Labour’s vow to end debt burden of PFIs

A LABOUR government would end Huddersfield Royal Infirmary’s finance nightmare, the Shadow Chancellor has vowed.

Labour has said if it was in power it would review all PFI contracts and, if necessary, buy out the debt.

The news may give hope to campaigners battling to save Huddersfield Royal Infirmary (HRI).

PFI - or Private Finance Initiative - has been widely blamed for the deteriorating financial position of our hospitals.

Calderdale and Huddersfield NHS Foundation Trust (CHFT) is currently paying about £22m a year – about 7% of its £330m budget – in PFI payments on Calderdale Royal Hospital (CRH).

The 60-year PFI deal is set to cost in excess of £700m on a hospital which was said to have cost about £64m to construct in 1998.

So far there have been no offers to bail CHFT out of its PFI deal.

The inability of hospital bosses to renegotiate the costly PFI terms on CRH have been at the heart of plans to move the majority of services to Halifax.

Trust chiefs have said they are considering using a break-clause to buy themselves out of the deal at a cost thought to be in the region of £200m.

But they have also revealed they intend to use PF2 – a new version of PFI – to finance the unpopular hospital shake-up plan, including the demolition of HRI and the extension of CRH. The Government has said PF2 is fairer on the public sector, more flexible and provides better value for money for taxpayers.

Colne Valley MP Thelma Walker, a former headteacher, has now backed Labour plans to end the use of PFI or PF2 – private loans used to build the majority of schools and hospitals over the past 20 years. But some commentators have doubted Labour’s plan is affordable, with figures of £50bn and more being estimated.

At the Labour Party Conference Shadow Chancellor John McDonnell MP announced that a Labour government would “end the scandal of the Private Finance Initiative.”

He said PFI had drained money from public services for years with billions paid out in dividends to shareholders.

He vowed Labour would sign no new PFI deals and would develop alternative public sector models for funding infrastructure.

Mrs Walker said she supported the policy idea.

“PFI is not the most sustainable way to finance new schools, hospitals and other infrastructure projects and I am pleased that a Labour government would bring PFI deals back under state control,” she said.

“We can see from the PFI deal for the Calderdale Royal Hospital that it has crippled the NHS trust and is partly to blame for the proposed downgrading of Huddersfield Royal Infirmary.

“I have recently asked the Government for their policy on new PFIs and if they would fund new hospitals with them.

“Their response was that they didn’t have a policy and it was down to individual NHS trusts.

“This Government has no idea how to run the country. It’s time for them to step aside and let Labour lead the country.”

No-one from CHFT was prepared to comment on the policy idea.

Karl Deitch, from Let’s Save HRI, said he was doubtful Labour could afford to buy out all PFI debt, saying it was unfair to “get people’s hopes up.”

He said: “If that money is available, why isn’t it spent more wisely now? We need it brought up in Parliament as soon as possible and not just to gain votes. All parties should be on-side with cancelling PFIs as it’s one of the biggest reason why the NHS is struggling.

“Take Calderdale, for example. Without that PFI Huddersfield Royal Infirmary would be in the black.

“As soon as we joined trusts we automatically inherited that debt which is now putting our hospital in danger.

“I don’t think any more PFIs should be signed.

“I think an overhaul of the NHS is required, better structure and management and it not being used as a political football to gain votes.”

Mike Forster from Hands Off HRI, said Shadow Health Minister, Jonathan Ashworth, had already backtracked on the promise, saying they would look at the PFI deals on a “case by case” basis.

“We will applying maximum pressure on them to ensure that they carry out this pledge for Calderdale,” he said.

In July hospital bosses said they had explored various routes of financing their controversial shakeup plan which could see the infirmary demolished and CRH extended.

They said their investigation found only PF2 was a viable option.

John McDonnell, Labour’s Shadow Chancellor, said: “The scandal of the Private Finance Initiative has resulted in huge long-term costs for taxpayers while providing enormous profits for some companies.

“Over the next few decades nearly £200 billion is scheduled to be paid out of public sector budgets in PFI deals.

“Jeremy Corbyn has made it clear that under his leadership Labour will sign no new PFI deals.

“Never again will this waste of taxpayer money be used to subsidise the profits of shareholders, often based in offshore tax havens.

“I can tell you today that when we go into government we’ll bring these contracts and staff back in-house.”