Debts racked up by hospitals under the Private Finance Initiative (BFI) hit patient care, says a leading member of the British Medical Association (BMA).
Dr Jonathan Fielden, chair of the BMA’s consultants’ committee, told BBC Radio 4’s File On 4 that the debts are distorting “clinical priorities.”
And even supporters of PFI say it could lead to the “wrong services in the wrong places” for local patients.
Dr Fielden is concerned that with hospital trusts owing millions of pounds to contractors under PFI they struggle to finance these long term deals.
He cited the example of University Hospital Coventry where the NHS Trust had to borrow money to pay the first payment of £54m it owed the private contractor involved in the PFI deal.
Private companies that fail to win hospital building contracts are set to pocket millions of pounds in “compensation” from the NHS.Hospitals negotiating private finance initiative (PFI) schemes could be forced to pay almost 2 per cent of the total contract costs to short-listed private companies which fail to secure deals, under proposals being discussed by the Department of Health (DoH).
Unions and pressure groups have condemned as “scandalous” proposals which would see private sector giants already making billions from PFI schemes receiving further money for plans which fail to get off the drawing board.
A £374 million hospital in Bristol going out to tender this week will be the test case for the scheme which a DoH senior official said would “compensate” private sector consortiums for rising tendering costs following EU laws which came into force at the end of January.
In the case of Bristol, the “runner-up” company could receive around £6 million, while a third firm may also be paid. North Bristol NHS trust is planning the 947-bed hospital, which is due to open in Southmead by 2013.
Consumers must rein in their borrowing levels if a downturn in the UK economy is to be avoided, a report has warned.
The Ernst & Young Item Club’s latest report says that the strong UK economy rests upon shaky foundations, with excessive levels of household debt posing a serious threat.
It states that through mortgages, credit cards and other loans, borrowers have racked up £1.3 trillion in debts, putting the long-term stability of the UK economy in jeopardy.
“The problem is that we are now becoming a little bit too confident and the lenders are relaxing their criteria and we’re all gearing up appropriately,” the Item Club’s chief economic adviser, Peter Spencer, told BBC Radio Five Live.
“Of course that’s great in the short term but for the longer term it does pose risks.
“We are borrowing to finance our consumption and of course we’re doing that at a time when the economy and everything else, our personal finances, are looking pretty sweet. The worry is what happens to our own finances when things turn sour.”
USING private finance deals to pay for major public projects was questioned yesterday, after more than £20 million of taxpayers’ money was spent returning a troubled college into public ownership.
The Scottish Funding Council (SFC) approved the £27.5 million buy-out of West Lothian College’s Private Finance Initiative (PFI) contract.
Six years ago, the college became the first in Scotland, and just the second in the UK, to be built using PFI.
But in 2005, the Scottish Parliament’s audit committee warned that the college faced an £11 million budget shortfall as it tried to meet its PFI payments over the next 20 years.
Late last year, the Scottish Executive backed the SFC’s recommendation that the college’s PFI contract be bought out.
Patricia Hewitt, the health secretary, gave the green light yesterday to plans for seven new hospitals to be built under the private finance initiative at a cost of £1.5bn.
Her decision to back the NHS’s biggest ever tranche of investment will provide modern facilities for patients in Bristol, Peterborough, Middlesbrough, Wakefield, Tunbridge Wells, Chelmsford and Edmonton, north London.
But it added to anxieties among health service managers and union leaders that the NHS is locking itself into repaying huge sums in 30-year deals with the private sector for buildings and equipment that may not meet changing medical needs.
Six new hospitals will be built under the controversial private finance initiative, the Government has announced today.
This announcement came as the BBC reported that at least 10 major hospitals are in discussions over their future, with some facing the end of emergency care.
Under PFI, hospitals are built by private companies, with NHS trusts repaying them over a period of around 25 or 30 years.
The projects have caused deep controversy with some running into severe financial problems.
Critics say the private finance initiative (PFI) scheme is a
“money-making racket” for private companies and is a waste of money.
Also today, the former headteacher of one of the first secondary schools to be built through PFI, told the Daily Telegraph that the initiative had “crippled” the school.
Hospitals built under the controversial Private Finance Initiative will become ‘white elephants’ which have to shut wards or close altogether, a leading authority on the NHS has warned.
Tony Harrison, a research fellow at the King’s Fund, fears some PFI hospitals will be left with too few patients because of the recent policy shift by the government towards treating more people at primary-care level in communities.
Critics claim that while PFI-funded public-sector facilities such as hospitals and schools save the government money because private companies pay for their construction, the long-term cost to whichever public body inherits them is far greater than if the taxpayer had paid for them at the outset.