Lending scheme risky for doctors

PUBLISHED: 10:51 02 February 2006 | UPDATED: 11:33 04 May 2010

DOCTORS have been warned to reject a money-lending scheme hatched by the district s health provider for fear that it could be illegal. The idea was devised to allow health chiefs to beat Government penalties for busting their budget. But Cambridgeshire Lo

DOCTORS have been warned to reject a money-lending scheme hatched by the district's health provider for fear that it could be illegal.

The idea was devised to allow health chiefs to beat Government penalties for busting their budget.

But Cambridgeshire Local Medical Committee stepped in with "grave concerns" about the scheme fearing it could lead to doctors breaking the law and risking fines or even jail.

GPs were going to be offered incentives if they allowed their payments from the Primary Care Trust to be delayed or registered as a loan.

The cash would register in the trust's end-of-year accounts giving the impression of a healthy balance and helping the PCT to avoid Government penalties for being overspent.

But the LMC warned GP practices not to take part, claiming that if the Strategic Health Authority of the Department of Health disagreed with the scheme, doctors would not to able to take court action to recover the money.

Members also feared that delaying payments to practices could lead to less money going into doctors' pensions, putting them at a life-long disadvantage.

East Cambridgeshire and Fenland Primary Care Trust came up with the idea as it struggles to balance its books against a predicted £3.2 million overspend.

It is in dispute with Cambridge's Addenbrookes Hospital because it claims it has been overcharged for services, plunging it into the red.

If the Trust fails to break even at the end of the financial year in March it fears the Government will impose penalties, giving it less cash next year and forcing it to cut jobs and services.

But Dr Guy Watkins, chief executive of the Cambridgeshire Local Medical Committee, told GPs in a memo: "We hoped to persuade the PCT privately that this was a bad idea and that the offer would therefore not be put to practices.

"However, regretfully we understand that the PCT has now offered incentives in an attempt to arrange to borrow money from GPs.

"The LMC knows that your rights to payments are enshrined in law and the PCT duty to pay is enshrined in their standing financial instructions. The PCT may try to sell this offer to you as a voluntary deal but the LMC is concerned that pressure may be brought to bear, even if only along the lines of 'help us and...'"

He warned that money-lending is regulated by the Consumer Credit Act which requires most businesses to be registered by the Office of Fair Trading and operating without a licence is a criminal offence punishable by fine or imprisonment.

"The LMC urges practices to be aware of these concerns and to reject any proposal to accept delayed payments from the PCT or make loans to the PCT," he added.

PCT director of finance, Jeremy Cook, said: "The PCT has been considering various schemes which will help the financial position. The PCT considered borrowing funds from a variety of sources including local GPs who are independent businesses. On advice from the Cambridgeshire Medical Committee, however, the PCT realised this would not be appropriate and has decided not to proceed with this option.

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