Public Health Index: PFI work dries up

For health construction, September’s figures are disappointing. The CPA/Barbour ABI Public Health Index (predominantly tracking work procured by NHS Trusts both directly and via Procure 21+) dropped to 77 from a level of 79 in August, and PFI health work has all but dried up.

Worth £650m-£750m a year, the Procure 21+ framework has picked up pretty much where its predecessor left off and will continue to provide a stream of construction and refurbishment work in the foreseeable future.

New hospital provision is more uncertain. PFI has attracted criticism and in July was branded as “poor value for money” by a Treasury Select Committee. Furthermore, pending reform to the health and social sector and redistribution of power is likely to result in uncertainty. Add a reduction in government funding for construction work and the need to make efficiency savings and the outlook is bleak. A double-digit fall in workload by 2015 is possible.

With the public sector unable to shoulder the financial burden of providing hospitals, the speed at which a new and more flexible PFI model is established will be fundamental. The new model will need to strike a better balance between value for money for taxpayers and an acceptable level of profit for delivery consortiums.