A local authority is planning to lend £8m to its local NHS organisations, using new financial flexibilities in the first move of its kind. Cornwall county council, a top-performing authority, aims to make the loan to bail out community health services that face drastic cuts.
The cash would be used by primary care trusts and other Cornish health agencies to maintain and develop services, including mental health, care of older people and screening and diagnostic work. The proposals, which go before the council's cabinet today, follow a plea for help from the health bodies.
A paper to the cabinet says the NHS agencies inherited debts of £31m, which, under accounting rules, have to be made good by next March. Informal talks have been held on the idea of loaning money from council reserves currently invested in money markets.
"There can be no doubt that if the county council cannot assist, the consequences will be serious for services for some people who are in need of healthcare in Cornwall," the paper says. "It is an enormous opportunity for the county council to fulfil its community leadership role while providing timely assistance to a key strategic partner.
"Should the proposal be taken forward, the council and our health service will receive local and national recognition and be seen as an exemplar of partnership working."
The council has a budget of £438m and long-term debts of £209m. However, the loan would be spread over just two years and paid back with interest, calculated on what the £8m would otherwise have made if invested.
Nigel Druce, Cornwall's director of social services, says that while county councils have powers to provide help for certain NHS functions from existing budgets and reserves, Cornwall has greater freedoms by virtue of its "excellent" rating under the comprehensive performance assessment. Talks have been held with the Department of Health and the Office of the Deputy Prime Minister - both of which support the scheme - and approval would be sought from the district auditor.
"Alan Milburn [the former health secretary] said earlier this year there should be far more interplay between health and social services, and this allows us to explore that," says Druce.
"At the same time, it will stop bed-blocking and help us all. This will not cost the taxpayer anything. It is simply a loan. It is a win for the health service, a win for us, and a win for the county. It is much better for the money to be invested in Cornwall, where it is doing good for the community, than in a Shanghai bank."
The proposals are backed by the South West Peninsula strategic health authority. Anthony Farnsworth, its director of strategic partnership, says that without the loan there would be "delays to the modernisation" of health services in the county.
"The two largest public sector organisations in the county have aligned their goals and want to do what is best for the population," Farnsworth says. "They are proposing to work together within the existing statutory framework. I think it is very positive."
