Royal Stoke has £196m debt wiped out as coronavirus decimates services

Almost £200 million of debt has been wiped out at Staffordshire's two main hospitals - as the NHS battles against the coronavirus pandemic.

The financial millstone has been removed after the Department of Health agreed to scrap historic debts totalling £13.4 billion across more than 107 hospitals.

It means debts totalling £196,093,000 will no longer have to be paid back by the NHS trust which runs the Royal Stoke University Hospital and Stafford's County Hospital.

And Royal Stoke bosses can now stop paying the multi-million pound interest charges on that debt.

Now health campaigners hope extra doctors and nurses can be recruited to support under-pressure Royal Stoke staff.

North Staffordshire Healthwatch leader Ian Syme said: "University Hospitals of North Midlands (UHNM) NHS Trust was never going to pay this £196 million back. But the problem was the interest - and that was an issue.

"They had to pay off the interest, which amounted to around £7 million. They had to cut staff to plan against this so now hopefully they will be able to recruit more nurses.

"It is good news but it is not before time. The acute care sector needs to be debt free to plan after COVID-19. The sector needs to start with a clean slate."

Jonathan said, "Whilst this is a fantastic step taken, I am dissapointed it does not include PFI,  however, it will allow larger cash flow to be directed into other assets."

UHNM has welcomed the Government announcement.

Chief financial officer Mark Oldham said: “The new NHS debt regime will convert legacy debt for University Hospitals of North Midlands NHS Trust into public dividend capital, which means we will not need to pay back historical debt.

"It is positive news and provides the trust with more certainty going forward in order to respond to the health needs of the population.”

The debt removal is part of a package of NHS reforms.

Health Secretary Matt Hancock said: "As we tackle this crisis, nobody in our health service should be distracted by their hospital’s past finances. This £13.4 billion debt write-off will wipe the slate clean and allow NHS hospitals to plan for the future and invest in vital services."