Scottish Government to write off £150m of debt owed by NHS

The Scottish Government is to write off around £150 million of debt owed by NHS boards.
Stock image of an NHS ward. Picture: TSPLStock image of an NHS ward. Picture: TSPL
Stock image of an NHS ward. Picture: TSPL

The move announced by Health Secretary Jeane Freeman is part of a new medium-term financial framework drawn up by ministers to help deliver health and social care reforms.

Several boards have received loans from the Government - known as brokerage - in recent years to fill funding gaps.

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Ms Freeman said ministers would not seek to recoup the money given to territorial boards over the past five years, enabling them to start with a "clean slate" from 2019/20.

Under the new framework, boards will be required to break even over a three-year period, rather than annually.

In each year they will also be offered the flexibility to over or under-spend by up to 1% of their budgets.

READ MORE: NHS boards facing £22m bailout as they struggle to make cuts"In return for their efforts to deliver the reforms for the future, I am facilitating a new three-year financial planning and performance framework for our NHS territorial boards," Ms Freeman told MSPs.

"For this new deal to be successful, I believe it needs a new start.

"So to give all our territorial boards clear ground to move forward in that three-year planning cycle, I will not seek to recover NHS territorial boards' outstanding brokerage, the expenditure incurred by territorial boards over the last five years which has been above their budget.

"I want all boards to be able to focus their attention on delivering the measures set out in the health and social care delivery plan and this financial framework, and to do that in a safe and appropriate way."

Ms Freeman said the new framework makes the "perhaps bold assumption" that Scotland will receive a further £3.3 billion of funding for the health service by 2023/24 as a result of increases in spending south of the border.

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However Conservative MSP Miles Briggs said Scottish ministers are "short-changing" the NHS "at a time of record UK Government health funding".

READ MORE: Shona Robison agrees to publish finances of NHS boards monthly 
The Health Secretary said spending in Scotland is 7.2% higher than in the UK as a whole.

Labour's Jenny Marra questioned whether brokerage paid out in this financial year would also be written off.

NHS Tayside has a projected deficit of £18.7 million for 2018/19, she said.

NHS Ayrshire and Arran, NHS Highland and NHS Borders are also expected to require loans to balance their budgets this year.

Ms Freeman said: "All health boards will start with a clean slate from the year 2019/20."