30.10.12
PFI undermines financial viability of NHS – PAC
The Government will have to bail out £1.5bn for failing NHS trusts, a highly critical report from the Public Accounts Committee (PAC) has stated.
PAC reported that every NHS organisation needs to make significant changes to patient services to become financially sustainable, and these changes could make it more difficult to access healthcare and see waiting times increase.
Seven trusts have been highlighted as needing £1.5bn funding over the life of PFI deals, and 30 organisations are unviable in their current form.
The report calls for clearer criteria for when intervening action is necessary for failing trusts, highlighting the example of South London Healthcare, which has been placed into administration.
Margaret Hodge, chairman of the Committee, said: “The Department of Health could not explain to us how it will deal with an NHS trust that goes bankrupt. Nor could it provide reassurance that financial problems would not damage the quality of care or equality of access to all citizens, wherever they live.
“It very much looks like the Department is inventing rules and processes on the hoof rather than anticipating problems and establishing risk protocols.
“We are particularly concerned that the financial viability of a number of trusts is being undermined by the fact that they are locked into unaffordable PFI contracts.”
The report said: “As the role of hospitals changes and more services are provided in the community it is possible that every trust in the country will have to restructure.
“In the last two years of the current spending review period services will need to be reconfigured significantly to be able to deliver the scale of efficiency savings needed for the NHS to become financially sustainable.
“If changes are not made to concentrate and centralise hospital services, and deliver more services in the community, even greater efficiencies will be needed in hospitals to avoid waiting lists rising.”
Katherine Murphy, chief executive of The Patients Association, said the efficiency target was putting “huge pressure” on trusts and that “ultimately it is patients who are paying the price”.
Unison head of health Christina McAnea said: “This report raises very serious questions about how these ongoing financial problems are likely to affect the quality of care for patients.”
Mike Farrar, NHS Confederation chief executive, called it a “hugely important” report and said: “We cannot deal with these issues on a piecemeal basis. We need a frank conversation with the public about how we deal with these problems.”
He added: “It is important not to overstate the impact of PFI. It is part of the story, but the fundamental issues are much deeper. We absolutely need to look at alternative funding models for financing NHS estates, but we must also remember that PFI is not the sole reason why organisations find themselves in financial distress.”
The seven trusts with PFI deals that are expected to need government funding are: Barking, Havering and Redbridge NHS Trust; Dartford and Gravesham NHS Trust; Maidstone and Tunbridge Wells NHS Trust; North Cumbria NHS Trust, Peterborough and Stamford Hospitals NHS Foundation Trust; South London Healthcare NHS Trust; St Helens and Knowsley NHS Trust.
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