Barts Health’s loan repayments second highest in London
- Credit: Archant
The NHS trust in charge of Newham University Hospital has the biggest financial deficit of all London trusts, it has been revealed.
Barts Health NHS Trust was £38.3million in debt in 2013/14 and has a projected deficit of £93m for 2014/15.
The financial crisis is in part caused by high private finance initative, or PFI, repayments.
This is a long term agreement between public and private sector, where a consortium of investors raises finance to build new infrastructure.
Barts Health currently spends more than 10 per cent of its operating revenue in paying back creditors after the £1.1bn PFI scheme began in 2006, second only to Barking, Havering and Redbridge NHS Trust.
Now Sadiq Khan intends to free up tens of millions of pounds from London’s NHS trusts by buying out the PFI debt should he be elected Mayor of London.
The Labour hopeful is considering plans to renegotiate contracts or buy out the debt to allow trusts to pay back City Hall at a much lower rate.
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The money for the buy-out would be generated through the issuing of bonds.
Mr Khan said: “For far too long, dealing with PFI debt has been put in the ‘too difficult’ box.
“At the moment huge sums of public money are being wasted on high-interest PFI repayments when that money could be better spent on more hospital beds, nurses, doctors and care workers for our city. “By creating Bevan bonds to buy out the PFI debt of London’s hospitals we could put them on a more stable financial footing and free up tens of millions of pounds for them to invest in frontline healthcare.”
A spokeswoman for Barts Health said: “As the biggest NHS Trust in the country, Barts Health is a large and complex healthcare organisation serving almost three million people in east London, including some of the most deprived and diverse communities in Britain.
“The PFI has enabled us to build one of the largest acute hospitals in Europe at The Royal London, and a world-leading specialist heart centre at St Bartholomew’s.
“The annual financing charge on this investment in the most modern medical facilities for patients is 5.2pc of our total turnover.”
The remainder of the PFI payment goes towards service charges which the Trust would need to provide no matter how the hospitals were funded.