20.01.16
DH could accept NHS land sale receipts to write off trust debt
The Department of Health is looking into writing off the debt trusts have amassed by accepting land disposal receipts in place of money, according to its director general of finance, David Williams.
Speaking to MPs at the Commons Public Accounts Committee (PAC) this week, Williams said the department is assessing whether it should make PDC (public dividend capital) or conventional loans to trusts in the red.
“We’ll look at their capacity to generate capital themselves through asset disposals,” he said. “Looking at the Spending Review settlement for this Parliament, we’re looking to generate around £2bn of capital receipts across the period through estate disposals – partly to free up money for investment in transformation, and partly to play our part in supporting that public sector land sales for homes target as part of the wider government initiative.
“One of the issues that we are currently looking at as part of an expenses regime is whether trusts [that] owe me money, as it were, through loans, whether I might be willing to take land disposal receipts in return for reducing the level of loan or debt they have.”
Conservative MP Stewart Jackson backed this possibility, saying that he “is not a localist” but thinks the department “needs to crack the whip centrally because you have responsibility for the cumulative deficit and the efficiency of the NHS”.
According to Jackson, the NHS is the second largest departmental landowner in the UK, just after the Ministry of Defence, and can therefore play a major part in helping the government’s strategy to deliver 200,000 starter homes until 2020.
NHS Improvement boss Jim Mackey, also present at the inquiry, said: “The NHS estate is huge. There’s huge variation in its utilisation, there’s huge variation in its value, there’s huge variation in its ability to be used for other things.
“It’s a big part of the Carter Programme, it’s a big part of the transformation fund assurance process, and it’s a big part of our efforts between NHS Improvement and the department and NHS England to make sure we get a proper grip of that.”
Questioned on the current NHS deficit that is driving trusts into requiring loans, Dame Una O’Brien, the department’s permanent secretary, said she expected it to stay within £1.8bn this year.
Both her, Mackey and NHS England chief Simon Stevens agreed that the major driver behind trust-level deficits was the soaring cost of agency, even despite the government’s recently capped rates.