05 January 2007
Seventeen indebted NHS trusts whose income was capped under the transition to payment by results are now eligible for additional financial support in 2007/08, the Department of Health has said.
The trusts reported a combined deficit of more than £186m in 2005/06, with over half forecasting a deficit in 2006/07, eight of them more than 5% of annual turnover. A further ten trusts whose income was also capped yet who have not experienced a deficit will also be eligible for support from their strategic health authorities.
Capping was introduced as part of the transition to the payment by results hospital funding system to ensure that no trust experienced an increase or decrease in income of more than 2% a year until 2008/09, as the system was phased in.
But DoH guidelines — published just before Christmas — explain that eligible trusts 'do not automatically have a right to support and any provision is entirely at the discretion of the SHA'.
Any support given will have to be approved by the DoH and reported in financial plans.
Potential recipient trusts include South Warwickshire General Hospitals Trust, which has a £14m deficit, equivalent to 13% of annual turnover. The trust last year told Public Finance it would not have a deficit at all if it was not capped.
Speaking to PF this week, finance director David Moon said it was likely the new flexibility would involve the SHA forwarding the trust a proportion of what it stood to gain in 2008/09.
He added: 'With any set of rules, there are always anomalies, and there are a handful of anomalies around the capping regime and we are one of those.'
Specialist children's and orthopaedic hospitals will also be able to apply for SHA support. News of the support came as the Right-of-centre think-tank Reform urged the DoH to write off NHS deficits.
But a department spokeswoman said: 'Any support given to organisations under this flexibility is to help organisations manage the transition to full rollout of payment by results and not about cancelling any deficits.'
PFjan2007
