News | Published September 21 2019

Nuffield Trust: Hospitals have to rely on emergency loans

According to the think tank The Nuffield Trust, hospitals are having to rely on “emergency” loans from government to cover their costs.

BBC analysis of figures released by The Department of Health and Social Care illustrated that the amount of money the government has loaned to hospitals has doubled since 2016-17.

In 2018, trusts owed a combined £10 billion to the government, a figure they must then pay interest on.

Last year, these trusts paid £185 million in interest to the government. 

The Department of Health and Social Care insists this money is then returned to the NHS in the form of investment and support. 

According to the Independent, the average amount of interest paid to government is £205 million a year.The paper also stated that the interest on these government loans can reach six per cent

According to the figures analysed by the BBC, 122 NHS trusts received support from government. This support allows providers to pay for their day-today operation while running at a deficit.

The senior policy analyst for The Nuffield Trust, Sally Gainsbury, said to pay this interest, hospitals are being forced to make cuts on the spending they allocate to patients.

She stated: “Many hospitals can only survive by lurching from month to month with emergency bailouts from central government.

“While it is true that interest paid to the government can in theory be recycled back out to the NHS, there is by no means a guarantee that it will go back to the individual NHS organisation that paid for it.

“That leaves NHS trusts in the greatest financial difficulty, unable to plan their future and make spending decisions that best suit their patients.”

In 2016/17, the total amount of money given as loans to hospital trusts was £4.7 billion. This rose to £7.4 billion the year after and has continued to rise to currently stand at £10.1 billion.

These loans have led to a number of trusts accruing significant amounts of outstanding debt. Foremost among these is King’s College Hospital which currently owes central government £511 million.

In response to these figures, a spokesperson for the Department of Health and Social Care said: “NHS trusts rightly have the responsibility to manage their finances but where trusts do struggle financially, we will provide short-term loans to ensure they continue to run vital services and provide outstanding care to patients, with the interest paid going back to the NHS.”

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Authored by

George Salmon
Political Editor
September 21 2019

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