NHS Mortgage Will Make It Difficult For Trusts To Achieve Savings

Under the Private Finance Initiative private companies paid for and built new hospitals with the National Health Service then paying off a ‘mortgage’ over the course of 30 to 40 years. In total 103 PFI schemes were set up with a total project value of £11.3 Billion (figures relate to the time at which the hospitals were built). Under the scheme the private company that built the hospital pays for the upkeep of the building with a contractual requirement for it to maintain high standards.

Dr Mark Porter of the British Medical Association said that \”Money is being squeezed and the size of the repayments will make it harder for some to make the savings it needs to. I don\’t see why the National Health Service can\’t go back to its lenders to renegotiate the deals, just as we would with our own mortgages. Locking the NHS into long-term contracts with the private sector has made entire local health economies more vulnerable to changing conditions. Now the financial crisis has changed conditions beyond recognition, so trusts tied into PFI deals have even less freedom to make business decisions that protect services, making cuts and closures more likely.\”

A Department of Health spokesperson said that hospitals built under the Private Finance Initiative were providing good value for money and that “all trusts, not just those with PFI contracts, will need to deliver significant efficiencies over the coming years in order to meet rapidly rising demands while protecting front-line services. One of the benefits of PFI is that the buildings are always contractually required to be kept in good condition – good maintenance will always cost more than not maintaining facilities to a high standard.\”

The NHS is under increasing pressure to achieve long term cost savings. Although its budget has been protected by the Coalition Government for the duration of the next parliament the organisation has to put in place long term plans to achieve goals therefore cuts in the short term are a must.

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