Massive hospital debt wiped

IPSWICH Hospital is today a whopping £20million better off after the government wiped a black hole of debt.Bosses at the Heath Road site have spoken of their relief after a controversial finance system which effectively punishes health trusts twice for overspending was scrapped.

IPSWICH Hospital is today a whopping £20million better off after the government wiped a black hole of debt.

Bosses at the Heath Road site have spoken of their relief after a controversial finance system which effectively punishes health trusts twice for overspending was scrapped.

It means historic debt at the hospital has been reduced from around £38m to around £18m.

Mike Brooks, hospital chairman, said: “There is no question the whole team at the hospital has been under pressure, frustration, worry and doubt about the future of the hospital.

“Now we are in a better position to take control of our own destiny and continue to build on the clinical excellence the hospital is renowned for.”

Before the government announcement, hospitals and other NHS trusts were penalised with a so-called double whammy punishment when they fell into debt.

Most Read

They were forced not only to pay back the debt, but also have money deducted from the following year's budget.

The system, under the Treasury's resources accounting and budgeting (RAB) rules, has been in place for seven years.

The Evening Star revealed on Wednesday that Ipswich Hospital's finances have broken even for the fourth consecutive month.

It is the first time in several years the hospital has been making more money than it has been spending.

Andrew Reed, the hospital's chief executive, said: “RAB has been a difficult issue to deal with as suddenly we found ourselves talking about deficits which looked like telephone numbers.

“In fact, we have never got to the point of addressing that debt because the first responsibility has been to turn in-month deficits into in-month surpluses.

“We haven't had the opportunity to deal with the £38m debt and my own view is the government decision simplifies the understanding of our situation, it doesn't solve it.”

A spokesman for the East of England Strategic Health Authority said it now expects the region's NHS to be clear of debts by this time next year.

N Was the government right to scrap the RAB system? Write to Your Letters, Evening Star, 30 Lower Brook Street, Ipswich, IP4 1AN, or e-mail eveningstarletters@eveningstar.co.uk

Become a Supporter

This newspaper has been a central part of community life for many years. Our industry faces testing times, which is why we're asking for your support. Every contribution will help us continue to produce local journalism that makes a measurable difference to our community.

Become a Supporter