Health trusts ‘facing spiralling debts’ even if deficits wiped out

Health Secretary Andrew Lansley has moved to allay fears that new organisations which will be brought in from April next year will inherit multi-million pound debts accrued during the current NHS regime.

But one of Yorkshire’s MPs, Hugh Bayley, has maintained that the new structure will be unable to cope with the burden of bureaucracy and long-running financial problems will only escalate further.

The Labour MP for York Central quizzed Mr Lansley in a House of Commons debate about what the future holds for health services in his constituency and throughout North Yorkshire.

The county has been an area of particular concern after the primary care trust (PCT), NHS North Yorkshire and York, is facing at least a £19m financial black hole by the end of this financial year.

Mr Bayley said: “Even if we start with zero debt under the new regime, the deficits will begin to accumulate again unless we solve the underlying problems.

“North Yorkshire has had these problems for many years now, but they have not been resolved. There is a very real danger that debts will spiral out of control, and patients will end up unable to access the treatment they require.”

Since North Yorkshire’s PCT was set up in October 2006, NHS services in the county have relied on bail-outs totalling more than £100m from the region’s health authority.

But NHS North Yorkshire and York confirmed the authority’s demise means the end of the financial lifeline. The PCT will itself be disbanded with GP-led clinical commissioning groups (CCGs) taking over from April. It had been anticipated that the groups will inherit a large proportion of the PCT’s debts.

But during the Commons debate, Mr Lansley maintained the Department of Health and the NHS Commissioning Board intend the new CCGs across England to start with “clean balance sheets” and “without legacy debt”.

He said: “That will give them the best possible chance of delivering the best possible care.”

NHS North Yorkshire and York’s chief executive, Christopher Long, has already admitted the organisation will need a “dose of good luck” to ensure its £19m deficit does not grow. He also confirmed savings of £22.5m its £1.25bn budget were needed.

Health chiefs are drawing up a turnaround plan to deliver safe, sustainable and affordable services leading to a shift from hospital care to provide more services in the community. But the chairman of North Yorkshire County Council’s scrutiny of health committee, Coun Jim Clark, a retired chartered accountant, warned the deficit could be as high as £50m by March 31 next year.

However, the Department of Health yesterday attempted to paint a far more positive picture nationally after claiming the NHS is in “robust financial health”.

It announced that government spending on running hospitals, hiring doctors and treating patients has increased by £3.4bn in a year. The Department of Health claimed the NHS saved £1.5bn between 2011 and 2012 by cutting the number of managers and reducing expenditure on IT projects. A spokesman said that £400m was cut on “wasteful” IT projects within the health service.

The positive spin on the NHS crisis came after experts had warned earlier this week that hospital are showing signs of increasing financial strain.

The National Audit Office had claimed there is a widening gap between the strongest and weakest NHS trusts, with growing numbers needing extra help to balance their books.

In a report, it revealed the Department of Health had to give emergency funds to four NHS foundation trusts and 17 NHS trusts between 2006 and 2012.

The report also showed that 34 trusts, including three primary care trusts, 10 NHS trusts and 21 NHS foundation trusts, reported a deficit in 2011 and 2012.

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