CALL TO ACTION: Please write to your MP asking them to tell the Health Secretary, Matt Hancock MP, to write off Calderdale and Huddersfield NHS Foundation Trust’s deficits and its debt to the Department of Health and Social Care. You can find your MP’s contact details here.
You could tell your MP that: • Calderdale and Huddersfield hospitals are among the many hospitals across England that now rely on ‘loans’ from the Dept of Health and Social Care to pay staff and suppliers. Our hospitals trust is among the most “indebted” and faces ridiculous interest charges. Its total debt to the Dept of Health and Social Care at April 2019 was £144.9m. This is 39.3% if its turnover and in 2018-19 it paid £2.3m interest on this debt. • Calderdale and Huddersfield hospitals trust has been drastically underfunded since 2014, which is why it has to borrow money from the Department of Health and Social Care. • Hospitals’ debts to the Department of Health and Social Care have risen steeply since the introduction of NHS England’s cost-cutting Five Year Forward View 2015 -2020, and the imposition of Sustainability and Transformation Plans. Astonishingly, since 2017-18, these debts have exceeded NHS hospitals’ PFI liabilities.
For some years now, Calderdale and Huddersfield hospitals trust has had to borrow money from the Department of Health and Social Care. It has been forced to take on this debt to the government because over the last few years, it has been so underfunded, and faced with such impossible demands to make so-called efficiency savings, that they’ve not had enough money to pay suppliers and staff.
- The Trust’s total income in 2018-19 was £369m.
- Its total debt to the Dept of Health and Social Care at April 2019 was £144.9m
- Total debt as a proportion of turnover: 39.3%
- Interest paid to Dept of Health and Social Care 2018-19 £2.3m
Calderdale and Huddersfield hospitals trust has been drastically underfunded since 2014
In 2014, Calderdale and Huddersfield hospitals Trust’s finances fell into “deficit”, as a result of impossible underfunding, combined with a £20m+ transfer over 2 years of Calderdale and Huddersfield NHS Foundation Trust funding to Calderdale Council to prop up its cash-starved adult social care services, via the Better Care Fund.
This fund was introduced in 2014 after savage central government cuts to local authority grants meant Councils were starting to run the risk of being unable to meet their statutory social care obligations.
This had a knock-on effect on the NHS. Hospitals were unable to discharge patients with ongoing care needs, because there was no social care available for them. And more and more patients were pitching up at A&E because they couldn’t access urgently needed care anywhere else.
The Better Care Fund allows local authorities and NHS clinical commissioning groups to pool budgets and jointly commission social care services with the aim of taking pressure off hospitals. But it did not bring any new money. Instead it required Clinical Commissioning Groups to redeploy money to Councils, from supposedly ringfenced NHS funding.
NHS England 2013 Better Care Fund Guidance said this meant:
‘hospital emergency activity will have to reduce by 15%’
But of course it didn’t, did it? And the government worsened the problem of over-stretched, underfunded A&E departments, by effectively fining hospitals when they failed to meet the government target for treating or admitting A&E patients within 4 hours. So our hospitals became even more broke.
This is NO WAY TO RUN THE NHS.
Stop running it as a business, give it the money it needs to do its job safely and well, end marketisation, privatisation and financialisation so PUBLIC MONEY GOES TO PUBLIC SERVICES! Not on marketising bureaucrats like Clinical Commissioning Groups, profiteering companies and 3rd sector organisations that waste money on huge salaries and pensions for directors and may well be funded by private equity companies via social impact bonds.
Many Trusts are attempting to restructure and renegotiate their loans – is Calderdale and Huddersfield Trust among them?
Hospitals’ debts to the Department of Health and Social Care have risen steeply since the introduction of NHS England’s cost-cutting Five Year Forward View and the subsequent imposition of Sustainability and Transformation Plans.
Dozens of hospital trusts with budget deficits have become reliant on interest-bearing loans from the Department of Health and Social Care to maintain payments to staff and suppliers.
Astonishingly, the Health Service Journal reports that since 2017-18, total hospital trust debts to the Department of Health and Social Care have exceeded hospitals’ Private Finance Initiative liabilities.
Last year the-then Chief Exec of NHS Improvement, Ian Dalton, said it was “deeply unlikely” the debts could be repaid and the government would have to consider writing off some of them.
UPDATE: Calderdale and Huddersfield hospitals trust said they would reply within 20 working days to these questions – and here are their answers:
- Is Calderdale and Huddersfield hospitals trust talking to NHS regulators and the Department of Health and Social Care about restructuring their loan with the Department of Health and Social Care?
- If so, does this include a bid to get the loan written off?
- If not, what kind of restructure or renegotiation are you looking for? – Freedom Of Information reply to those 3 questions: The Trust works within the overall cash funding regime operated by the DHSC. Our future financial projections assume continued loan funding.
- What are the sources of the Calderdale and Huddersfield hospitals trust 2018-19 income of £369m (as reported in the Health Services Journal), broken down by source? – Freedom Of Information reply: There is a breakdown of the £369m income provided in the Trust’s publicly available annual accounts which can be found on our website as follows: https://www.cht.nhs.uk/about-us/publications/
- When did Calderdale and Huddersfield hospitals trust first take out a loan from Department of Health and Social Care? How much has it borrowed each year since then? – Freedom Of Information reply: The Trust has been in receipt of DHSC borrowing for capital investment from 2014/15 and revenue support from 2015/16. The combined year-end loan balances (cumulative borrowing) by year are available as in the Trust’s publicly available annual accounts using the link provided above.
You can find out about our #NHS4All demands here.
Matt Hancock presented the debt write off as “a landmark step” in the government’s response to Covid 19, but it’s mostly not new money and it’s not a new plan.
NHS England/NHS Improvement had decided in January 2020 to convert around 100 hospital trust debts to Public Dividend Capital, to the tune of around £10bn, from 1 April 2020.
Matt Hancock basically presented an accounting trick, converting the hospitals’ debts into an asset (Public Dividend Capital), with the hospitals having to pay a 3.5% interest charge on the Public Dividend Capital – higher than the interest rate they were paying on their Department of Health and Social Care “debts”.