Silly PFI costs cripple NHS hospitals

How's this for private-public financial co-operation: £75 to replace an air freshener, £8,450 to install a dishwasher and £15,000 to install a laundry door. A couple of examples of some of the costs from private finance initiative schemes agreed by the previous Labour government. Unfortunately there's no end in sight: UK taxpayers are committed to pay a good £220bn for more PFI costs.

Patient impact

Hospitals are "being forced to spend extortionate sums on private contractors rather than spending that money on helping sick patients get better," health secretary Andrew Lansley is quoted in the Telegraph. "Unless we take action, these post-dated cheques left to us by Labour could seriously impact on patients."

Highly expensive PFI deals are now a huge drain for the NHS. More than 20 hospitals trusts have had to appeal to the Department of Health for financial propping up due to high PFI expenses.

Little VFM

A big part of the problem is that many trusts pay for maintenance work on a fixed basis. There's little shopping around. But it's important to remember that while the Tories are throwing mud at Labour for much of the current financial PFI mess, it was a Conservative government that pioneered PFI in a big way under John Major's government - PFI goes right back to 1992.

The amounts of PFI cash involved have a huge impact on the UK economy over the years. Around 630 schemes have been put in place since 1992, covering an investment of £63 billion, estimates law firm Norton Rose. "Taxpayers will have to pay private firms £217 billion in user charges for these facilities between now and 2033," says Norton.

Which makes all the talk about risk being transferred to the private sector - remember that? - laughable, not to say posthumously expensive.
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