06.07.12
NHS PFI repayments to total £79.1bn
PFI could ultimately cost £300bn, a new analysis of Government figures and contracts suggests, with NHS repayments contributing £79.1bn. The Guardian evaluated contracts sanctioned by the Treasury and found that repayments will grow to £10bn per year by 2017/18.
This follows the South London Healthcare Trust being placed into administration, after spending 14% of its income on a PFI deal agreed under Labour. PFI repayments from the NHS alone amount to £1.76bn this year, increased from £196m in 2001-2. In 2029-30, NHS PFI repayments will peak at £2.71bn a year.
717 PFI contracts are currently underway to fund new schools, hospitals and other public facilities with a total capital value of £54.7bn. 39 further projects were being procured this March.
The NHS accounts for 118 PFI schemes, with a capital value of £11.6bn. By the time the repayments are finally made, they will total £79.1bn. The present government has six NHS PFI projects currently in procurement, with a total capital cost of £1.01bn.
In opposition, George Osborne pledged that the Conservatives would stop using PFI and before the 2010 election, Liberal Democrat leader Nick Clegg condemned PFI as “a bit of dodgy accounting – a way in which the Government can pretend they’re not borrowing when they are, and we’ll all be picking up the tab in 30 years”.
The expense of PFI schemes consists of ongoing running costs built into the contracts and PFI has been criticised for providing poor value for money compared with the interest rates the Government would pay if it borrowed directly to pay for the schemes.
The Treasury said yesterday it expected to make an announcement soon, following a review of PFI schemes.
A spokesperson said: “The Government has already taken action to drive savings in PFI and as part of its review of PFI aims to deliver a new, cheaper model, which will ensure a fair deal for the taxpayer now and in the longer term. The Government has for the first time published a clear assessment of PFI liabilities.”
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