NHS ‘should renegotiate’ PFI repayments
By politics.co.uk staff
The NHS may have to consider renegotiating the 30-year repayments it faces following New Labour’s private finance initiatives, a health expert has suggested.
It follows the revelation that the NHS in England will end up repaying six times the cost of the original value of the new hospitals and mental health units built under the PFI schemes.
Figures obtained by the BBC suggested that, once maintenance and other costs were taken into account, the NHS would have repaid £65.1 billion for the huge investment seen under Labour, when the original value of the investment was just £11.3 billion.
This means many trusts will spend more than ten per cent of their budgets financing the PFIs.
The constrained spending environment is likely to lead to cuts across the NHS, in spite of its budget increasing in real terms after being ringfenced by the coalition government.
“It is a bit like taking out a pretty big mortgage in the expectation your income is going to rise, but the NHS is facing a period where that is not going to happen,” Professor John Appleby of the King’s Fund thinktank told the BBC.
“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 NHS can’t go back to its lenders to renegotiate the deals, just as we would with our own mortgages.”
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