Basingstoke Rule

Last week I attended a meeting with the finance director of my local hospital. The meeting was called to outline the effects of the NHS white paper. It was frightening. As he went through the slides he pointed out substantial parts of the plans that will not work. Remember, this is a white paper, and essentially the first draft of the legislation, it is not a discussion paper. Lansley has said that the white paper will be implemented and that there is no alternative.

One of the points the Finance Director made concerned the debts of PCTs. He said that the GPs were relying upon the "Basingstoke Rule", and he explain thus: Andrew Lansley was on one of his tours touting his white paper to GPs, and in Basingstoke he was asked if GPs would have to take over the debts of PCTs. This issue is a frightening prospect for GPs because they run businesses, and as such they have to make sure that they at least break even. It is usual for businesses to owe money on an asset that they use (like premises, or equipment), but PCT debts are not for assets the GPs will own. (One could argue that some of PCT debt is created by GPs over prescribing or referring patients when they shouldn't.) Lansley's response to the Basingstoke GPs was that they would not inherit the PCT debts.

This is significant because some PCTs have huge debts. There is a lot of PFI debt, there are liabilities like leases on property and some PCTs have hidden debts where they have borrowed from other PCTs. Lansley's Basingstoke Rule means that GPs will not take on this debt. This does raise a question of where the money will come, but this is just one of a plethora of important questions that Lansley seems not to be able to answer.

Pulse gives some more details about this:

[Lansley] made clear the Government would not write off debts racked up by PCTs in their remaining two and a half years, and urged GPs to work closely with trusts during the transition period to ensure they don’t start off with huge financial millstones around their necks.

So clearly Lansley's Basingstoke Rule is that the debts PCTs generated until the government changed would be written off, but any debts that PCTs generate under his watch would be the liability of the GP consortia. This is quite clever since it means that GPs will have to get involved immediately in the process of taking over commissioning so that they can limit their future liability.

It means that commissioning that happen now is effectively the responsibility of GPs even though the actual commissioning consortia have not been created. After all, if PCTs are cutting patients' treatments now to protect GPs from a debt in two and a half years time, the PCTs are doing this for the benefit of the GPs and hence the GPs should take the responsibility for this.