MORE than £700m worth of hospital debt has been written off in Lancashire, with the county accounting for just under half of the total amount cancelled by the government in the North West.

The area is the biggest beneficiary of the write-off in cash terms, in spite of being home to just five out of the 18 NHS trusts across the wider region.

Lancashire trusts also account for two out of the top three largest revenue and capital debt cancellations in the North West.

University Hospitals of Morecambe Bay NHS Foundation Trust – which runs the Royal Lancaster Infirmary – tops the list and will see £290m of historic debt dropped.

Lancashire Teaching Hospitals NHS Foundation Trust – which operates the Royal Preston and Chorley and South Ribble Hospital – will have £215m of loans cancelled. East Lancashire Hospitals Trust, by comparison, had just £7.75m written off.

The Department of Health has published the figures after the announcement last week that £13.2bn of debt was being written off across the country.

However, an NHS source in Lancashire told the Local Democracy Reporting Service that trusts are still digesting the implications of the measures and warned the welcome would be a “cautious” one, as some still face the likelihood of overspending their existing budgets.

Under the write-off, historical government loans will be converted to equity in the form of “public dividend capital”.   That basically amounts to government investment in the assets of NHS trusts for which, in normal circumstances, a rate of return would be expected. The Department of Health has assured trusts adjustments will be made to ensure that providers’ ongoing surplus or deficit positions are not negatively affected by the debt write-off.

The debt cancellation was widely interpreted as being in response to the coronavirus outbreak, but the Health Service Journal reported last week that it had been under discussion prior to the pandemic.

The department has also pledged a simpler “internal payments” system to ensure that trusts  receive “all the necessary funding to carry out their emergency response, despite many hospitals cancelling or limiting their usual services such as elective surgery or walk-in clinics due to the virus”.


University Hospitals of Morecambe Bay NHS Foundation Trust


Lancashire Teaching Hospitals NHS Foundation Trust


Southport and Ormskirk Hospital NHS Trust


Blackpool Teaching Hospitals NHS Foundation Trust


East Lancashire Hospitals NHS Trust