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NHS struggles with PFI repayments

Hospitals built through the controversial private finance initiative (PFI) have left the NHS with a staggering £65bn bill, it has been revealed.

Figures obtained by the BBC show that “mortgage” repayments demanded by the scheme account for in excess of 10% of the turnover of many trusts.

The project allows private companies to use their own money for the construction and maintenance of hospitals. Health trusts pay back the cash over 30 years.

“They were planned for a different world. I’m sure that in some cases people feel their hands are tied.”

Nigel Edwards, NHS Confederation

The agreement means that 103 hospitals worth a total of £11.3bn when they were built will collectively repay in excess of £65bn, at a current annual rate of around £1.25bn − to increase to £2.3bn in 2030. The extra cost is understood to have come from additional fees such as maintenance, cleaning and catering.

Trust representative NHS Confederation director of policy Nigel Edwards said: “They were planned for a different world. I’m sure that in some cases people feel their hands are tied.”

A Department for Health spokesman said: “In many cases, repayments include not only the initial capital cost and financing charges, but also all ancillary services like cleaning, portering and building maintenance costs over the life of the contract.”

Hospitals under the PFI scheme will not make their final repayment until 2048.

Readers' comments (1)

  • Unfortunately the PFI forms of Contract have become such politcal hot potatos that an unbiassed and systematic review will be virtually impossible. Even the article above is not free from bias- where is the proper analysis comparing like for like costs. PFI outturn cost will always come out higher than what would appear to be a reasonable 'purchase price'. The £65bn quoted above, £53.7bn over the quoted worth (assume that is the same as original construction price under a more traditional form of D&B contract), includes maintenance, catering and cleaning. These are big ticket items that are not costed in the article. Over a 30 years life these will be significant. What else have the NHS trusts pushed into the PFI's maintenance/ running phase contractor's remit? What costs have been saved form other budgets? What cost poor NHS management? (example: £300m/pa advisory -not medical- consultants that comes to £9bn in additional management fees alone over the same 30 years if continued)
    Scotland's much maligned SFT will also suffer the ignomy of mistrust, biased reporting and lack of support from politicians. They too are finding the PFI should not be ruled out- against the judgement of the SNP/ Liberal government.
    Will the truth ever come out? Probably not, but let's try and not think like a politican.

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