasury making one-off payment that would reduce the annual interest charge on the 30-year contracts, or by “paying off the mortgage early”.
Sir David said: “There may be in some circumstances need to subsidise them from the taxpayer to enable them to take forward their Foundation Trust application.
“This will be a very small number of organisations, but it may be necessary to in a sense fund them differently, possibly with more resource in order for them to be financially and clinically sustainable and locally accountable.”
However he contradicted the Government’s claim that PFI debts were putting the hospitals at financial and clinical risk.
“These are not organisations that are in financial difficulty now,” Sir David said.