Lansley Bails Out Hospital

To most of us a bail-out is free money. It is not. It never is because there are always strings attached. The banks (RBS, HBOS, Northern Rock) were "bailed out" by the government buying preferential shares in the companies, the banks got the money which they could use to pay off their debts, but the government has the shares which means that in the future they can sell the shares and re-coup their cost.

The NHS white paper says (1.22):

"We are very clear that there will be no bail-outs for organisations which overspend public budgets."

This says that the government will not give free money to hospitals who go into debt. It also means that the government will not give loans to hospitals that go into debt (remember: bail-outs, like the banks, can be loans too). The government's plan is that if a hospital goes into debt it should take out a commercial loan, presumably secured on the hospital's assets. Unless, that is, you are a hospital in Tory Berkshire, in which case Lansley will bail you out. Heatherwood and Wexham Park Hospitals in Wrexham, Berkshire is in debt, and so today Lansley announced that he will lend the trust

"to enable them to turn around their financial position while maintaining a high standard of patient care."

Just in case you thought that this was a bail out (like the banks were bailed out) he added:

"I have been clear that this is not a bail out - it will need to be repaid in full and is conditional on the Trust demonstrating that they will meet their ongoing commitments in terms of quality and financial stability."

So there you have it, yet more doublespeak from Commissar Lansley, just because he says that it is not a bail out (which it is) then that means it is not a bail out (but it is).

Actually, I am rather happy that Lansley has done this, because the next time a hospital needs a bail out and he tries to refuse we can always point him to the Heatherwood and Wexham Park Hospitals precedent.

UPDATE:

Roy Lilley adds the details. His entire post is worth a read, but start at the second piece "Trust gets massive bail-out". Lilley points out that out of a budget of £214m it needs to save £46m. Why is this the case? Lilley says: "The problem is simple to diagnose; there is just not enough money in the local health economy". The issue is that there are other hospitals in the region (too many?) and that there is not enough money to go around. No-one likes their local hospital closing, and a responsible Health secretary would get together all the stakeholders in the area to come up with a credible plan. Then start a wide public consultation to get the public's point of view and respond to it. Instead we have a Health secretary obsessed with the market. The bail-out is £18m over ten years and Lilley comments:

"Lansley is oiling a slippery slope with money he doesn't have.  The sad story of this hospital is not untypical.  There will be many more like it and they won't all have an ex-employee who is an MP, with mates in government, to help bail them out."

Last night (23 Sept) I attended a public meeting where several GPs said that the white paper was designed to fail. That is, NHS hospitals will be starved of staff and when they fail - as they inevitably will - the Health Secretary will say that the NHS is not fit for purpose and will invite in the private sector.