Repossession: Your hospital at risk under Tory plans

David Cameron says he cares about the NHS, but the danger is in the detail.

Under secret Tory plans for the NHS, your hospital would be encouraged to take out huge bank loans, and could then go bust if it doesn’t keep up its debt repayments.

Even the Tories say that this “will entail risks to the assets necessary for the provision of essential NHS services”.

David Cameron says that his plans are about giving hospitals “autonomy and accountability”. But what he doesn’t tell people is that, in practice, he believes he can pay for the NHS by encouraging hospitals to borrow money on commercial terms.

At the same time as claiming that he wants to tackle public sector debt, David Cameron wants to abolish the "prudential borrowing code" that currently exists to ensure responsible financial management by NHS Foundation Trusts. The Conservatives have published draft legislation which would allow the NHS to take on unlimited debt – secured against NHS assets such as land, hospital buildings and medical equipment. At the same time, they would prevent the Treasury from stepping in to protect services in the event of financial failure – meaning that all of these assets could be lost to the private sector.

Alan Johnson, Labour’s Health Secretary, said:

“David Cameron’s plan to let hospitals borrow from commercial lenders, secured against their own assets, puts essential NHS services at risk of repossession.

“The Tories talk tough on controlling debt, but their own plans would risk unleashing billions of pounds of uncontrolled debt into the heart of our NHS, with nobody to step in if hospitals went bust.

“We saw only last week that if you scratch beneath the surface, David Cameron’s party still contains people who think the NHS is a ‘mistake’. Now we can see that for all his reassuring talk about the NHS, under a Cameron government your hospital would be used as collateral for raising unlimited debt.”