£4.8 million of debt to be wiped from Harrogate and District NHS trust

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More than £4.8million in debts owed by the trust which runs Harrogate Hospital is being wiped by the government to help it cope during the coronavirus crisis.

Health Secretary Matt Hancock last week pledged to "wipe the slate clean" for trusts up and down the country in a vital boost which will see £13.4billion of debts crossed out of NHS balance sheets nationally.

He said on Friday that “nobody in our health service should be distracted by their hospital’s past finance” as Harrogate and District NHS Foundation Trust was told it will have its debts completely cleared.

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Now, Jonathan Coulter, the trust's Finance Director, has welcomed the announcement. He said: “The loan we took out was to enable us to be able to pay our suppliers more quickly. In line with the rest of the NHS, we think this ‘reset’ of finances is helpful for trusts both at this point in time and going forward over the coming years.”

The trust which runs Harrogate Hospital has had 4.8million in debts written off.The trust which runs Harrogate Hospital has had 4.8million in debts written off.
The trust which runs Harrogate Hospital has had 4.8million in debts written off. | jpimedia

The changes will provide a much-needed financial boost during the pandemic and are part of a package of major reforms to the NHS financial system.

The Department of Health and Social Care - working with NHS England - said the changes will mean health trusts will get all the funds needed to carry out their emergency response despite many hospitals, including Harrogate, cancelling or limiting their usual services such as elective surgery or walk-in clinics.

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And hospitals needing any extra cash will be given it with equity, rather than having to take out a costly loan under the new rules.

However, critics have argued that NHS trusts should never have been put into a position where they had to take out loans from the government – and the NHS has been chronically underfunded for the last decade.

John Lister, secretary of the campaign group Keep Our NHS Public, said: “It’s like a gang of burglars seeking gratitude after handing back some of the jewels they have stolen: £13.4 billion averages to a refund of just £1.3billion per year for the last ten years – far less than the real terms cuts that have been imposed by the virtual freeze on funding while the population and its health needs have grown.”

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Announcing the plans last week, Health Secretary Matt Hancock said: “As we tackle this crisis, nobody in our health service should be distracted by their hospital’s past finances.

“This £13.4 billion debt write-off will wipe the slate clean, and allow NHS hospitals to plan for the future and invest in vital services.

“I remain committed to providing the NHS with whatever it needs to tackle coronavirus, and the changes to the funding model will give the NHS immediate financial certainty to plan and deliver their emergency response.”

By Jacob Webster, Local Democracy Reporter

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