FINANCE: Northumberland county council has agreed in principle to lend the foundation trust up to £100m in order to buy out its private finance initiative contracts.

A spokeswoman for the trust told HSJ: “The loan was approved in principle by Northumberland County Council on 22 February and the matter will now follow Monitor’s approval process.” 

She added that the trust was unable to give further details about the deal while discussions were still underway. As HSJ reported before the council meeting, the plan is for the county council to raise the money through borrowing from the Public Works Loans Board, and then on-lend it to the foundation trust. It is one of a number of possible mechanisms being investigated by FTs as a means of reducing the cost of their PFI commitments.