PFI schemes 'taking NHS trusts to brink of financial collapse'
Guardian, 22 September 2011
Health secretary says he has been contacted by 22 trusts struggling to cope with growing burden of private finance contracts
The rising costs of paying for hospitals under private finance initiative schemes is bringing NHS trusts to the "brink of financial collapse" and putting patient care at risk, the health secretary has warned.
Andrew Lansleysaid he had been contacted by 22 trusts that are struggling to cope with the growing burden of the PFI contracts, a policy of the formerLabourgovernment under which private capital is used to build hospitals and the NHS is left with an annual fee or "mortgage". Between them, the trusts run more than 60 hospitals.
Speaking on BBC Radio 4's Today programme, Lansley said: "We're not going to let hospitals collapse financially.
"But if we were simply to carry on as the Labour party did in government, we would be seeing hundreds of millions of pounds every year being taken from what could provide improving services for patients in order to pay for PFI projects that roll forward for decades."
He added that patient care could be jeopardised in the areas covered by the 22 trusts, saying: "We're looking at a risk to services in their areas."
Buckinghamshire, Oxford Radcliffe, North Bristol and Portsmouth are understood to be among the trusts in difficulty.
The Department of Health has said there are £12.6bn of PFI contracts in the NHS, with some trusts paying off the scheme until 2050. Annual bills are forecast to rise by 75% to more than £2.5bn in the next 18 years after the recession took its toll on the repayments.
Incomments to the Telegraph, Lansley said: "Like the economy, Labour has brought some parts of the NHS to the brink of financial collapse. Tough solutions may be needed for these problems, but we'll help the NHS overcome them."
The Department of Health has said the government is making an independent assessment of PFI schemes. Proposals designed to ease the burden on struggling trusts could include the renegotiation of PFI contracts.
David Stout, the deputy chief executive of theNHS Confederation, which represents health service commissioners and providers, said that there had been "few realistic alternatives" to PFI projects in the NHS at the time of their introduction under Labour.
But he warned that the economic climate had changed and that, as PFI payments ate further into resources, there was "a real danger that we will be paying for hospitals that are not being fully used".
"PFI contracts are long term deals lasting up to 25 years but, in order to respond to the current unprecedented financial challenge, we will need to close some services or parts of hospitals in order to invest in more efficient services elsewhere that are better for patients," Stout said.
"With resources locked into PFI contracts, we will find it harder to make these vital changes."
John Appleby, the chief economist onhealth policyfor charity theKing's Fund, told the BBC he was not persuaded by the argument that PFI had brought NHS trusts to the verge of collapse.
"The reason that individual hospitals get into financial difficulties are often complex, and it's not usually one single reason," he said. "I have to say that, if PFI is seen to be the key problem, it doesn't auger that well for the future when … the plan is under the new government's reforms [that] the NHS will be doing deals with the private sector.
"[These deals are] not just to build hospitals but to supply health care services, a much more complicated system and a much more complicated exercise."
While admitting that PFI had proved more expensive, Appleby added that some hospitals with the schemes had remained "perfectly healthy financially".
But Lansley insisted the government needed to act in order to tackle "Labour's legacy of poor value for money", which he said included the £12.7bn national programme for IT,which is being scrapped after years of delays.
He said: "The truth is that we have inherited in the NHS … an enormous legacy of debt – not just PFI debt, but often hospitals that are carrying substantial debts."
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Lansley's claims about hospital PFI debt 'misleading'
Guardian, 22 September 2011
DoH assessment contradicts health secretary's warning about the number of hospitals 'at risk of collapse' due to PFI debt
Andrew Lansley's claim that 22 hospital trusts are at risk of collapse over theirprivate finance initiative(PFI) debts has been laid open to question by NHS performance data rating most of them as financially sound.
The health secretary said on Wednesday 22 trusts in England were "on the brink of financial collapse" because they had been "landed with PFI deals they simply cannot afford" by the Labour government.
But the Department of Health's own latest quarterly assessment of the NHS's performance rated 17 of them as "performing" financially between January and March 2011. Only four were deemed "underperforming", while the performance of one, South London Healthcare, is "under review".
