HOSPITAL FINANCE

Evening Post, Volume CIV, Issue 67, 16 September 1922, Page 8

HOSPITAL FINANCE

MONEY BY LOAN

, SHORT TERMS ADVOCATED,

Comment on hospital finance is contained in the annual report of the Direc-tor-General of Hospitals to the' Minister. "For the first time this year, boards' estimates of their capital requirements were considered en bloc, it having been found that once a board's estimates had been apprdved and tho money provided by way of levy and subsidy, little reason could be urged against the expenditure being undertaken," states the Director-, General. "The present method, therefore, enables the Department to view as a whole the Dominion proposals for the erection of hospitals or the addition thereto, and, if the proposals result in too heavy a cost, to ensure the postponement of all but absolutely essential works. A few years ago it was the exception to find a board raising a loan for capital works, it being possible to finance for such works, in most cases, out of the annual capital levy and subsidy. Now, however, few boards can Stand the heavy burden in one year of the capital expenditure required to keep our institutions up to date, or to replace obsolete buildings with those suitable to meet the growth of the population apd the advancement in medical and surgical requirements. Boards, therefore, have perforce have had to have recourse to borrowing, and thus spread the coat over a number of > years. This naturally tends, for the present, to lighten the' burden on ratepayers and the Consolidated Fund; but the fact must not be lost sight of that the amount of loans raised annually shows no signs of diminishing, and the piling up of the annual payment of interest and sinking fund year after year will eventually become a very heavy burden on both the Consolidated Fund and the rates. For this reason, and having in view the present high rates of interest, boards have been advised not to spread their loans over too long a period, and to make them, as far as possible, for ten years. Few,,: if any, of the boards would be unable to pay by levy and subsidy a 'loan of, say, £10,000 in ten years, and therefore there seems to be no reason for their borrowing such sums for twenty years, or more at 6g per cent. It might possibly be a good step if the' larger boards at any rate were to combine their loan requirements with"*a view to facilitating the loan flotation, reducing the expenses of advertising, etc., and tending to make them independent of local "facilities for borrowing if more desirable, or preferably to raise their money elsewhere."