Tag Archives: PFI

A Smith Institute report recently set out a “progressive” programme to reset the relationship between government and the private sector when delivering public services. The report recommends introducing new accountability requirements for private contractors – such as the need for open book accounting and for the introduction of profit caps. These are viable proposals for ensuring that future government to business contracting prioritises the public interest and places business under a duty to adhere to the same levels of accountability as public bodies. It recognises that the government has the ability and, some may say, the duty to impose requirements on companies […]
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What is the basis for imposing a windfall tax on PFI operators? The NHS is currently in the most austere decade of funding growth in its 69-year history and is facing an unprecedented funding gap of up to £34bn over the 5-year period to 2020/21. With planners facing the unenviable task of rationing care, questions have been raised about areas of NHS funding where savings could be made without affecting patient care. A recent CHPI report found that over the past 6 years PFI companies made pre-tax profits of £831m and are estimated to make profits of almost £1bn over the next 5 years. This led to calls for […]
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Now the Labour Party’s objectives for the NHS are clearer, the real politics begins. If May’s government collapses, as looks increasingly possible, Labour will need to project its tactical policies for the NHS forcefully. The plausibility of how it plans to cope with the winter bed crisis will matter – what will the £500 million promised be spent on? How will a Labour Secretary of State for Health manage delayed transfers of care? If May’s government survives Labour will have to live with Hunt Supremacy for a while longer, and will need some practical ideas. Two events in the last […]
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 How We Can End the PFI Rip Off Next time you have an appointment cancelled at hospital, or a headteacher tells you their school will be losing staff because of budget cuts, ask how much PFI debt they have – the answer may surprise you. My hospital trust, in north-east London, spends nearly £150m a year repaying its PFI debt – nearly half of which is on interest payments. If Theresa May is serious about taking on the unacceptable face of capitalism, she could save Britain a fortune if she goes after the legal loan sharks of the public sector. […]
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This report looks at how much profit has been generated by the private companies owning and operating NHS hospitals and other facilities under the Private Finance Initiative over the past 6 years, and the impact of this on NHS finances at a time of severe funding shortfalls. The Private Finance Initiative is a scheme whereby private companies borrow money from banks and shareholders to build NHS hospitals and facilities. The NHS pays an annual charge to the PFI companies partly for use and maintenance of the hospitals but also to pay back the money, and interest, the private companies have borrowed. The contracts with the PFI companies […]
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The case against PFI grows stronger as the repayment costs rise, NHS finances deteriorate, and international interest rates fall. There is an alternative. PFI is sometimes seen as yesterday’s battle. For over 20 years, capital funding for major public service schemes has been available predominantly only through PFI. Contracts have been tendered, partners selected, and the schools, hospitals, and prisons built. Even many on the left now view PFI as a given. Passim Allyson Pollock’s and John Lister’s excellent work on this subject, what is left to say? The most recent data for NHS PFI schemes should remind us why […]
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The Department of Health (DH) is to create a new property company to replace the two that currently exist1 nearly four years after the intention was first announced. The move is understood to be one of the recommendations of Sir Robert Naylor’s forthcoming report on the NHS estate. The current position came into being as an afterthought to the now much derided Health and Social Care Act 2012 “reforms”, with a new DH owned company, Propco, solving the problem of who took over billions of pounds of property (such as primary care centres, clinics, community hospitals and offices) after Primary […]
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No matter who wins the General Election, the next government will have to deal with the growing cost of inflexible PFI contracts. Those contracts make the task of balancing the books much more difficult. Under the Private Finance Initiative (PFI), the private sector designs, builds and finances much needed new hospitals, schools, roads, prisons and other social and public infrastructure. It also provides the ancillary services – such as cleaning and security, but not the core professional services such as nursing – for typically 15 to 35 years, in return for an annual fee that covers both the capital cost […]
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The Private Finance Initiative is in the news again as Barts with a huge PFI hits financial trouble. The total cost of all PFI schemes in the NHS is £2bn.  Around £1bn of that is payments for facilities management services.  The total expenditure of the NHS is £110bn. If all PFIs were somehow “nationalised” there would still be facilities management costs, repairs and renewals but perhaps they could be provided in house less expensively.  So perhaps £1.3bn could be “saved”. The possibility of simply nationalising all the PFIs is remote (to say the least) – it would require all kinds […]
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PFI – The Biggest Scam You’ve Never Heard Of You’d never be able to tell from the outside, but hundreds of our hospitals, schools, prisons roads and even homes are no longer controlled by us, the people. Why? Because politicians have given away our public buildings to private companies – only to have us rent them back at extortionate cost. Our money is making these tax-avoiding corporations rich, while we end up losing frontline services. This is what they mean by the Private Finance Initiative (PFI). PFI – Doesn’t Make Sense Every year PFI costs us £10 billion – more than the […]
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We need to be critical of the original and Mark 2 Private Finance Initiatives, especially in individual cases for the reasons which have been rehearsed where projected demand has not come through and commercial arrangements were not agreed in the interests of the NHS. Executive Directors still in post (not many) feel this way. There is  experience of a large Trust which now has an affordable PFI – 2 brand new hospitals replacing 19th century and a terrible 1950s building for which there was not an available state capital solution.   It was changed at the last minute to increase bed […]
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In principle, there is nothing wrong with the Government using its credit worthiness to borrow money in a different way from normal general borrowing and to ally the sums raised to a particular capital asset and  / or the means of getting that asset built. (A form of mortgage from the builder – who in turn has to acquire the loan etc). However, most of our Private Finance Initiative schemes in the NHS have gone further than this. 1. The economic case for many has been deliberately manipulated to show that traditional government procurement isn’t better value (I know this from first hand […]
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