Socialist Worker

Hospitals slash care so they can pay privateers

Issue No. 2215

Hospitals have been saddled with so much debt under the government’s Private Finance Initiative (PFI) that they are being forced to cut back on patient care.

Tory and Labour governments have said that they used PFI, in which the NHS leases new hospitals from private contractors, because it would generate “efficiency savings”.

Under the scheme, NHS trusts are locked into 30-year deals with the construction firms that manage and maintain hospitals they have supplied.

The repayments are non-negotiable.

Researchers from The King’s Fund think-tank have found the total debt of this “NHS mortgage” now stands at £65 billion. The hospitals themselves were worth just £11.3 billion when first built.

The weight of the debt, combined with cuts to health budgets, means that many NHS trusts are slashing budgets in order to carry on making payments to the private firms.

In total, the NHS is now paying back £1.25 billion a year—a figure which will rise each year until 2030.

Professor John Appleby, chief economist at The King’s Fund, said, “It is a bit like taking out a pretty big mortgage in the expectation your income is going to rise—but the NHS is facing a period where that is not going to happen.”

The GMB union believes the total cost of PFI for hospitals, schools, libraries and prisons is £230 billion. With £44 billion already handed over, the final bill would be more than £270 billion—five times the value of what was built.

Unison union general secretary Dave Prentis said, “Right from the start we said that PFI costs far more than publicly funded projects.

“PFI ties trusts into long-term, inflexible contracts, and saddles hospitals with huge debts, wasting money that should be going towards patient care.”

It’s a pity that the previous New Labour government, which commissioned most of the schemes, didn’t heed Unison’s advice.

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Tue 17 Aug 2010, 18:05 BST
Issue No. 2215
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