Lord Crisp, the chief executive of the NHS when many of the PFI deals were agreed under Labour, also cast doubt on Lansley's dramatic warning by pointing out that the cost of repayments under those contracts amounted to only about 1% of the entire service's annual budget of more than £100bn.
Professor John Appleby, chief economist at the influentialKing's Fund health thinktank, said it was wrong to argue that the NHS's financial problems were caused by such deals. "To simply blame PFI is simply misleading at best," he said.
Shadow health secretary John Healey accused Lansley of "trying to offload blame for the present problems his policies are causing in the NHS".
Lansley, who said some trusts had told him that they could not afford their PFI repayments, was forced to partially retract the claim when an aide conceded that "we're not pretending PFI is the only problem they [hospitals] face".
The DoH later insisted its assessment of trusts' financial stability was unrelated to Lansley's list. "The list of 22 trusts is 100% accurate and is based on returns from NHS trusts to the DoH setting out the main issues that need to be addressed for organisations to achieve financial stability. The 22 listed are those that specified [in April] that their PFI was one of the issues affecting them," said a spokesman.
But one of the 22, theNorth Bristol NHS Trust, voiced "puzzlement" that it was on Lansley's list. The £374m PFI deal it had struck to build the new Southmead Hospital would not interfere with its ongoing application to become a semi-independent foundation trust hospital, a spokesman said, adding: "The PFI deal equates to yearly repayments of less than 7% of our overall annual turnover. Repayments have been factored into our long-term financial plans, so we know they are affordable."
Mike Farrar, chief executive of the NHS Confederation, which represents hospitals, said: "We are pleased that the government has been upfront with the fact that PFI is a problem for many hospitals. But PFI is not the principal cause of the NHS's financial problems.
"Repayments on PFI debt is likely to be £1.5bn this year, yet by 2014-15 the NHS needs to find savings of £20bn. To address this we need to start looking at the NHS's big-ticket costs, such as how we deliver care and where. We need pragmatism and leadership to do this as it will involve some extremely difficult decisions. A political blame game is a waste of time."
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CARLISLE HOSPITAL PFI IS CRIPPLING NHS TRUST FINANCES, GOVERNMENT TOLD
News & Star, Thursday, 22 September 2011
THE NHS trust which runs north Cumbria’s two main hospitals is among 22 which have warned the Government that they are being financially crippled by private finance schemes.
Health Secretary Andrew Lansley has been contacted by 22 NHS trusts which say their "clinical and financial stability” is at risk because of the spiralling cost of Private Finance Initiative (PFI) contracts.
Cumberland Infirmary was the first major hospital in the country to be funded by a PFI initiative when it opened in April 2000.
One health union in Carlisle has claimed that the PFI which funded the building of the £87 million hospital is already damaging services.
The repayments over 30 years are likely to run into hundreds of millions, annually eating up a large proportion of the trust’s budget.
Unison official Dallan McGleenan said today that the hospital was now planning to close more beds.
North Cumbria University Hospitals Trust, which runs the Infirmary and Whitehaven’s West Cumberland Hospital, now faces having to cut £15m from its budget to balance the books in the current financial year.
The controversial PFI schemes – expanded by the previous Labour government – use private capital to fund public infrastructure projects such as hospitals.
The public body then repays the private firm with interest over decades, and in some cases the costs of maintaining the buildings.
Mr McGleenan said: "Carlisle’s PFI scheme has been a millstone around the hospital’s neck of local healthcare provision.
"It puts a huge financial burden on the trust has also has an effect on hospital services in Whitehaven.
"The PFI is also the reason the trust could not achieve foundation status and will be taken over by another trust. They’ve already achieved savings at the trust but that’s been done by cutting services, which affects the quality of the services they offer.”
The trusts which have contacted Mr Lansley say they are now unable to pay for their schemes – believed to be worth more than £5.4bn in total – because the payments of their "NHS mortgages” have inflated during the recession.
Mr Lansley said: "Over the last year, we’ve been working to expose the mess Labour left us with, and the truth is that some hospitals have been landed with PFI deals they simply cannot afford. Like the economy, Labour has brought some parts of the NHS to the brink of financial collapse.
