NHS faces PFI debacle
WORKERS, MAR 2006 ISSUE
The disaster of the Private Finance Initiative in the NHS is epitomised by a series of failed schemes in London and the sinking of a central plank of government dogma. The abandonment of the £1.1 billion rebuilding scheme at Barts and the Royal London Hospital will cost the NHS £100 million in consultancy fees. The government was aware of the soaring costs and impossibility of the NHS meeting the financial returns criteria as early as September 2003 but hid the report. Barts, which has been underfunded for decades, now faces increased uncertainty over its future as the government dithers, and costs rise by £600,000 a day because contractors are still being paid to turn up.
The Paddington campus project, another £1 billion scheme, failed without a brick being laid in June 2005. The cost was £14 million in consultancy fees. Queen Elizabeth Hospital in Woolwich is facing bankruptcy under the PFI terms, being £29 million in debt in Spring 2006 with a possible default position of £140 million looming.
There are similar financial disasters overshadowing UCLH, Brent, Whittington, Queen Mary's and other trusts the length and breadth of London. The cost escalation of PFI hospital projects runs to over £2.5 billion, with individual hospital consultant and contractor costs ranging from 157% – 425% in excess of original bids. Even the Treasury Head of PFI has described the 14 – 15% investment returns as "too high"!
PFI has milked the NHS dry to such an extent that it could soon be abandoned, something the health trade unions have been demanding for the last decade.