22.09.11
PFI deals jeopardising trusts’ stability
Clinical and financial stability at 22 NHS trusts is being undermined by the costs of repayments on PFI contracts, according to the Department of Health. These trusts run 60 units across the NHS.
The rising cost of paying for hospitals built through the Private Finance Initiative (PFI) is increasing pressure on the NHS. This scheme allows private firms to pay to build hospitals and the organisation pays an annual fee back over 30 years.
There are currently 103 PFI deals, with yearly bills predicted to rise by 75% in the next 18 years, mostly due to inflation. By the time the final scheme is paid off in 2049, over £70bn will have been paid, a sum which far exceeds the value of the building projects, £11.4bn.
Health Secretary Andrew Lansley said: “The truth is that some hospitals have been landed with PFI deals they simply cannot afford. Like the economy, Labour has brought some parts of the NHS to the brink of financial collapse.”
David Stout, of the NHS Confederation told the BBC: “We do need to look at how we remunerate hospitals for their care, and if a hospital has high costs the Government I think is right, and we would support this, the government does need to look at how we ensure they get the right amount of money to run that care.
“We don't want the care to be closed simply because of the cost of PFI; that would be foolish.”
Some of the trusts named as facing difficulties have refuted the claims, and others state that if NHS funding keeps up with inflation then the repayments will be met.
Stout said: “We must not forget PFI projects have provided the NHS with some much needed new buildings and there are few realistic alternatives for funding significant hospital developments. But these deals were devised at a time when funding coming into the NHS was growing and income was stable.
“The issue now is that the NHS is undergoing fundamental change and income for hospitals to cover the costs of PFI will become less stable, primarily because the NHS faces an unprecedented financial challenge.
“PFI contracts are long term deals lasting up to 25 years but, in order to respond to the current unprecedented financial challenge, we will need to close some services or parts of hospitals in order to invest in more efficient services elsewhere that are better for patients. With resources locked into PFI contracts, we will find it harder to make these vital changes.
“There is a real danger that we will be paying for hospitals that are not being fully used.”
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