NHS Improvement to seek approval for hedge fund borrowing

10 Apr 17

NHS Improvement chief Jim Mackey will ask Treasury officials today to sign-off a plan to borrow up to £10bn from hedge funds, The Times reports today.

The NHS is already in talks to borrow the cash to repair NHS infrastructure and help provide specialist care at GP surgeries, the newspaper says.  

Mackey, chief executive of the NHS’s financial regulator, told The Times that the health service currently has a “golden opportunity” to borrow at low interest rates.

“Historically low interest rates are a golden opportunity for the NHS but we are constrained by rigid rules around borrowing that prevent us from taking action,” Mackey said.

“An NHS fund could power the improvement needed to sort out problems at our hospitals and to drive the change required to get the NHS ready for future challenges.”

The Times says the NHS’s maintenance backlog is £5bn and that health officials have reached an outline agreement with one or two hedge funds as well as other investment companies. But no deal can go ahead without Treasury approval.

Mackey also told The Times the NHS had “to be realistic” as it was not likely to get a “£10bn cheque to pay for all the transformation under way and the massive maintenance backlog”. The health service needed to “think long and hard about another way”.

Simon Stevens, head of NHS England, has apparently agreed not to ask for more day-to-day funding.

Shadow health secretary Jonathan Ashworth said it was “shocking” that NHS leaders are in secret negotiations with hedge fund bosses.”

The Times says the NHS could expect to receive similar interest rates to the 1.1% available to the government for 10-year loans.

An NHS efficiency review just over a year ago confirmed the health service could save £5bn by 2020/21 if hospitals followed a standard procedure, Public Finance reported.

The report by Labour peer Lord Carter set out a ‘model hospital’ where expenditure on administration should not exceed 7% by 2018.

It also suggested NHS hospitals trusts should publish receipts on a monthly basis of the top 100 items bought , such as bandages, needles and rubber gloves.

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