NHS wants to pay for general practice 'transformation' via private finance
The NHS is looking to borrow money from private financiers to pay for local plans to boost GP and primary care services and reduce pressure on hospitals.
NHS Improvement, which said it is already in talks with private sector financiers, wants to set up an infrastructure pot funded by loans from investors including hedge funds.
Chief executive Jim Mackey said that current low interest rates in the private market was a 'golden opportunity' which the NHS otherwise risks missing out on.
Mr Mackey said that ‘realistically’ the health service cannot expect the funding it needs from Government and called for radical new ways of raising capital which could help fund services in the long term.
Mr Mackey has to make his case to the Treasury, as strict rules impedes NHS organisations from such borrowing. But he said the proposition could provide ‘realistic funding for local plans to improve local health services and to join up local NHS organisations’.
This is in reference to the 44 Sustainability and Transformation Plan (STP) areas of England which have all set out how to to move care into the community where it is expected to be delivered more cheaply and at greater convenience to patients.
Some £325m was pledged by chancellor Philip Hammond to support STPs in the last budget but a Department of Health-commissioned review has estimated £10bn is needed to fund STPs, with £5bn required to pay for the ‘backlog’ of routine maintenance work.
The Naylor review also said primary care premises payments should be linked to the ‘the quality of facilities’ and their ability to deliver the NHS’s objectives around working at scale and access.
NHS Improvement said the health service has already held talks ‘with private sector financiers keen to loan money to the NHS’ as it looks to improve facilities.
Mr Mackey said: ‘We have to be realistic because we are not going to get a £10bn cheque to pay for all the transformation underway and the massive maintenance backlog, so we need to think long and hard about another way of doing things.
‘Historically low interest rates are a golden opportunity for the NHS but we are constrained by rigid rules around borrowing that prevent us from taking action.
‘An NHS Fund could power the improvement needed to sort out problems at our hospitals and to drive the change required to get the NHS ready for future challenges. If we are open to new ideas then we could really be in business.’
Other areas that NHS Improvement said could benefit from a private infrastructure fund included building extra capacity in hospitals to boost A&E performance; and upgrading hospital facilities and equipment. It also suggested the fund could 'provide managers with more stability on expected investment'.
But the BMA's deputy chair Dr David Wrigley, who co-authored a book on NHS privatisation, said the news was 'shocking' an the Government should be taking advantage of low interest rates directly.
He told Pulse: 'It is shocking to see NHS managers having to go cap in hand to City-based, profit hungry, hedge funds in order to shore up the inadequate NHS budget. This is PFI mark 2 and will leave taxpayers handing over huge sums of money to hedge funds for years to come – money lost to patient care.
'Interest rates are low and it begs the question why the Government is not taking advantage of the low rates to fund the NHS properly. One could conclude they are not doing this in order to run down the NHS further and allow more private companies to move in and take over profitable NHS services.
'How the Government can continue to say "we are not privatising the NHS" beggars belief.'