NHS in talks with Hedge Funds.

It seems that the NHS is in talks with hedge funds about the possibility of borrowing up to £10 billion for repairs to hospitals and to help fund GP care. The Times newspaper reported that health chiefs believe that low interest rates present a golden opportunity to raise money for infrastructure in this way and that health officials have reached the outline of an agreement with some hedge funds and other investment companies. However Treasury approval would be needed before any deals could be signed and finalised. Jim Mackey, chief executive of NHS Improvement has met with Treasury officials urging them to sign off on a round of private borrowing which would create a central NHS infrastructure fund which could be accessed by local services.

Billions of pounds are required for the buildings, IT systems and equipment needed to meet the challenges of providing tests and specialist care at GP surgeries, rapid response teams to keep elderly people out of hospital and faster and better treatment for cancer and mental illness.

There is also a £5 billion maintenance backlog which needs to be cleared after years of covering hospital overspending by raiding repair budgets. Mr Mackey said “ we have to be realistic because we are not going to get a £10 billion cheque to pay for all the transformation underway and the massive maintenance backlog, so we need to think long and hard about another way “ He added “ 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 “

The NHS could expect to receive interest rates similar to the 1.1 per cent available to the government for ten year loans. There is a certain amount of Treasury scepticism about NHS financial acumen as well as concerns about how the borrowing would be shown on government balance sheets, which would need to be overcome.

There does seem to be some acceptance for the need for some private money after an official review concluded that the NHS infrastructure budget was insufficient by £10 billion although land sales and public money is expected to provide some of it.

The head of the British Medical Association, Mark Porter said that “ this move shows how desperately the health service needs more funding. The government must take heed.”