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Top e-government news, updated daily, and regular features from the top people in the public sector.
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| ‘Disastrous’ PFI hospitals are defended by minister |
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The government this week pressed ahead with its commitment to private finance initiatives by announcing £224m hospital rebuilding schemes in the region.
Salford’s Hope and Tameside hospitals will benefit from a national series of PFI schemes worth £1.5 billion at six hospitals across the UK, said Health Minister Andrew Burnham during a visit to Salford where he met NHS staff.
However, the schemes – where the private sector builds hospitals and is paid back by the state over time– came under fire from a leading academic who said they could have a “disastrous” effect on local health authority finances.
But Burnham hit back saying PFI allowed patients to gain hospitals when they needed them, rather than “waiting in line” for hospitals which could take years for the state to finance.
55 PFI projects
Hospitals are among a wide tranche of PFI schemes now built and maintained by the private sector, including prisons, fire stations, schools, roads, leisure centres, housing projects, council offices, libraries and court buildings. There are currently 55 PFI projects in the region with a total capital value of more than £2bn, while the figure nationally lies at £46bn. The government plans to invest a further £26bn in PFI projects across the country by 2010.
Under the latest announcement, Hope Hospital will get a £112m PFI scheme, plus £44m of public cash, for single rooms for patients to replace crumbling Victorian wards, an enhanced A&E facility and three operating theatres.
Meanwhile, Tameside Hospital will benefit from £68m PFI investment with three day case operating theatres, new surgical wards and a 30-place day hospital for elderly mental health patients.
Piecemeal fashion
Burnham, MP for Leigh, said: “Because of the way capital was handed down over the years, many hospitals have grown in a piecemeal fashion, with improvements when they could afford it. With the old fashioned way, there was a fund pot and a long queue to gain access, it meant frustration for communities because they couldn’t get the hospitals they deserved. There’s value in having hospitals here today, hospitals now rather than waiting in a long queue for a hospital that never turns up.”
Critics say PFI schemes can cost two or three times as much as publicly-funded projects, while PFI contracts also lock local authorities into 30-year contracts which ultimately fleece the state.
There are also claims that PFI firms pay extortionate rates for maintenance, with one example of £330 being charged for changing a light switch at a school, while firms often benefit from lucrative refinancing deals, the profits of which are not passed onto the NHS.
Kings Fund
Meanwhile, the Kings Fund, a right wing think tank, has suggested that larger PFI hospitals could become “white elephants” as more health services are moved into the community.
Jean Shaoul, Professor of Public Accountability at Manchester Business School, said: “This is a disaster. Obviously new facilities will be welcomed by both staff and patients, but it’s a very, very expensive way of going about it as PFI costs double, because the private sector pays higher costs of capital to borrow than the government.
“This is not a rational policy, the only reason this is going ahead is because many of the government’s financial advisers and members of the Treasury are on secondment from the private sector, and this is in their interest.”
Overcrowded
Cumberland Infirmary in Carlisle, the country’s first hospital to be built under a PFI scheme costing £87m, has been dogged with problems since it opened in April 2000. Medics claimed wards were too small and dangerously overcrowded, there were bed shortages and that the hospital’s 30-year contract with PFI firms made change difficult.
Last December, it emerged the Queen Elizabeth Hospital in London, which opened in 2001 under a PFI scheme, was technically bankrupt – but it still has to pay back £15m a year to PFI firms under its fixed financial contract. |
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