Public Finance Initiative (PFI) hospitals are raising problems for health ‘reformers’ in a two ways. Firstly, they are a huge financial burden on the NHS so that medical services are cut to pay for them. Secondly, Lansley’s reforms require that hospitals transform to NHS trust status. Since trusts are required to have a stable financial status, something must be done about the PFI hospitals which are not financially stable.
Lord Owen calls on Liberal-Democrats to reject the Abolish the NHS Bill.
Prime Minister David Cameron to make a speech on privatisation of the NHS defending – despite all the opposition – and claiming – despite all the evidence – that the NHS is not to be privatised.
- Conservative election poster 2010
A few recent news articles concerning the UK’s Conservative and Liberal-Democrat coalition government – the ConDem’s – brutal attack on the National Health Service.
A health minister has confirmed that the government is examining some private finance initiative (PFI) schemes involving NHS trusts, although he denied that there have been talks about injections of extra funding.
“We are committed to creating stronger hospitals through foundation trusts,” said health minister Simon Burns. “As part of this work we are examining some PFI schemes, but it is too early to know what the solutions might be, or what, if any support might be needed from the department. There have been no discussions between the Treasury and the Department for Health on specific proposals to provide extra funding for PFI hospitals.”
The Telegraph today reported that the government might have to bail out PFI hospitals. To become a foundation trust hospital, an NHS trust needs to meet strict requirements on the quality of clinical care they provide and on the state of their finances. The Financial Times along with the Telegraph reported that the review will be carried out by consultancy firm McKinsey.
PFI deals have been heavily criticised for leaving trusts with huge repayment bills. Last August the Department of Health said that the NHS faces a £65bn PFI repayment bill, six times the original total value of the buildings covered. The nature of the scheme means that private companies fund the initial building of hospitals and other health service units, often also providing maintenance services, with NHS trusts paying for the facilities over a number of years or decades.
17 NHS trusts, more than half of which are saddled with extortionate PFI debts, face deep cuts to the frontline.
This lays bear the financial crisis facing the health service. The financial unsustainability of these trusts could see some local communities losing their maternity services or accident and emergency departments.
The FT notes that in the past six years, these 17 trusts (a graphic of the affected hospitals ishere) have needed to be bailed out with £625m in as yet unreturned loans and other forms of cash support. This is the equivalent of the annual running costs of two entire hospitals.
Perhaps the most controversial fact in this report is the fact that more than half of these hospitals have buildings funded through private finance initiatives (PFI). Because these buildings are thought to be too expensive to close, neighbouring institutions — which may not have financial problems — could be closed to save them.
Liberal Democrat MPs were urged at the weekend by SDP founder Lord Owen to vote down the government’s unpopular NHS proposals – even if they are substantially changed.
Health Secretary Andrew Lansley has indicated that he is ready to accept “substantial and significant” changes to the legislation, which would hand over commissioning powers to GPs and extend private-sector provision of NHS services.
But Lord Owen said that the NHS was being “pushed to conceptual destruction” and that it was “almost impossible” to sufficiently rewrite such a flawed Bill.
He stressed that the government’s “listening exercise” had shown that professionals and users believed only minor legislative changes were required.
“To drop this massive legislative spanner into the works would be a profound error,” he said.
“A sufficient number of Liberal Democrat MPs can surely be found to vote this Bill down … with the official Labour opposition, some Northern Ireland MPs and Scottish and Welsh Nationalists, where such legislation would not have a hope of getting through their legislatures.”
The Prime Minister will promise to keep waiting lists low, maintain spending, not to privatise the NHS, to keep care integrated and to remain committed to the “national” part of the health service.
Such is the concern in Downing Street at the damage the issue of NHS reform is causing the Government, that Mr Cameron will put his reputation on the line with a personal pledge to protect its core values. It represents his boldest attempt yet to assuage criticism from his Liberal Democrat Coalition partners and from many health professionals over the impact of the reforms.
In his speech, the Prime Minister will admit that he is willing to act on their concerns after listening to the “profession and patients” during a two-month exercise which was held after Mr Cameron called for a “pause” in the Health Bill’s passage.
His “five guarantees” are designed to show the Prime Minister is committed to the NHS, and “he is hearing what is being said”, according to one source. Mr Cameron’s promise on integrated care is designed to ensure patients receive continuity of treatment, without having to explain their condition from scratch each time to different doctors.