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PFI hospitals risk collapse

This article is over 13 years, 3 months old
The crisis is also threatening financial meltdown at new hospitals built under the Private Finance Initiative (PFI) as NHS trusts find it difficult to refinance their debts.
Issue 2123

The crisis is also threatening financial meltdown at new hospitals built under the Private Finance Initiative (PFI) as NHS trusts find it difficult to refinance their debts.

The pressure group Health Emergency has highlighted the cases of two London hospitals – Queen’s in Romford, and the Princess Royal University Hospital in Bromley.

According to the group, both hospitals are struggling with debts in excess of £90 million to the private sector and the way in which the department of health and local health authorities set up PFI deals.

Under PFI, the government contracts private firms to build and run hospitals and other facilities on its behalf. It agrees to payment plans that generally run into decades.

The cost to the public is much greater than if the government raised the money itself because private firms borrow money at commercial rates and also demand substantial profits on their investment.

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