Fury as city hospitals lose out again with shock rates rise costing Lothians '180 nurses'

HEALTH chiefs have been left furious after being hit with a £5 million tax hike for hospitals across the Lothians.

NHS Lothian is facing up to 2000 job cuts to balance the books. The problem is fuelled by a 70m shortfall in Scottish Government funding, while hopes for Sick Kids funding have been knocked back. But now the board faces a 38 per cent jump in its rates – the equivalent of around 180 full-time nurses.

To add insult to injury, most other health boards across Scotland are only having to cope with a six per cent rise after rates were reassessed nationwide based on the value of property.

A senior NHS source said: "Perhaps the most ludicrous thing is the fact these property valuations are at least two-and-a-half years out of date.

"How much has changed in that time? It is another unfair levy on healthcare in Edinburgh based on factors many of us don't agree with."

The NHS will join more than 2,000 firms in the Lothians which are appealing against their new business rates. The new valuations, which came into force at the start of April, were based on estimations made by assessors in 2008 when the property market was vastly different.The tax demand has stoked the fury of health chiefs who already estimate they are short-changed to the tune of 70 million by the Scottish Government, because its funding formula doesn't give enough weight to the rising population of the Lothians. The formula gives more weight to poverty than population, meaning it favours the west coast.

The news also comes after NHS Lothian's hopes of getting funding in place earlier this year for a 48 million brain surgery unit at the Sick Kids were dashed by the Scottish Government.

Independent Lothians MSP Margo MacDonald said: "I admit I'm astonished at the 38 per cent figure and certainly the Scottish Government will want a very full explanation of how this should have come about.

"NHS Lothian's financial affairs appear to be completely out of kilter and in all fairness the blame can't be laid at the door of the directors of the health board. I've been nibbling away at successive health ministers for the whole decade plus of the Scottish Parliament's existence because I thought and still do think that Lothian has a straightforward case for having a greater allocation of financial resources from the Scottish health services."

NHS Lothian's director of finance Susan Goldsmith said: "The rise in rates is about 38 per cent which is a huge increase amounting to 5 million across the whole system."

The business rates valuations are worked out by the Lothian Valuation Joint Board, which works to formulas set by the Scottish Government.

A spokeswoman said: "Hospitals are valued by reference to the cost of construction. This is the recognised method of valuation for this type of subject because there are no open market rents in Scotland to allow a rental analysis to be carried out.

"Construction costs increased significantly in the five year period from 2003 to 2008 hence the large increases."