Magazine article Public Finance

NHS Trusts Await Decision on Threatened Capital Charge Rise

Magazine article Public Finance

NHS Trusts Await Decision on Threatened Capital Charge Rise

Article excerpt

NHS trusts are still waiting to hear if they will be hit by an increase of up to £280m in annual capital charges under next April's changes in accountancy rules.

The potential charge increase stems from changes to the way assets bought through the Private Finance Initiative are accounted for. At present just five NHS PFI deals - with a capital value of £243m appear on trust balance sheets. A further 80 signed deals - worth £8bn - are expected to move on when International Financial Reporting Standards come into effect across the public sector in April 2008.

That will make them liable for the 3.5% capital charge levied by the Treasury on the capital value of central government and NHS assets. Andrew Lloyd-Kendall, policy manager at the NHS Confederation, told Public Finance: 'Some kind of financial support will have to be inevitable, because for an individual hospital trust it could be a problem.'

He said that the Department of Health and the Treasury were in talks with the Financial Reporting Advisory Board to develop a solution - either to waive the charge or to provide compensatory support But with most trusts already well into financial planning for 2008/09 and beyond, he said time was running out

'We need to know by Christmas at the latest what the new system will be. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.