National News Anyone notice the NHS boost?

Essexyellows

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In amongst Matt Hancocks speech yesterday evening he wrote off £13.4 billion of historical NHS debt.
Now some will say "How?" others will say "Where is the Magic Money Forest?".

However the reality of what he did is much different. So in a very small scale here is how it happens........
An NHS Trust gets paid by activity and measures and a big pot from the Government.
In our labs at our Trust we do lots of tests, roughly 25 million a year.

Lets take Test "A". It costs us £6 to do it. We receive a mix of activity (volume) payments and a fixed price that totals £5.20.
The mathematicians among you will say "That is a loss of 80p per test"
The business people will say "Stop doing it or reduce the cost price"
Trouble is many of our costs are fixed and you can`t "stop" or folk die and nobody likes that.
Now some tests we make a surplus on but with excess demand, an increasingly poorly population etc etc, there are more negative figures than positive.

And that is why he could wipe the slate clean, re-set the spreadsheets and "start again" its just a trading balance on paper. It is also why the NHS will happily consume the entire GDP if allowed too. :)
 
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Gary Baldi

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I did, and I can't be the only hoping that those awful PFI deals would get the same treatment!

How much is it context of the overall NHS budget?
 

Briggsy

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Yes, that seemed to me to be quite a major announcement, but it doesn't seem to have merited much in the way of reporting. I found only one short paragraph in the Guardian, perhaps unsurprisingly.
 

Marked Ox

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In amongst Matt Hancocks speech yesterday evening he wrote off £13.4 billion of historical NHS debt.
Now some will say "How?" others will say "Where is the Magic Money Forest?".

However the reality of what he did is much different. So in a very small scale here is how it happens........
An NHS Trust gets paid by activity and measures and a big pot from the Government.
In our labs at our Trust we do lots of tests, roughly 25 million a year.

Lets take Test "A". It costs us £6 to do it. We receive a mix of activity (volume) payments and a fixed price that totals £5.20.
The mathematicians among you will say "That is a loss of 80p per test"
The business people will say "Stop doing it or reduce the cost price"
Truoble is many of our costs are fixed and you can`t "stop" or folk die and nobody likes that.
Now some tests we make a surplus on but with excess demand, an increasingly poorly population etc etc, there are more negative figures than positive.

And that is why he could wipe the slate clean, re-set the spreadsheets and "start again" its just a trading balance on paper. It is also why the NHS will happily consume the entire GDP if allowed too. :)

Already a sunk cost, so doable and has been talked about needing doing for a while. So good stuff. Now to help local Govt which is creaking all over.....
 

Essexyellows

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I did, and I can't be the only hoping that those awful PFI deals would get the same treatment!

How much is it context of the overall NHS budget?

10% give or take.

Ironic that most of our finance exec`s "fell on their swords" late last year after a bit of an accounting gap turned up. It was only 40 odd million and has now been written off.
Best we can off KPMG and all the other "turnaround" experts ....... that`ll save a fortune!
 

Essexyellows

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Already a sunk cost, so doable and has been talked about needing doing for a while. So good stuff. Now to help local Govt which is creaking all over.....

Same thing really, it is purely "paper" debt ................. the question is how far will this "Zeroing" exercise reach? What will be the impact on the money in our pockets and the value of anything? Interesting times ahead that is for sure.
 

Sarge

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'writing off' debts owed by hospital Trusts on the face of it appears to be a generous gesture by the Government

But arent Trust hospitals in effect part privatised? ... in which case the 'debts' written off is money owed by Trusts to the National coffers- therefore is/was in reality owed to the taxpayers?
 

Marked Ox

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'writing off' debts owed by hospital Trusts on the face of it appears to be a generous gesture by the Government

But arent Trust hospitals in effect part privatised? ... in which case the 'debts' written off is money owed by Trusts to the National coffers- therefore is/was in reality owed to the taxpayers?

No Trusts aren't privatised.
 

Marked Ox

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Same thing really, it is purely "paper" debt ................. the question is how far will this "Zeroing" exercise reach? What will be the impact on the money in our pockets and the value of anything? Interesting times ahead that is for sure.

No Local Govt can't carry debt, and any annual shortfalls are covered by reserves but these have to be recovered in following years. Local Govt needs direct help with the ongoing budgets but I doubt that will happen.

As an example that more LAs are getting into trouble and not just Northamptonshire CC:


Whilst all aren't at serious risk of going bust, all will be struggling to provide the services required within resources, nevermind the services that aren't a statutory requirement.
 
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Essexyellows

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@Sarge there you go again........... more "shared pish"................ .:rolleyes:

Try this as an example.
Mr Smith comes in for a hip replacement, it all goes to plan and he leaves in 3 days post surgery. We get "paid" £4,000. And make a small "surplus".
Mr Jones comes in for a hip replacement, suffers a life threatening blood clot and needs a week in ITU and is in hospital for a fortnight. We get "paid" £4,000 and a bit of ITU "activity money" which might total £10k. Either way Mr Jones creates a "loss" far in excess of Mr Smiths surplus.

Underfunding would mean we didn`t do either operation and left them to suffer........ the NHS is not underfunded.
It is poorly managed, has no commercial acumen and it ignores the "dripping taps" that cost the money.

And just for @ZeroTheHero it was Labour that started the privatisation of the NHS.......... and in 2018/2019 the proportion of private spend was lower than 2015/16.
 

ZeroTheHero

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And just for @ZeroTheHero it was Labour that started the privatisation of the NHS..........
Yes, and that was a disastrously bad move from Labour - you'll get no argument from me on that score.

That does not change the direction of travel that the Tories were going down before this particular s**t hit the fan. Mind you I cannot see any government in the near or middle future being able to do anything other than support the NHS unequivocally - clouds and linings etc.
 
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