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PFI has damaged patient care - Lansley
3:50pm Tuesday 26th June 2012 in News
MULTI-million-pound debts from a private deal to build a Worcester hospital have damaged patient care, says the Health Secretary.
Andrew Lansley said the private finance initiative (PFI) deal to build Worcestershire Royal Hospital in 2002 was one of the schemes which had damaged care at 60 hospitals.
Mr Lansley said: “Money and quality are linked – it’s not good for patients when hospitals can’t manage the books.”
However, Worcestershire Acute Hospitals NHS Trust leaders say that without the PFI deal, there may have been no modern hospitals at all.
Mr Lansley said he had been contacted by 22 NHS trusts, including our own hospitals trust, which claim its clinical and financial stability is at risk because of the spiralling costs of PFI deals.
A trust spokesman yesterday declined to confirm whether anyone there had been in touch with the health secretary or the nature of those discussions.
Under PFI, expanded by the previous Labour government, private capital is used to fund public sector projects such as hospitals and schools.
However, NHS trusts are now saying they are unable to pay for their schemes, believed to cost £5.4 billion in total, as their payments of NHS mortgages have inflated during the recession.
Out of a £320 million budget this year (2011/12) for our acute hospitals trust, five per cent will go on costs of the PFI deal – £16 million.
The cash is paid back over 30 years from 2002 but Worcestershire Acute Hospitals NHS Trust was unable to confirm how much the overall PFI would cost when all the payments were made.
The original cost of the Royal was £82 million and John Rostill, the previous chief executive, said it would cost about £720 million to pay off the debt.
NHS Worcestershire bailed out the hospitals trust in March by giving them £7.3 million from cash reserves.
Chris Tidman, deputy chief executive and finance director of the acute trust, said: “There have been longstanding financial challenges for the Worcestershire health economy that pre-date the opening of Worcestershire Royal Hospital in 2002.
“These related more to the funding formulae for rural areas as well as the overall configuration of health services across the county.
“Compared to some of the relatively large schemes nationally, Worcestershire Royal Hospital is a relatively small PFI scheme and the annual unitary payment accounts for about five per cent of the trust’s total budget.
“Our contract includes catering, cleaning, laundry, security, portering, medical equipment and building/site maintenance and therefore an advantage for our patients is that they benefit from modern facilities and the latest medical equipment.
“In the absence of the PFI initiative, it is unclear how the NHS would have achieved its aim of modernising its acute hospitals.
“We continue to negotiate with our PFI partners to find ways of getting best value, and have already agreed a reduction this year in our overall payment of £750,000.”