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Last Updated: Monday, 22 May 2006, 18:03 GMT 19:03 UK
34m loans to clear hospital debt
Royal Shrewsbury Hospital
The trust has 5,000 staff over two main sites in Shropshire
Shropshire's largest two hospitals are being loaned millions of pounds to help deal with debts.

They will clear a long-term debt of 31.4m owed by the Shrewsbury and Telford Hospital NHS Trust, plus a further 2.8m deficit for this year.

Chief executive Tom Taylor said the money has been borrowed at 4.5% from NHS trusts which have surpluses.

A review of services is underway with an announcement on 10 July starting off a consultation about potential cuts.

The Royal Shrewsbury and Princess Royal, Telford, hospitals combined their trusts in 2003 and a new board was set up in August last year.

Targets hit

Debts are supposed to be repaid within five years but the trust is asking for a further extension from the implied 2008 deadline.

The plan is to start repayments in the 2006-07 financial year with all money repaid by 2012.

Mr Taylor told BBC News that overspends in the first half of last year totalled 8.2m and it hit two out of six patient targets.

But the second half of the year saw all targets hit and the deficit trimmed to 3.9m.

Primary care trusts have contributed their surplus money to the NHS bank which then loans money to struggling trusts.

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