Northumberland County Council loan to hospitals being finalised

A Northumberland County Council loan loan to hospitals which could exceed £100m is being finalised

Northumberland County Council offices
Northumberland County Council offices

Councillors and hospital chiefs are close to finalising a loan of at least £100m.

The Journal has previously reported how Northumbria Healthcare NHS Foundation Trust had asked Northumberland County Council for a loan of £100m to allow it to buy its way out of costly private finance contracts.

The PFI debts relate to work on Hexham Hospital and the second phase of Ashington’s Wansbeck General.

The projects have a total capital value of almost £72m, but the trust has to pay PFI debts of £324m between 2002 and 2033.

The 25-year loan was agreed in principle by the council, as it would help prevent potential cost-cutting reductions in hospital and community services across Northumberland.

County councillors were then told that the requested loan had increased from £100m to £120m.

A report seeking councillors’ agreement for the proposed loan was discussed in private at a full meeting of the authority yesterday.

Afterwards, the council issued a joint statement with the healthcare trust.

It said: “Following today’s meeting we are continuing to work through the necessary final processes with all regulatory partners in order to bring the potential loan agreement to fruition.

“We will update all stakeholders as soon as we are able to announce the final decision.”

Meanwhile, councillors at yesterday’s meeting agreed to accept in full the recommendations of an independent remuneration panel on members’ allowances.

In June, the Labour-run council asked the panel to look at all allowances paid to members.

The panel made a series of recommendations, including that the basic members’ allowance remain at £12,624 a year.

Councillors had been urged to reduce that figure before the meeting by Haltwhistle resident Kevin Little, who pointed to their need to make £42m of savings this year and the example of Newcastle City Council which cut its figure by 5% earlier this year while facing similar budget cuts.

However, members yesterday followed the panel’s advice to freeze the figure and agreed all its other recommendations.

The decisions were taken after Conservative opponents had been defeated in a bid to have the number of policy board posts and the role of business chairman reviewed as part of the council’s budget setting.

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