‘I wanted a new hospital, but the cost is a scandal’
‘Buy now, pay later’ deals have become an albatross around the NHS’s neck, warns former Yorkshire MP
LOOKING back to the 1950s and 60s, David Hinchliffe can recall visiting the old Pinderfields Hospital in Wakefield, where his father was being treated in huts built for casualties of the Second World War.
Four decades later, the thenWakefield MP and chairman of the Parliamentary health select committee saw his daughter being treated for appendicitis in the very same huts.
He was among those who campaigned for a new hospital to serve the city, and warmly welcomed the news in 2001 that the Labour government of the time was to provide just that.
But fast-forward 16 years and the now-retired Mr Hinchliffe, who at the time questioned the use of the Private Finance Initiative (PFI) to finance the hospital’s construction, believes the costs of the “buy now, pay later” scheme have become an albatross around the NHS’s neck.
The state-of-the-art new Pinderfields Hospital was officially opened by the Princess Royal in 2011, while the new Pontefract Hospital, also paid for under PFI, was opened by the Duke of Gloucester in 2010.
As part of the deal signed with Consort Healthcare, the Mid Yorkshire Hospitals Trust will pay £1.61bn over 35 years, including £38.8m last year, for buildings with a capital value of £312m.
Describing the cost of the scheme as “nothing short of scandalous”, Mr Hinchliffe told The
Yorkshire Post: “In my view, there should have been much more vigorous efforts by them and local MPs to press nationally for a renegotiation of the debt repayment arrangements.”
During his spell as chairman of the health select committee, Mr Hinchliffe recruited Professor Allyson Pollock, a strong critic of PFI, as an adviser as it looked at the increasing involvement of the private sector within the NHS under New Labour.
“When, during my last Parliament, the health committee, at my behest, specifically looked at PFI, my wish to involve her again was blocked by ‘loyalist’ Labour MPs then appointed to the committee,” he said.
“The report eventually issued by the committee was far less critical of PFI than I would have liked it to be but the minority of MPs against it were simply outvoted by Labour MPs in favour who had Conservative support.”
Around Yorkshire, hospital trusts have signed PFI deals which will ultimately cost taxpayers £3.8bn, though the schemes signed locally are not even among the most expensive in the country.
In addition, four mental health trusts in Yorkshire – Leeds and York Partnership, Rotherham, Doncaster and South Humber, Bradford District Care Trust and Tees, Esk and Wear Valleys – have committed to paying £748m as part of similar projects.
Supporters of the projects, first used by the Conservatives before becoming widespread under New Labour, say they transfer the risk of major investment to private contractors, who take on maintenance and other costs.
Mid Yorkshire Hospitals NHS Trust chief executive Martin Barkley said: “The PFI scheme was approved on the basis that it represents good value for money. The fact it does represent good value for money does not mean the cost of the investment year on year is not insignificant.
“Those costs, compared to the costs of the old, poor environment hospitals Pinderfields and Pontefract have replaced, could be as much as an extra £20m per annum. For that money though, the local population and staff have the benefit of being served by two new, modern, fit-for-purpose hospitals.”
There should have been more vigorous efforts to renegotiate. Former Wakefield MP David Hinchliffe.
THE ‘BUY now, pay later’ PFI contracts, signed by five NHS trusts in Yorkshire at a cost of £3.8bn to taxpayers and now regarded as ‘scandalous’ because of the scale of the repayment charges, need to be seen in the context of New Labour’s landslide win in 1997. Twenty years ago, Britain’s hospitals – and schools for that matter – were in a shameful state of neglect. They were literally falling down after decades of chronic under-investment.
It also made sense for Tony Blair and Gordon Brown to embrace the Private Finance Initiative – it had been pioneered by John Major’s government and it enabled them to honour promises made to voters in key marginal constituencies across the country. In this regard, both men maintain – to this day – that this was, and is, money well spent because of the parlous state of the public services that they inherited. Yet, in value-for-money terms, these deals – and the eyewatering costs incurred – were too good to be true and are now compromising the care of patients across the region because so much cash has to be diverted from the front line just to service these debts.
Though hindsight is everything in politics, those Labour MPs and campaigners who cheered their then-Prime Minister and Chancellor might not have been so acquiescent if they had actually taken the time to read the smallprint, never mind the fact that some buildings have become almost obsolete over the years because of changes in the way NHS care is delivered.
What matters now, however, is that past misjudgments are not repeated – the warning issued today by former Wakefield MP David Hinchliffe who chaired Parliament’s health select committee from 1997 to 2005. A politician who commanded respect because of his expertise, and independence, he is despairing that more has not been done to renegotiate these deals, especially as interest rates are at a record low, and that such arrangements have not been subjected to greater scrutiny. It’s an important point. Just think how many doctors and nurses could be recruited now if the region’s trusts weren’t paying out £112m a year to honour PFI obligations before they treat a single patient?