"Tough solutions may be needed for these problems, but we’ll help the NHS overcome them. We will not make the sick pay for Labour’s debt crisis.”
The Department of Health is expected to detail plans to resolve the problem in coming months after meeting with executives whose trusts are in difficulty.
Proposals may include the renegotiation of PFI contracts and cost-cutting.
The Commons Treasury Committee has also said PFI deals are not value for money, with the long-term costs significantly higher than conventional Government borrowing. The initiative was introduced by John Major’s Conservative government.
The Department of Health said there are £12.6bn of PFI contracts in the NHS, with some trusts paying off the scheme until 2050. It added that the Government was making an independent assessment of PFI schemes.
Mr Lansley added: "We need to work with hospitals to solve these problems, helping them to improve their finances and their performance. Well-managed finances mean stronger organisations providing better, more innovative patient care.”
The 22 trusts whose PFI contracts are said to be putting them at financial risk have been identified as:
St Helens and Knowsley, South London Healthcare, University Hospitals Coventry and Warwickshire, Wye Valley, Barking, Havering and Redbridge, Worcester Acute Hospitals, Oxford Radcliffe and NOC, Barts and the London, University Hospitals of North Staffordshire, Dartford and Gravesham, North Cumbria University Hospitals, Portsmouth Hospitals, Buckinghamshire Healthcare, West Middlesex University Hospital, Mid Yorkshire Hospitals, Walsall Hospitals, North Middlesex, North Bristol, Mid Essex Hospital, Maidstone and Tunbridge Wells, Sandwell and West Birmingham, Royal National Orthopaedic Hospital.
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PETITION LAUNCHED TO SAFEGUARD SERVICES AT CARLISLE HOSPITAL
News & Star, 26 September 2011
A campaign to save services at Carlisle’s Cumberland Infirmary took to the city streets on Saturday.
Labour activist Kevin Parker has launched a petition opposing any movement of services ahead of a planned takeover. He wants to show the strength of opinion in the city to the new bosses of the hospital, whoever they may be.
Supporters met in the city centre, next to the bandstand, just after 9.30am.
They invited shoppers to add their names to the Save Carlisle Infirmary petition, which demands long-term improvements and opposes any move to strip away existing services.
Mr Parker, who had taken the petition around city centre pubs the previous night, was joined by fellow Labour supporters, trade union activists and members of the Socialist Alliance – but he stressed that it was not a party political campaign.
He said he wanted everyone to join together for the good of the hospital.
He said: "We have had a good response already. At the moment it’s really about raising people’s awareness that there is a real danger that we could lose services to other areas.”
The North Cumbria University Hospitals NHS Trust, which runs the Cumberland Infirmary and West Cumberland Hospital, is to be taken over by an existing foundation trust because it cannot meet the criteria to secure the compulsory status itself.
Those trusts in the running are Northumbria, Morecambe Bay and a joint bid by Newcastle and the Cumbria Partnership, which already runs community services.
But campaigners fear the takeover will lead to the gradual stripping of services from the local hospitals. A similar petition has already been launched in west Cumbria by Copeland MP Jamie Reed.
Mr Parker explained: "We want a pledge from the trusts that they will keep existing services rather than deplete them and hive them off to their other hospitals.”
The existing trust has been hit by financial problems, leading to a number of recent cutbacks.
But Mr Parker said that the answer is not to simply cut services. Instead, he wants to see the existing PFI contract – which sees hospital bosses fork out millions to pay off the Cumberland Infirmary’s ‘mortgage’ – renegotiated to get a better deal.
"North Cumbria is a special case in terms of geography. People live in a very wide area and it needs a central hospital that can meet their health needs. People don’t want to travel 100 miles for treatment. Hospital services need to be secure and improve in the longer term,” he added.
"We want the NHS trust, local politicians and the general public to be united in delivering a better Cumberland Infirmary. None of the trusts have been able to assure campaigners or trade unions that the Cumberland Infirmary, its services and its staff have a long-term future.”
Mr Parker has called on politicians from all parties to join the campaign.
Trade union Unison added that local residents and hospital staff can show their support by signing the petition