UNISON Calls For Inquiry As Another PFI Hosptial Runs Out Of Cash
UNISON, the UK’s largest union, is calling for a full inquiry into the disastrous decision by the Board of Peterborough and Stamford Hospitals Foundation Trust to sign up to a costly Private Finance Initiative (PFI) scheme that has brought the Trust to the brink of bankruptcy.
It currently has cash to pay its bills only to the end of November, and has admitted that the cost of the PFI – at more than 20% of the Trust’s declining budget – is unaffordable.
UNISON’s call for an inquiry comes as the special administrator, called in to address runaway debts in a South London hospital trust bankrupted by PFI, has announced far-reaching cuts and reorganisation coupled with government subsidies to keep the two PFI deals afloat.
And it flows from a fresh report researched for UNISON on the impact of PFI on hospital Trusts in the East of England, where three major hospital schemes – in Norwich, Peterborough and Chelmsford – which cost £642 million to build are set to cost at least £4.25 billion by 2043.
While the Norfolk & Norwich PFI deal has been described as the ‘unacceptable face of capitalism’ and is set to cost almost ten times the initial cost of the hospital, the Peterborough scheme is clearly the one that has done the greatest proportional damage. Its binding 30-year contract to make increasing payments on a massive £335m PFI hospital and care centre was signed off by the Trust in 2007 despite warnings by Monitor, the financial Trust regulator and from UNISON and local campaigners that it was unaffordable.
The plan was rubber stamped by the Department of Health and the Treasury – but within weeks of the new hospital opening, the Trust was plunged into a massive deficit, and it is now dependent on continued subsidies to stay solvent.
Nobody has taken any blame for the decisions that were taken then, and the directors and Board members who signed away almost £2 billion over 30 years for a £310m hospital have faced no sanction or public criticism, and are free to go and do the same elsewhere.
The UNISON report outlines the knock-on consequences of these various schemes, including the problems created by relatively small PFI schemes in Ipswich and the troubled Hinchingbrooke Hospital, where growing, fixed costs and long-term liabilities have hampered attempts to get hospitals into financial balance.
It points out that the exception that proves the rule is Colchester University Hospitals Foundation Trust which decided late in the day that a £127m PFI project was unaffordable, and is now in comfortable surplus compared with the chronic deficits of those which pressed ahead with PFI.
UNISON’s Eastern Regional Head of Health, Tracey Lambert, said:
“PFI is sucking the life out of our NHS. The costs spiral ever upwards, regardless of the income of Trusts recieve. £850m of new buildings are already set to cost more than £5 billion. Jobs and patient care are being sacrificed to keep PFI projects afloat and keep profits flowing to bankers and private equity investors. That can’t be right.
The problem is made worse by the government’s £20 billion cuts, and the Midlands and East Strategic Health Authority’s plans for years of cuts in hospital admissions which will starve our hospitals of the cash they need to keep services open.
The report also warns that two more massive plans are waiting in the wings, a £206m rebuild of Papworth Hospital and a £300m project in Watford: we can already predict that these are not affordable on PFI.
We must learn from previous failures instead of repeating them, and ensure public funding is used in place of PFI. Even mortgage finance at 6% would be far cheaper, with affordable annual payments, than the soaring cost of PFI.
But to make sure we get a change of policy, we want to expose to public view just what was done in Peterborough, who signed off the deal and who rubber-stamped it. That’s why we want an inquiry, to put an end to this cavalier attitude that signs away taxpayers’ money with no consequences.”
Source: UNISON
