27.08.15
Corbyn pledges to eradicate PFI schemes in NHS with public cash
Labour frontrunner Jeremy Corbyn has pledged to bail out NHS trusts from private finance initiative (PFI) schemes by setting up a government fund to eradicate the debt, if he is elected leader.
He said two-thirds of NHS trusts in deficit have PFI debts, which is often “unsustainable” for hospitals.
According to him, investment in the NHS carried out under PFI schemes is like “buying your house with a credit card”, and added that it is Labour’s duty to “clear up the mess” the party made originally.
Writing for the Guardian, Corbyn praised recent proposals by Labour candidate for London mayor, Sadiq Khan, who suggested buying up the debt owed by the capital’s hospitals to private firms in order to “remove the PFI burden”.
The frontrunner said: “Khan’s proposed scheme for London is a start, but we cannot have a better deal for London than the rest of the country. The Labour council in Northumberland county offered a bailout loan to its local NHS trust and saved millions of pounds for patients care. Nearby Tees, Esk and Wear Valleys mental health trust also bought out its PFI debt, which will save an estimated £14m over the next 23 years.
“In opposition we need to campaign for a fund to be set up to bail out NHS trusts from PFI schemes forced upon them. This will save our NHS, rebuild our economic credibility and, most important, save lives.”
According to figures from the Unite union, 15 NHS trusts are spending over 5% of their annual budget on PFI financing, while five spend over 10%.
“Every penny paid to a PFI company is money withdrawn from those waiting for an operation, money removed from the training of clinicians, and money denied for life-saving treatments,” Corbyn said.
He added that much of the PFI debt is owned offshore to “avoid paying tax” on the profits generated from taxes, with “huge profits of public money are being made by tax dodgers”.
PFI schemes became prevalent under the last Labour government after investments in new hospitals.
“Ministers were too petrified to make the argument for conventional borrowing and instead fell for the city’s con trick,” Corbyn said.
In a speech earlier this year, former Labour leader Ed Miliband said PFI schemes were a costly “burden” as a result of the new hospitals built under Labour, adding that there was a need to get arrangements right.
In the last parliament, seven trusts were given an “emergency stability fund” of £1.5bn in grants to help them avoid slashing services as a result of PFI repayments.
In June 2014, Northumbria Healthcare NHS Foundation became the first in the country to terminate its PFI contract, made possible by a £114m loan from its local council.
(Top image c. Niall Carson, PA Images)