“The only lesson we can learn from the disaster of PFI is to keep private finance – in all its forms – out of our NHS.”
Rachel Reeves is facing calls from experts, academics and patients to steer clear of new private finance deals for the NHS ahead of the Autumn budget on 26 November.
Labour’s 10-year Health Plan includes developing a business case for public private partnerships (PPPs) to deliver neighbourhood health centres, before a final decision at the autumn budget.
The Department of Health and Social Care has awarded £3 million in contracts to Deloitte and lawyers Addleshaw Goddard.
The firms will advise the government on whether to use public-private partnerships (PPPs) to build dozens of “neighbourhood health centres” in England.
More than 50 academics, including LFF columnist Lord Prem Sikka, have written to the Chancellor asking her to “abandon this dangerous and damaging proposal and fund public services through direct taxation or borrowing”.
Conservative prime minister John Major launched private finance initiative (PFI) in 1992, and its use was expanded under Tony Blair.
PFI involves the public sector hiring private companies to build and maintain an asset. They then pay the private company back over 25-30 years, with repayments often costing far more than the value of the asset itself.
As of April 2024, PFI schemes in the UK have generated an estimated £306 billion in debt.
The letter – coordinated by campaign group We Own It and Professor Christine Cooper of the Glasgow Business School – calls the arguments for private finance “bogus”.
They have also warned Reeves that “Using private capital in the NHS is no different from a family buying their home using a payday loan.”
This afternoon, MPs, patients and members of the public will hold a protest outside the Department of Health and Social Care, demanding the NHS be protected from private finance.
The government said that the “lessons of PFI have been learned”. However, We Own It argues that PFI has already been repackaged as PF2, LIFT, Scottish NPD and now the Welsh Mutual Investment Model (MIM).
Sophie Conquest, Lead Campaigner at We Own It, said: “The cost of private finance in our NHS is literally sickening. Taxpayers’ money has been diverted away from patient care towards private profit for shareholders. Under PFI, we are paying £80 billion for just £13 billion of actual investment”.
“Some trusts are having to choose repaying PFI debts over buying medicine for patients.”
“Private finance has been repackaged time and time again. New models like the Welsh Mutual Investment Model are no different – they cost the taxpayer much more for the same asset.”
“The only lesson we can learn from the disaster of PFI is to keep private finance – in all its forms – out of our NHS.”
Olivia Barber is a reporter at Left Foot Forward
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