The Socialist Health Association strongly opposes the government’s plans to reintroduce Private Finance Initiative (PFI) -style schemes to fund NHS Neighbourhood Health Centres, which were announced today.
The original PFI model has left our health service burdened with decades of costly repayments that drain resources from patient care. NHS trusts continue to make extortionate payments to private companies for buildings that would have cost a fraction of the price through traditional public financing. We still owe £44 billion and on average, trusts are repaying private investors at an average rate of roughly 6 times the original investment – as high as 27 times for one trust – with the taxpayer set to fork out £80 billion in total for NHS buildings and facilities worth £13 billion. This is despite the fact that almost all trusts have already paid off the capital investment and leaves some trusts paying more in historic PFI debt than it spends on medicines or nursing staff.
Despite the government’s reassurances, we remain concerned that future repayment for these projects will still exceed the original investment – as seen more recently in Wales – representing further unnecessary loss of public funds into the private sector. Based on historic PFI models, it also means that what should be public assets remain largely owned by the private sector until the debt is repaid and will need to be “rented” by the NHS in order to provide patient care. At a time when the NHS desperately needs every penny for frontline services – to say nothing of the almost £16 billion repairs backlog across the estate, which 80% of trusts could fund immediately if their remaining PFI debts were cancelled – committing to expensive long-term contracts which increase trusts’ debt repayments to private investors represents poor value for money.
Additionally, locking the NHS into rigid 25–30-year contracts that prevent trusts from adapting facilities to changing healthcare needs represents a failure to understand the needs of a 21st century health service. As shown by the pandemic, our health service requires flexibility, not decades of contractual constraint.
Rather than addressing fundamental questions about sustainable NHS funding, these plans are effectively mortgaging our health service’s future, with the health of the population treated as an expendable collateral cost.
The government’s proposal today is more than a mistake, it flies in the face of overwhelming evidence that PFI has already financially crippled trusts, diverted funds away from patient care and is against the public interest. It also directly contradicts the Chancellor’s oft-stated aim to reduce public debt. Direct public investment, funded through government borrowing at lower rates, may cost us more upfront but significantly less over time.
We call on the government to fund NHS infrastructure through transparent public investment that offers genuine value for money and keeps our health service publicly owned and democratically accountable.