Plan to wipe out London NHS debt

Surgeons using medical handwash as they scrub-up before performing an operation in an NHS hospital.

PCTs will invest part of their money in a joint fund to provide £275m

Health bosses are planning to wipe out millions of pounds worth of debt in a cash bail-out proposal for the NHS.

Primary Care Trusts in London have agreed to work together to help debt-ridden hospitals.

According to NHS London, figures show the capital's health debt will reach £579m by 2011 unless action is taken.

NHS London described the decision as groundbreaking and said the plan would see the "historic NHS debt across the capital wiped out".

Under the plan, PCTs will invest part of their money in a joint fund over the next two years to provide £275m.

Financially challenged

They will also relinquish a surplus NHS London funding pot of £304m to make up the difference and clear the debts of ailing trusts.

The move will provide "a debt-free sustainable health service able to deliver high quality care for all Londoners", NHS London said.

Over the last few years the financial health of the NHS in London has improved significantly, and most organisations have returned to the black.

But six hospital trusts are described as "financially challenged" with another five not expected to get out of the red before 2011.

Bold and decisive

"Unless action is taken it is estimated that the 11 trusts and one PCT will be faced with a historic debt of £392 million in 2011," NHS London said.

The 11 hospital trusts referred to are Bromley; Queen Elizabeth Hospital; Queen Mary's Sidcup; Lewisham; Barking, Havering and Redbridge Hospitals; Whipps Cross; St George's; Barnet and Chase Farm; North West London; West Middlesex, and Newham. The PCT is Hillingdon.

Paul Baumann, finance director at NHS London, said: "PCTs should be congratulated for taking this bold and decisive action.

"Failure to deliver this proposal would mean that a number of organisations would be unable to deliver the improvements promised in healthcare for London and healthcare across London would remain patchy.

The capital's 31 PCTs will discuss the idea and decide whether to implement it at board meetings running from Monday.