Over 60 NHS hospitals are reportedly ‘on the brink of financial collapse’ due to the crippling costs of their private finance initiative contracts.
The Health Secretary, Andrew Lansley has said that he has been contacted by 22 health trusts which, according to the Telegraph and Independent, includes Buckinghamshire, West Middlesex, Barts and the London, Oxford Radcliffe, North Bristol, St Helens and Knowsley as well as Portsmouth. The 22 trusts cover some 60 hospitals and 12 million patients.
The trusts are claiming that the increasing costs of the PFI schemes are endangering their ‘clinical and financial stability’ putting patient care at risk.
Under these schemes private investors would finance the building of a public asset such as a school or hospital and retain ownership of it for as long as 35 years during which time the public service repays the cost of building it plus interest and maintenance costs.
PFI was a brain-child of the Tories under John Major and was roundly attacked by Labour at the time. But on gaining power Labour embraced the concept with almost total abandon. It now transpires that the vast majority of the contracts for these schemes have been a massive success….. for the investors. And an unmitigated disaster for the hard pressed tax-payer.
As many, if not all, would have costs built in that follow the RPI, then with inflation at its current rate the costs will of course ratchet up. But not only that the cost of fuel and electricity is rising fast too adding to the overall headache.
The Conservatives are quick to point the finger at Labour incompetence. Mr Lansley told the Daily Telegraph "Over the last year, we've been working to expose the mess Labour left us with, and the truth is that some hospitals have been landed with PFI deals they simply cannot afford.
"Like the economy, Labour has brought some parts of the NHS to the brink of financial collapse. Tough solutions may be needed for these problems, but we'll help the NHS overcome them. We will not make the sick pay for Labour's debt crisis."
But we are where we are. The government are quick enough to try and change pension contracts and force public sector workers across to the private sector so why not tell the PFI companies that their contracts are going to be re-written?
The government needs to send out a clear message to anyone who wants to do business with them. Play fair!
Otherwise there will always be a queue of chancers and lobbyists in the corridors of power hoping to get a signature that allows them to milk the system.
But one point to bear in mind is that anyone that has benefited from these hospitals during the last few years would say that any money was money well spent.