Cornwall demands rethink after legal rules block £8m health loan

Cornwall Council and the local health community plan to lobby the
government to change the regulations on “innovative” funding after
their own ground-breaking loan proposal collapsed last week.

The council wanted to use new financial freedoms gained by
performing well under the comprehensive performance assessment to
lend £8m to the Cornwall and Isles of Scilly health community,
made up of three primary care trusts and two NHS trusts, which has
debts of £31m.

The council and the health community said: “All organisations felt
it was in line with government expectations to come up with
innovative ways of improving public services and working in
partnership.”

The freedoms and flexibilities given to three-star “excellent”
rated councils allow them more control over spending. In addition,
they benefit from the removal of ring-fencing and do not have to
submit as many plans to the government.

But the legal rules governing PCTs have prevented the council from
lending the £8m, which was due to be approved this week.

Peter Davies, chairperson of the Central Cornwall PCT, said the
outcome was “disappointing” and called for the issue to be
considered “at national level”.

Council leader John Lobb added: “Excellent councils such as
Cornwall have been granted greater freedom to work in partnership
with other public bodies. We could have used some of the council’s
financial reserves to support the Cornish health community through
a difficult period.”

The money, which would have been paid out over two years, was due
to come from reserves and could have supported health programmes
and schemes.

The health community and the council have now formed a strategic
partnership group, which brings together members and senior
officers of all the organisations, to try to find new ways of
working.