Labour has proposed bringing existing PFI contracts back under public ownership
Despite the government’s decision not to sign any new Private Finance Initative (PFI) contracts, the NHS will be spending 6% more on PFI contracts in a decade’s time than it does now, Left Foot Forward can reveal.
In September this year, the NHS was projected to spend £2.15bn on PFI. But in September 2028 it will be spending £2.63bn, according to Treasury figures compiled by Health Campaigns Together.
The finding renders Philip Hammond’s budget promise of ‘no new PFI contracts’ almost meaningless, according to campaigners.
John Lister, editor of Health Campaigns Together, and author of an upcoming book on PFI called Unhealthy Profits, told this site:
“Philip Hammond’s belated decision to call time on PFI deals will come as small comfort to the dozens of NHS trusts who are wrestling with the unaffordable annual costs of PFI contracts they were effectively press ganged into signing by successive governments cutting the flow of public sector capital.”
Lister also said that since 2010, NHS funding has been “virtually frozen in real terms” and for many health trusts, PFI payments eat up more than 10% of their revenue.
“Philip Hammond has yielded to the inevitable by ditching an already discredited scheme: but he has ducked the important issue of what to do about the existing deals. It’s clear now, as John McDonnell has said that these need to be brought back into public ownership to restore transparency, end the flow of cash offshore to tax havens, and bring outsourced staff back in to the NHS,” he said.
A spokesperson for the National Health Action Party told LFF:
“It’s not good enough to say that you will no longer sign off on any more PFI. What the NHS needs is the abolition of PFI through nationalisation.”
It’s not just the NHS which will continue to be hit by PFI charges but also other government bodies. Left Foot Forward reported yesterday that taxpayers will be spending around £10bn on PFIs in total in 2028.
On the other hand, a report by the University of Greenwich argued that ending existing PFI contracts would cost under £2.5bn and would pay for itself within two years.
Note: These figures do not include two recently-cancelled PFIs – Birmingham’s Midland Metropolitan Hospital and Liverpool Royal Hospital
Joe Lo is an investigative journalist and writes for Left Foot Forward. Follow him on Twitter.Like this article? Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by becoming a Left Foot Forward Supporter today.