13th Aug, 2020

'It's a game-changer' - Govt writes off health trust's £321m debts

Ross Crawford 6th Apr, 2020 Updated: 6th Apr, 2020

THE local health trust has had £321million in debt written off by the government.

The move, part of a £13billion debt write off by the Department of Health and Social Care, comes as staff at Worcestershire Acute Hospitals NHS Trust battle the coronavirus crisis, and has been welcomed by local health chiefs.

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.

Redditch MP Rachel Maclean hailed the news as ‘game-changing.’

“It’s well known that the debt our local Trust was saddled with was a millstone around its neck,” she said.

“This decision to write off its historic debt is game-changing and will enable the Trust to plan for the future and invest in vital services.

“Along with my fellow Worcestershire MPs, we have been having conversations with the Health Secretary since the beginning of the year on this issue. I’m very pleased HE has listened and delivered for our Trust.

“The Government remains 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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