Their debts…

training primary care NHS Their Debts...
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If you want your stuff read, you need a good headline.

How about…

Trusts are now so deep in debt, they owe more in bail-outs from the DH than they owe to PFI companies.

Thank-you, to the excellent Sally Gainsbury for that little attention grabber.

The NHS is sinking in debt. How did we get here?

Since 1948, on average, every year, up to 2010, the NHS has had funding uplifts of about 4%. More or less, keeping pace with demand.

Come the banking crisis of 2010 governments around the world did the economic equivalent of a handbrake turn. HMG was no different.

With apologies to economists everywhere, for crude over-simplification, there are (roughly) two ways out of a recession.

Print money; spend it on public infrastructure projects, which creates employment, which raises taxes, people buy stuff, which means people make stuff, which raises taxes… cross yer fingers, hope to come out the other end, stronger and wiser.

Alternatively; keep spending to a minimum, accumulate a cash buffer, cross yer fingers, sit back and wait for global economies to pick up, hope to come out the other end, stronger and wiser.

That’s it, more or less…

HMG chose the second… austerity. As a result, between 2010 and today the NHS has been struggling with, give or take, 1% annual uplift and coping with rip-roaring demand.

Nearly ten years ago I created this graphic. I won’t dignify it as a graph!

It seemed pretty clear to me, even if we got a shot-in-the-arm, cash injection, NHS finances would be irrecoverable (The big blue bit) and the damage would create a tectonic shift in how we deliver services, who does it and where.

I’m sorry to say, I think I’m right.

The much vaunted £20bn works out well under the historic average uplift. Factor-in the massive gear-change in demand, for which health planners were totally unprepared and have no answer… and we are where we are.

The consequences of austerity have reverberated everywhere…

  • Workforce, a mess.
  • Social care, the mother-of-all-messes.
  • Trust’ finances…the granddaddy of a mess.

If Trusts were businesses, by now, the broker’s men would be carrying out the furniture.

The upshot; abandoned targets, widening health economies to try and get them to balance beyond singe organisations. The CQC declaring Trusts ‘good’ and at the same time classifying them ‘unsafe’ because they can’t find enough nurses and the DH quietly lending Trusts money, to bail them out.

Nothing is going to happen until we find a way of sorting out the money.

Even if we had enough nurses, we couldn’t afford to employ them. Indeed, there’s no money to fund the 5,000 new, nurse-training placements, this year.

Innovation? Even if we could persuade the public and the professions machine learning can substitute for human decision making, there’s no money to buy the kit.

All the time Trusts have the Damoclesian threat of paying back debt, they cannot invest.

Solution? When companies get in trouble they adjust their balance sheet.

Trusts have balance sheets. Instead of shares, they have public dividend capital. PDC is held by the Treasury, on behalf of the public. The level of PDC was decided when Trusts were first set up.

It is perfectly possible to adjust it, issue more PDC in exchange for Trust’s debts. Like a business might offer shares to its creditors, so Trusts could offer the Treasury more PDC, in exchange for taking the debt off their balance sheets and absolve repayment pressures.

No extra money, just recalibrating and rebooting the accounts.

You’re right… if you are thinking the Treasury won’t like it.

But… Trusts are not in a mess because they have been casual with their cash, or profligate.

  • They’ve been obliged to provide more care than they’ve been paid for.
  • They’ve had to supplement staff vacancies with costly temporary staff because workforce planning has failed.
  • They’ve had efficiency impeded by a confused digital strategy and poor procurement.

I would argue, they are owed the money the people call their debts.

Contact Roy – please use this e-address – roy.lilley
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Reproduced at TrainingPrimaryCare.com by kind permission of Roy Lilley.