Morning:
5°c
Action plan to bail out debt-ridden NHS trusts
Sophie Goodchild, Health Editor5 Dec 2008
London health bosses are planning the biggest ever cash bailout of the NHS, the Standard can reveal today.
Debt worth millions would be wiped off the balance sheets of failing hospitals under a radical proposal drawn up by all 31 London primary care trusts.
NHS chiefs say the bailout will ensure all patients across the capital benefit from much-needed service reforms. But critics warn it will be seen as a "reward" for bad management and that cash for improvements will be diverted away from patients in a bid to balance the books.
Health chiefs are expected to finalise the plan by the end of this month - after their boards have given the go-ahead. The financial health of the NHS in London has improved dramatically during the past few years with most trusts now in the black. But six hospital trusts are still defined as "financially challenged" with another four - and one PCT - unlikely to be debt-free by 2011. Figures reveal the capital's health debt will reach £579million unless urgent action is taken.
Under the joint action plan, PCT chiefs will invest a proportion of their own existing cash resources in a collective fund during the next two years. Only the five trusts still repaying debts will be exempt. Each will be levied at a rate of 1.3 per cent which means trusts with the healthiest finances will pay more than others.
Controversially, the "pot" will also contain £304million of surplus funding currently held by NHS London. This would normally have been returned to PCTs to spend on patient care, but now this money and the levy will be used to clear the debts of ailing trusts.
NHS London said PCTs should be "congratulated" for drawing up the debt clearing plan. Finance director Paul Baumann added: "PCTs should be congratulated for taking this bold and decisive action. Failure to deliver this proposal would mean a number of organisations would be unable to deliver the improvements promised in Healthcare for London and healthcare across London would remain patchy. By taking this action PCTs will have much greater leverage to demand better performance from their providers."
But research think-tank The King's Fund warned it had to work. Its chief economist John Appleby said: "This is a once-in-a-lifetime opportunity for the NHS in London. It's vital that health services in the capital are redesigned and reconfigured to make sure we never find ourselves in this position again.
"However, to ensure this measure won't be seen as rewarding poor financial management, NHS London must be satisfied that the root cause of the financial problems facing the handful of trusts receiving the bailout won't return in a few years' time due to persistent problems that haven't been resolved."
Reader views (12)
Since the NHS filed a surplus this April, a 252M surplus, why are these Trusts struggling?
To misinform us just to cover an influx of pen-pushers & extra administration, the NHS really doesn't need, but pushed into the service they are.
Safe with their NHS wages & even safer with out-of-this-world guaranteed pensions.
Laughing all the way to the bank, while our NHS fails to treat sick & needy patients.
- Anon, Clacton, Essex, UK, 07/12/2008 14:09
Report abuse
The Ex NHS employee writing here seems to know remarkably little about the NHS for someone who worked there.
1. Staff and directors are paid according to strict guidelines and benchmarks and in line with comparible posts in the private sector. There are remuneration comittees made up by external non-executives and there is no way anyone could "feather their own nest".
2. It might be correct that not all the money is used correctly, but this is certainly not unique to the NHS. No organisation is perfect but the NHS has tackled the problem by introducing FT status, a huge motivation to improve financial management and something that is showing clear signs of superb improvements.
3. As with most jobs, at the NHS too people apply for jobs and are accepted. Nobody is slaved into jobs and if people are not happy with what they earn, they have the choice to better themselves. Aside, the NHS pays comparable salaries to the the private sector but offers better job security and lots of perks such as NHS discounts and lots of training opportunities.
4. "Refusing to cover gaps" is laughable. Fact is that the NHS struggles to find and recruit all the talent it needs. Have you ever tried to find enough nurses, mammographologist or brain surgeons?
- Gene, London, 06/12/2008 09:16
Report abuse
We now have managers who don't know how to manage properly and thus do not know how to allocate and spend funds wisely and effectively - all this is a symptom of the past 3 decades of a terrible education system in the UK.
- Raymond, London, 05/12/2008 17:38
Report abuse
(1) No Jonathan, not another malcontent, I have just seen the situation at very close quarters and know how disheartened people left behind in service feel.
(2) I agree with Triffidqueen, the hiring of friends and family, and friends of friends is common practice, thoroughly unethical and generally cost more than hiring from a reputable agency or calling Bank staff to cover.
- Ex Nhs Employee, london, 05/12/2008 16:03
Report abuse
HELLO LONDON,
I love it when the word "TRUST" is used, the fact is does anyone trust it anymore?.
HAS ANYONE SEEN "SID"?.
- John L., Scarborough N.YKS. U.K., 05/12/2008 15:19
Report abuse
- Jonathan, London
It's not the NHS that is the problem, it is how it is being run.
Why should anybody in a privileged public service position be paid above the rate of inflation? Why aren't staff on the front line, doing the real work, allowed to be rewarded through performance pay? Especially when you have this government harping on about controlling public sector pay.
No pay rise for the police, even though it was agreed through an independent body.
Labour Mantra: "All animals are equal, but some animals are more equal than others".
- Frank, Home Counties, England, 05/12/2008 15:16
Report abuse
The problem with the NHS is simply that exec's feather their own nests at the expence of valuable staff, the government do give money to the NHS it is simply not being used correctly,
for instance,telephone operators and cleaners are payed a pittance while their bosses cushion themselves against redundancies, often refusing to cover gaps in vital services stating that there isn't enough money to pay for more staff,they then leave the service after years of mis-management leaving others to clear up their mess and woe betide you if you dare standup to them,as you will then find yourself eased out or worse, god help the NHS and all who are left working for her.
- Ex Nhs Employee, london, 05/12/2008 14:19
Report abuse
Ah more malcontents critising the NHS. Frank these debts are historic and pre-date Ruth's directorship of NHS London, in fact since Ruth took over the job of the FIVE London SHA chief execs saving us £100k's she has overseen a massive improvement in NHS Londons financial control, so under the circumstances 5% isn't unfair really. And yes Roz, only the UK has had an NHS free at the point of delivery irrespective of your ability to pay for 60 years now and no, UK voters will not allow any government here to disband it. UK taxpayers still pay less per head for our fully comprehensive service than US taxpayers do for their emergency only service, so we're not doing as badly as the bleaters like to portray.
- Jonathan, London, 05/12/2008 12:41
Report abuse
If they got rid of the culture of giving jobs to friends and families, they would save millions!
- Triffidqueen, Desk in London, 05/12/2008 12:01
Report abuse
ANOTHER nu labor plan...
- Jacqueline, Hampstead, London, 05/12/2008 10:55
Report abuse
Millions wiped off the balance sheets of failing hospitals at the same time Ruth Carnall, chief executive of NHS London, gets a 5% pay rise?
Labour's incentives: if you fail we will reward you handsomely.
- Frank, Home Counties, England, 05/12/2008 10:25
Report abuse
The UK must be the only country on the planet to have healthcare which is free to the patient at the point of use, rather than paid-for by the patient and partially refunded later by the Government. I wonder if it will survive the coming recession . . .
- Roz, Chamonix, France, 05/12/2008 10:01
Report abuse
