Government writes off £108m of historical debt for Northampton General Hospital - with another £8m to pay for Covid-19 bills

NGH has had 108m of historic debt written off by the Government.

The Government has paid out more than £116million to Northampton General Hospital to write off historical debt and pay the bills of tackling Covid-19.

On April 1, the Department of Health and Social Care announced a £13bn fund to square away the historic debt of 100 hospitals across the UK.

Now, it has been revealed £108m of this was used to pay off all of NGH's outstanding loans.

The write-off took the hospital's deficit from -22m to +4m in April.

Meanwhile, a further £2.8m has been paid out to cover the revenue costs and loss of income caused by Covid-19.

The hospital is also now being funded with a £4.4m "block payment" top-up every month to cover the loss of income - and, when the hospital incurred £2.4m of additional costs in April 2020, the Government covered that as well.

It comes as papers from a meeting of the hospital's board of directors on May 28 spelled out how much the Covid-19 pandemic had cost it in the past two months.

Because of the top-up payments, the hospital's monthly "income" has gone from operating at a loss in the first three months of 2020 to +£4m in April.

The hospital was suffering from a steeper and steeper deficit in the months before the write-off. Between September 2019 and March 2020, NGH incurred a deficit of approximately £22m in just six months.

Now, the hospital's deficit has been written off overnight and jumped from approximately -£22m in March to +£4.8m in April.

Health Secretary announced the debt write off in April as a "financial reset" for hospitals so they could focus on combatting Covid-19.