Revealed: 11 trusts whose DH bailouts were converted to loans

As previously reported by HSJ, a group of foundation trusts was told in late 2014-15 that bailouts they had received from the DH were being converted to debt, as part of a push for financially distressed organisations to “manage their finances better”.

Until recently, the identities of the organisations involved were not public. However, recently released figures from the department show that the group includes some of the most severely challenged FTs in the country.

In total, 11 FTs drew down £167m in “interim deficit support” loans last year to cover revenue expenses such as wages and drugs.

_{* Basildon and Thurrock told HSJ that as of the start of September 2015 it had repaid £4m the amount borrowed in 2014-15, with the balance being repaid this month}

Among them, University Hospitals of Morecambe Bay FT, Medway FT, Tameside Hospital FT and Queen Elizabeth Hospital King’s Lynn FT all drew down eight-figure sums to support their revenue spending.

In cash terms, the largest deficit support loan, at £25.3m, went to Milton Keynes University Hospital, which last year received bailouts worth a higher proportion of its turnover than any other NHS provider in the country.

Most of the biggest interim support loans issued by the DH last year are due to be repaid in five years.

A further £67m of bailout loans was provided last year for trusts to make urgent capital investments.

The switch to loans for FT bailouts marked a significant departure from past practice, which was to provide bailouts in the form of “public dividend capital” that was not expected to be repaid.

The department has said the shift was intended to ensure that the levels of department support provided are “better recorded in trust accounts” and that the “full cost of recovery” was considered at the point a “recovery plan” for the troubled trust is produced.