NHS staff and patients are paying the price for the plethora of shiny new hospitals built under Private Finance Initiatives (PFI).

A report in the Cipfa journal Public Money and Management (April), looking at the cost of using PFI to build hospitals, says the system creates budget inflexibilities that increase pressures on the NHS to cut its largest cost: the jobs, working conditions and pay of staff and thus access to quality healthcare services. “PFI heralds an emerging conflict between capital and labour in healthcare”, say researchers at Manchester Business School, who studied the cost of using private finance to get the first 12 PFI hospitals up and running by 2001-02.

While frontline staff get the raw end of the deal, the private consortia pay little tax – which is strange when you consider that the Government assumes that PFI yields a 22 per cent return to the Treasury when deciding whether to use public or private finance.

They found that hospital trusts’ annual payments to their private sector partners are higher than expected – a blow cushioned by increased government funding, which is scheduled to stop this year. The extra cost to the public purse of private over public finance for these first hospitals is about £60 million a year, which is 25 per cent of the trusts’ income.

The real cost of PFI schemes

Study reveals that NHS staff and patients are paying the price for PFI built hospitals

BACKGROUND

• Staff stressed out by managers

• Cutting edge of improvement

• Jackpot for some GP practices

• What worked for me

Related Internet Links

• Public sector jobs

• Snakes & Ladders

The picture is no rosier in housing. A Department for Communities and Local Government review suggests that PFI social housing schemes cost “significantly” more than those funded by traditional housing grants, Building Magazine (March 28) reports.

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