Jane Ward, Southampton West Socialist Party
£475 million was spent by the NHS in 2020-21, just to pay interest on Private Finance Initiative (PFI) loans alone. With interest linked to RPI inflation, as the costs of goods rise, so does the size of PFI debt, and of annual repayments too. This is at a time when the NHS is facing cuts of £12 billion a year by 2024-25 as Covid funding is withdrawn, and an estimated £6 billion of increased costs next year due to rising prices.
The PFI contracts ensure that repayments are guaranteed and will take precedence over all other NHS expenditure such as staffing and equipment. Investors in PFI schemes make huge profits while the NHS and patients suffer.
PFI was introduced by the Tory government in 1992, and massively expanded under Tony Blair’s New Labour government. Private companies raised capital for hospital building schemes, built them and then leased them back to the NHS on lucrative contracts lasting as long as 50 years. In addition, they maintain the fabric of the buildings and may provide services such as cleaning and catering.
It is calculated that PFI schemes will eventually make £80 billion for the lenders and leave the NHS with just £13 billion of assets. A third of projects ran late and went over budget, and a number of PFI hospitals had structural defects.
The new Royal Liverpool Hospital has just opened, five years later than planned. Carillion, the company that was building it, went under. Major cracks in the concrete structure were detected and the external cladding was found to be combustible. The cost of building the hospital was estimated to be £624 million. The final cost is believed to be over £1 billion.
The government stopped any new PFI schemes in 2018, but their legacy and a mountain of debt remain. The Socialist Party demands the scrapping of all PFI contracts and the cancellation of all outstanding debt. The PFI companies should not be paid any compensation. For a fully funded and publicly owned NHS.
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