PFI schemes ‘taking NHS trusts to brink of financial collapse’

Health secretary says he has been contacted by 22 trusts struggling to cope with growing burden of private finance contracts The rising costs of paying for hospitals under private finance initiative schemes is bringing NHS trusts to the “brink of financial collapse” and putting patient care at risk, the health secretary has warned. Andrew Lansley said he had been contacted by 22 trusts that are struggling to cope with the growing burden of the PFI contracts, a policy of the former Labour government under which private capital is used to build hospitals and the NHS is left with an annual fee or “mortgage”. Between them, the trusts run more than 60 hospitals. Speaking on BBC Radio 4′s Today programme , Lansley said: “We’re not going to let hospitals collapse financially. “But if we were simply to carry on as the Labour party did in government, we would be seeing hundreds of millions of pounds every year being taken from what could provide improving services for patients in order to pay for PFI projects that roll forward for decades.” He added that patient care could be jeopardised in the areas covered by the 22 trusts, saying: “We’re looking at a risk to services in their areas.” Buckinghamshire, Oxford Radcliffe, North Bristol and Portsmouth are understood to be among the trusts in difficulty. The Department of Health has said there are £12.6bn of PFI contracts in the NHS, with some trusts paying off the scheme until 2050. Annual bills are forecast to rise by 75% to more than £2.5bn in the next 18 years after the recession took its toll on the repayments. In comments to the Telegraph , Lansley said: “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.” The Department of Health has said the government is making an independent assessment of PFI schemes. Proposals designed to ease the burden on struggling trusts could include the renegotiation of PFI contracts. David Stout, the deputy chief executive of the NHS Confederation , which represents health service commissioners and providers, said that there had been “few realistic alternatives” to PFI projects in the NHS at the time of their introduction under Labour. But he warned that the economic climate had changed and that, as PFI payments ate further into resources, there was “a real danger that we will be paying for hospitals that are not being fully used”. “PFI contracts are long term deals lasting up to 25 years but, in order to respond to the current unprecedented financial challenge, we will need to close some services or parts of hospitals in order to invest in more efficient services elsewhere that are better for patients,” Stout said. “With resources locked into PFI contracts, we will find it harder to make these vital changes.” John Appleby, the chief economist on health policy for charity the King’s Fund , told the BBC he was not persuaded by the argument that PFI had brought NHS trusts to the verge of collapse. “The reason that individual hospitals get into financial difficulties are often complex, and it’s not usually one single reason,” he said. “I have to say that, if PFI is seen to be the key problem, it doesn’t auger that well for the future when … the plan is under the new government’s reforms [that] the NHS will be doing deals with the private sector. “[These deals are] not just to build hospitals but to supply health care services, a much more complicated system and a much more complicated exercise.” While admitting that PFI had proved more expensive, Appleby added that some hospitals with the schemes had remained “perfectly healthy financially”. But Lansley insisted the government needed to act in order to tackle “Labour’s legacy of poor value for money”, which he said included the £12.7bn national programme for IT, which is being scrapped after years of delays. He said: “The truth is that we have inherited in the NHS … an enormous legacy of debt – not just PFI debt, but often hospitals that are carrying substantial debts.” Private finance initiative Health policy Andrew Lansley Liberal-Conservative coalition Labour NHS Health Lizzy Davies guardian.co.uk

Posted by on September 22, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.