§ Angela SmithTo ask the Secretary of State for Health if he plans to change the debt structure of NHS trusts; and if he will make a statement. [55194]
§ Mr. MilburnThe New NHS White Paper made clear the Government's intention to abolish the internal market in the National Health Service and amend the NHS trust financial regime to make it more transparent and more suitable for a public service based partnership. As part of our programme to achieve this aim, we are changing the 781W debt structure of NHS trusts. We have already taken steps to stop issuing long-term interest-bearing loans to NHS trusts to finance their capital expenditure. Instead, we are issuing Public Dividend Capital (PDC). The NHS Executive will now be making arrangements to replace existing interest-bearing debt with PDC without the application of premiums or discounts because the Exchequer funds NHS trusts' normal debt servicing costs. This will supersede the present, market driven financial structure, reduce bureaucracy and provide a simpler, clearer and more understandable arrangements, in tune with NHS trusts' status as part of the public sector.