Health trusts in the Midlands have been told to deposit #187 million into a central NHS Bank to help bail out debt-hit counterparts in the region.
The "one-off" plan for primary care trusts has been designed to ensure NHS organisations balance their books by March 2007. Midland hospitals and health care trusts have already run up deficits totalling #85.8 million.
It was denounced by critics as 'robbing Peter to pay Paul' and some of the trusts admitted they would have to delay improvement programmes because of the measure.
Details of the initiative are contained in a letter to local MPs from David Nicholson, chief executive of the Birmingham and Black Country, Shropshire and Staffordshire, and West Midlands South Strategic Health Authorities.
The policy, part of a national programme, involves all PCTs in England and Wales making deposits of, on average, 2.6 per cent of their 2006/07 budget allocation to the bank, on which they will receive interest.
Those in deficit will be able to take out loans to meet debts incurred during the 2005/06 financial year. The loans will be repayable over "a limited number of years" and any money left in the account after April 2007 will be reinvested in local NHS schemes.
Birmingham MP John Hemming MP (Lib Dem Yardley) described it as "rob-bing a well-managed Peter to pay a poorly-managed Paul".
He said: "We always knew they were going to take off the PCTs - at one point it was going to be up to five per cent, so 2.6 per cent is better than we thought.
"However there will be difficulties across the region now, which will involve some very difficult decisions on where in the budget that money comes from."
A Birmingham and Black Country SHA spokeswoman said: "We've been talking to PCT chief executives about this since late January, as the idea is to have a sustainable way forward beyond March 2007, when hopefully all the trusts will have achieved financial balance.
"Obviously this money has to come from somewhere in the PCTs' budgets, and investing 2.6 per cent of their 06/07 allocation may mean delaying some planned developments. We hope there may be some money left by March 2007, which will be used to fund further transformational changes around the regions.
"But this is a one-off deal, this is not a rolling arrangement so PCTs will not be expected to make any more deposits for 2007/08 or beyond."
Chris Bradshaw, director of finance for Sandwell PCTs, which will contribute #12.6 million into the bank, said there would not be a deterioration in patient care although plans for new service developments this year would be reduced.
"The money will be repaid with interest, and we fully expect growth to be back to normal next year, when new developments will resume," he said.
David Moon, Solihull PCT's finance director, said: "It isn't ideal as it will delay developments that we had planned for this year"
Jon Crockett, chief executive of Wolverhampton City PCT, said some of their planned developments would be deferred until 2007/ 08.
"It is in the interest of patients that the deficit is dealt with once and for all," he said.
