NHS bids to renegotiate £65bn PFI contracts

Leading NHS figures have called for PFI contracts to be renegotiated to allow trusts to cope with spending cuts.

It follows the revelation that the NHS in England faces a total bill of £65bn for PFI hospitals according to figures obtained by the BBC.

Its website said it meant some trusts were making repayments of more than 10% of their turnover.

In total, the NHS currently pays back £1.25bn each year - a figure which rises year-on-year until 2030 when it will top £2.3bn. The final payment will not be made until 2048. The health service has been told to find up to £20bn of savings by 2014 despite the fact its budget has been protected.

Nigel Edwards, director of policy at the NHS Confederation, which represents trusts, said: “They were planned for a different world. I’m sure that in some cases people feel their hands are tied.”

Dr Mark Porter, of the British Medical Association, added: “Locking the NHS into long-term contracts with the private sector has made entire local health economies more vulnerable to changing conditions. Now the financial crisis has changed conditions beyond recognition, so trusts tied into PFI deals have even less freedom to make business decisions that protect services, making cuts and closures more likely.”

Professor John Appleby, chief economist at the King’s Fund health think-tank, said: “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.

A Department of Health spokeswoman told the BBC the schemes were providing “value for money” and were “affordable”.

She added: “All trusts, not just those with PFI contracts, will need to deliver significant efficiencies over the coming years in order to meet rapidly rising demands while protecting front-line services. One of the benefits of PFI is that the buildings are always contractually required to be kept in good condition - good maintenance will always cost more than not maintaining facilities to a high standard.”

Examples cited by the BBC

·        Coventry and Warwickshire NHS Trust - Currently spending almost 15% of its income on its PFI project. Chief executive Andrew Hardy says the trust is already looking to reduce its payments.

·        South London Healthcare NHS Trust - Has major PFI projects in Bromley and Woolwich. Spending 13% of income on repaying debt. Trust says there are “undoubtedly some constraints from having these fixed costs”.

·        Dudley NHS Trust - Bosses say they are looking for “innovative” ways to reduce the PFI bill, which now accounts for 13% of turnover.

·        Buckinghamshire NHS Trust - Three hospitals developed under PFI. Trust admits repayments “impact on the ease at which we can make savings”.