To ask the Secretary of State for Health what criteria were applied to assess the eligibility of the Royal Wolverhampton and University Hospitals Coventry and Warwickshire NHS trusts for the writing-off of their historic debt; for what reasons the Worcestershire Acute Hospitals NHS Trust has had its historic debt written off; and if he will make a statement. (179562)

In 2006-07, the Department introduced a more transparent rules based financial regime. As part of this new regime, the Department considered the cash needs of each national health service (NHS) trust.

Worcestershire Acute Hospitals NHS Trust was able to demonstrate the ability to pay back its loan, and therefore the Department granted the loan. However, two trusts within the West Midlands Region (the Royal Wolverhampton NHS Trust, the University Hospitals of Coventry and Warwickshire NHS Trust), were not given a loan because they could not afford to meet the repayments.

These two trusts were classified as being ‘financially challenged’ and departmental officials have worked in partnership with the West Midlands strategic health authority (SHA) on a review process to identify long-term financial solutions for them. In January 2008, bespoke solutions to ensure these trusts are able to regain financial balance were proposed. The solutions do not involve the Department writing off any historic deficits, but they do contain an element of financial support that is to be provided by the local SHA.