One in four acute trusts need bailout funds

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£605 million dished out for interim support

The Department of Health gave bailout funding to one in four hospital trusts last year, with several organisations receiving aid worth more than 10% of their turnover.

Figures show that £605 million was paid out in interim support to 35 trusts over 2013/14, as more providers went into the red. While £100 million was allocated for urgent repairs on buildings and infrastructure or new equipment, the majority of the hand out – totaling approximately £509 million – shored up revenue spending of trusts in deficit.

The statistics also reveal that six trusts received support that amounted to more than 10% of their reported turnover for the year. The Department of Health have stated that bailouts to non-foundation trusts have increased because of 2012 health reforms removing many of the opaque means used by local NHS commissioners to support financially challenged providers.

Additional support money

Finance experts remain skeptical however. Richard Murray, The King’s Fund policy director, told the HSJ that the idea “that in previous years commissioners were providing this support, and it’s not getting any worse” was an “overly optimistic play on the numbers.” He continues “There were more deficits in the system in 2013/14 than in the previous year. The optimistic view might be that this is down to the same thing: commissioners not providing support. But if that’s all it was, there would have been a whopping surplus on the commissioner side and there was no such thing.”

Andy McKeon, Nuffield Trust senior policy fellow said “some of the apparent increase” in bailouts was “possibly a function of greater transparency.” He added “On the other hand, as Monitor has pointed out, it seems that local unofficial support to trusts is still being provided through non-tariff payments. The size of the increase together with the overall reduction in trust surpluses…still points to a fair chance of the NHS having a financial crisis this year, and a much greater chance in 2015/16.”

A Department of Health spokeswoman said “In some situations we provide interim financial support, dependent on trusts developing and sticking to a strong recovery plan, to make sure they continue to deliver safe and sustainable services within a balanced financial position.”

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