PFI Scheme's Cripple NHS Hospitals
Taxpayers are having to pay more than £200billion for schools, hospitals and other projects whose capital value is little more than £50billion.
In one example, a hospital in Bromley, south east London, will ultimately cost the NHS £1.2 billion, more than 10 times what it is worth. Another hospital was charged £52,000 for maintenance that cost £750. The annual cost of the schemes is almost £400 for each household.
The 22 trusts in jeopardy include The Royal London and Barts, Oxford Radcliffe, North Bristol, St Helens and Knowsley, and Portsmouth who run more than 60 hospitals which care for 12 million patients, and South London Healthcare, Barking, Havering and Redbridge, North Middlesex, Wye Valley, Worcester Acute Hospitals, Mid Yorkshire, and Walsall.
Under the PFI deals, a private contractor builds a hospital or school. It owns the building for up to 35 years, and during this period the public sector must pay interest and repay the cost of construction, as well as paying the contractor to maintain the building the cost are also linked to inflation, and therefore the cost to taxpayers has increased by up to a third since the beginning of the credit crisis. The Companies who run PFI schemes boast profit margins of up to 71 per cent.
Department of Health officials and executives at the 22 trusts will develop detailed plans for dealing with the crisis. Their proposals are expected to include significant cost–cutting and the renegotiation of PFI contracts.