Behind the statistics

The PPP Forum states: “Treasury figures show that 88% of all PFI projects have been delivered on time or early … Before PFI, the National Audit Office showed that only 30% of comparable traditional public sector projects came in on time and 27% on budget.”

These figures do not support privately financed procurement because there is no evidence that changes in cost overruns are a product of the financing route rather than the host of procurement reforms that have been made over the past 10 years. Nor do they compare like with like, because public procurement overruns refer to out-turn costs in relation to an original budget allocation whereas PFI overruns refer to additional revenue costs incurred after contract signature. When PFI final capital costs are compared with original capital cost estimates all first-wave PFI hospitals show increases ranging from 33% to 229% above estimate.

• PPP Forum states: “PFI is used because it allows the government to take advantage of private sector expertise to manage complex investment programmes and so provide better value for the taxpayer.” This claim is based on promises made during the PFI approval process, not on actual outcomes during the operational period. Outcomes have yet to be audited, despite PFI deals in excess of £35bn.
• PPP Forum provides no evidence to support the claim that “the costs of the Scottish parliament would have been halved, saving the taxpayer £200m” had PFI been used. The claim was contradicted by Lord Fraser, who said in his Holyrood Inquiry report: “I am unable to conclude that the decision to adopt conventional funding, rather than resorting to PFI procurement, was wrong and was the cause of the delay and cost which has plagued this project.” Moreover, according to press reports, in 2001, members of the Scottish parliament were advised that the use of the PFI would add £30-40m to costs.
• PPP Forum also claims that cleaning standards do not suffer under PFI. But it omits to state that last November the Healthcare Commission’s acute hospital portfolio review for 2003/04 found extensive problems: “Ward managers at hospitals involved in a PFI perceived cleaning standards to be lower than did those at other NHS hospitals.”
• PPP Forum states finally that “Professor Pollock knows very well that PFI is not responsible for reducing bed numbers”. On the contrary, we have provided evidence in the British Medical Journal that PFI is only affordable if acute trusts switch revenue from clinical staff budgets to capital spending. In the first-wave schemes, this resulted in new hospitals being commissioned with 25% fewer beds. The added financial pressure of PFI has contributed to the closure of 5% of all NHS beds since 1997. These articles and the numeric analysis have never been rebutted by the Department of Health or Whitehall’s PFI units.

PPP Forum’s letter is therefore an unwarranted attack on the integrity of our research.

Allyson Pollock, head, public health policy unit, University College London