Hospital bosses plan to borrow £9.2m from Blackpool Council – using its new car park as security.
The loan, from the council’s £100m Business Loans Fund, could be agreed by councillors on Monday, and would allow the hospital to invest in a range of new equipment, including new heart lung machines, ultrasound machines, improvements to the women’s and children’s block and some ‘major new technology’.
It would be paid back over a 10-year period at a ‘low interest rate’ that has yet to be agreed, but is expected to be around 1.6 to 1.7 per cent.
Council leader Simon Blackburn said: “This extra funding will allow the hospital trust to renegotiate their finances to make themselves more resilient against the challenges that the NHS will inevitably face in the future.
“This is also a real investment in our local NHS services that will hopefully help them continue to provide quality care for Fylde coast residents.”
Tim Bennett, director of finance and deputy chief executive at the hospital trust, added: “We have to ensure we invest in services to ensure we are at the forefront of care.
“This investment can be costly and given the financial challenges facing the NHS we have to look at innovative ways to fund those investments.
“The agreement we have reached with the council allows us to do just that and offers real value for money allowing us to invest directly in patient care.”
But Coun David Owen, chairman of the 38 Degrees Blackpool, Fylde and Wyre NHS Support Group, said: “It’s a matter of the council helping out a friend in desperate need, but it begs the question: “Why is it necessary for a health service to go cap in hand to the local authority when it should be funded from the Exchequer’s purse?’
“It’s just another example of how the NHS is grossly underfunded.”
And opposition leader Tony Williams questioned the council’s motive. Its loan proposal comes just over two years after councillors previously rejected an approach from the trust for a £10m loan.
He said: “Don’t forget the leader of the council has already confirmed they make money out their investments.
“So will they be trouser-ing a nice bonus on the back of future patients from this deal? If so, this isn’t an act of welfare concern by this council it’s an opportunity to make money out of the health service.”
The hospital trust yesterday confirmed it remains on target to break even and to receive a £10m pot of government funding it has already budgeted for this year.
Seventy per cent of that is reliant on breaking even, while the rest is split between meeting A&E, referral, and cancer treatment times.
But its bank balance has dwindled in recent years, from £27.4m in 2013 to a previously expected £200,000 at the end of this month, following funding cuts. Its car park opened in 2014 and cost £11m.
Charges increased last year to help repay the money owed on it.