PFI leaves hospi­tals with toxic £80bn legacy

Yorkshire Post - - FRONT PAGE -

HOS­PI­TAL TRUSTS face a cap­i­tal crisis un­der a “toxic” legacy of pri­vate fi­nance ini­tia­tives (PFI), a new re­port warns to­day, jug­gling an £80bn bill for just £13bn of ac­tual in­vest­ment.

The PFI scheme, which funded cap­i­tal spend­ing through pri­vate fi­nance and was in­tro­duced in 1998, was last year abol­ished by Govern­ment.

But its legacy means the NHS faces a PFI “post­code lot­tery”, think tank IPPR warns to­day, as some trusts are forced to spend up to £1 in ev­ery £6 on pay­ments.

This weighty burden raises questions over wor­ry­ing con­se­quences for build­ings, tech­nol­ogy and pa­tient safety, the re­port claims, fol­low­ing years of un­der­in­vest­ment and aus­ter­ity.

Call­ing for a right-to-buy scheme to bring con­tracts into pub­lic own­er­ship, along­side ma­jor cap­i­tal in­vest­ment of £5.5bn an­nu­ally, the IPPR says the NHS will bear this burden for decades to come un­less ac­tion is taken.

“In 2018, the Chan­cel­lor told us ‘PFI was dead’,” said Chris Thomas, IPPR Health Fellow. “Our anal­y­sis shows it is ac­tu­ally alive and well – thanks to a Govern­ment refusing to take de­ci­sive ac­tion.

“That means toxic PFI con­tracts are still driv­ing bil­lions away from pa­tients and into pri­vate bank ac­counts. And it means the NHS has no mech­a­nism to bring in cap­i­tal in­vest­ment – block­ing trans­for­ma­tion and threat­en­ing even ba­sic safety stan­dards in our hospi­tals.

“The blus­ter of Boris’ pro­posal in Au­gust – a small, one-off cap­i­tal cash-in­jec­tion – is wholly in­ap­pro­pri­ate given the scale of this on­go­ing crisis.”

The IPPR anal­y­sis, based on

Govern­ment data, found that NHS trusts will pay £2.1bn on PFI re­pay­ments this year, with some ar­eas los­ing up to a fifth of their bud­get.

The im­pact of this is un­even, its anal­y­sis found, with the worst af­fected trusts be­ing North-West Anglia, Sherwood For­est, Univer­sity Hospi­tals Coven­try and St He­lens and Knowsley.

Among those listed as hav­ing a PFI con­tract with a cap­i­tal value over £300m is Mid York­shire NHS Trust, which faces pay­ments at eight per cent of its net in­come.

Na­tion­wide, less than a third of the fi­nal £80bn PFI bill has been paid, with a fur­ther £55bn still out­stand­ing.

Ad­di­tion­ally, the re­port warns, cap­i­tal in­vest­ment has “fallen off a cliff” as hos­pi­tal trusts re­al­lo­cate long-term cap­i­tal funds to patch up day-to-day run­ning costs.

The NHS will not be able to pro­vide a mod­ern health ser­vice un­less it has funds to in­vest in new tech­nol­ogy and in­fra­struc­ture, the re­port con­cludes, and a fail­ure to do so puts pa­tient safety at risk amid claims of £3bn worth of un­re­solved main­te­nance is­sues.

A De­part­ment of Health and So­cial Care spokesper­son said: “We are back­ing the NHS with the money it needs to pro­vide world­class care in world-class fa­cil­i­ties and the Govern­ment has al­ready an­nounced that it will no longer use PFI fi­nanc­ing for projects.

“This is just the start of a more strate­gic ap­proach to cap­i­tal fund­ing in the NHS, with the de­vel­op­ment of a new health in­fra­struc­ture plan fo­cussed on lo­cal ar­eas where the need is great­est along with a multi-year cap­i­tal bud­get.”

The de­part­ment re­cently in­jected an ex­tra £1.8bn of fund­ing into the NHS to up­grade build­ings and equip­ment and tackle ur­gent in­fra­struc­ture projects.

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