NHS trusts eye council borrowing
8 August 2012
NHS Foundation Trusts (FT) may access local authority borrowing as they seek to refinance healthcare PFIs.
The Treasury is set to give advice "shortly" to FT regulator Monitor on a refinancing request from Northumbria's Foundation Trust to borrow £120m from Northumberland County Council, to cover repayments on its PFI debts and upfront costs surrounding contract termination.Monitor’s compliance board committee has deferred its decision, in order to account for advice from Treasury – which, if approved, could see an influx of foundation trusts making similar requests.
Mark Berry of lawyers, Norton Rose said: "I think extending borrowing limits may become a bit of a theme, following it up with cost-cutting."
According to the regulator, Monitor assesses "each case on its own merits according to the risks identified by the local circumstances" and the Treasury needs to evaluate the financial ‘value-for-money’ behind the borrowing extension.
"As the scheme is considered novel, contentious and repercussive under HM Treasury’s Managing Public Money guidance, the Department of Health undertook a public purse VFM analysis of the scheme," said a spokeswoman for the regulator. "We expect to receive HMT advice shortly both on the VFM of the scheme and the extent to which it may be repercussive."
