£107m of debt at Northampton General Hospital written off by government

From the start of this month, almost £3.5 billion of NHS debt from 23 trusts across the Midlands will be scrapped, as announced by Health Secretary Matt Hancock last week.

And yesterday (April 9) it was revealed that Northampton General Hospital NHS Trust’s level of debt to be written off amounts to almost £108 million. This includes revenue debt of £97.78 million and capital debt of £10.18 million.

Mr Hancock said: “As we tackle this crisis, nobody in our health service should be distracted by their hospital’s past finances.

“Today I’m pleased to confirm the value of this package. This debt write off will wipe the slate clean and allow NHS hospitals to plan for the future and invest in vital services.”

NHS chief executive Sir Simon Stevens added: “We’ve advocated for and support this pragmatic move which will put NHS hospitals, mental health and community services in a stronger position – not just to respond to the immediate challenges of the global coronavirus pandemic, but also in the years ahead to deliver widespread improvements set out in our NHS Long Term Plan.”

Under the new rules set out in a letter to all NHS Trusts, should hospitals need extra cash this will be given with equity, rather than needing to borrow from the government and repay a loan.

Under existing rules, some hospitals have taken out loans to plug financial gaps in their day-to-day (revenue) or capital (infrastructure) budgets. It is not known yet whether Northampton General Hospital NHS Trust had been forced to take this measure.

The letters sent out to the trusts also include details on every local area’s capital budget for 2020/21.