MPs want greater scrutiny of PFI hospitals to prevent more waste

Hospitals built under the Private Finance Initiative (PFI) must be subject to much "closer and sustained scrutiny" if millions more pounds are not to be wasted, the Public Accounts Committee said. Estimated capital costs for 17 PFI schemes approved by the end of 2005 have more than doubled - up by some £4bn to £13bn.

The health department has offered several explanations, including high inflation in the construction industry, the decision to provide more single rooms and expansion in the services planned. But Edward Leigh, the committee's chairman, said the department "must crack down" where the cost of schemes is forecast to rise.

Mr Leigh was commenting as the committee published a report into the plan to build a £900m PFI hospital in Paddington, London, on which almost £15m was spent before being pulled.

That, Mr Leigh said, was the result of "appalling planning and forecasting" locally, combined with the department failing to challenge the scheme properly.

A review of big PFI hospital projects is under way with the capital programme set to be scaled back from £13bn to about £7bn-£9bn.

Through that, said the department, the closer oversight the committee wants is already being provided. In turn, that should prevent a repeat of the Paddington Campus failure, it said.

The committee said the department's "hands off" approach meant "there has been too little control of the capital investment programme". It "remains to be seen" whether the review will be sufficient "to get a grip on a programme which continues to be managed by the NHS locally".

http://www.ft.com/cms/s/2e0262ba-b007-11db-94ab-0000779e2340.html

Health Direct applauds the Public Accounts Committee's decision to scrutinise the proposed PFI NHS plans.

Only last week (Jan 22, 07) we reported that PFI firms make £23bn profits from NHS as the private sector will make £53bn in profits and interest over the next 30 years by building NHS hospitals, campaigners have calculated.

Under the private finance initiative, a company builds a hospital and then gets "rent" from the NHS for a set term. A report by the Keep Our NHS Public claims the Labour government is carrying out "patchwork privatisation" of the NHS.

"When the NHS is making cuts and closures across the country, it's time to ask if this is the best use of public money" said Alex Nunns of Keep Our NHS Public

It says: "Unlike the Thatcher privatisations of the 1980s, the whole NHS is not being put up for auction. Instead, it is being parcelled up into bite-sized pieces and handed over to private control bit by bit. This is happening on such a scale and at such pace as to make it a unique phenomenon."

Alex Nunns, of Keep Our NHS Public, said: "Unbeknown to the public, the NHS is paying astronomical sums of money to the private sector. When the NHS is making cuts and closures across the country, it's time to ask if this is the best use of public money."

The figures, which emerged in a response to a Parliamentary Question tabled by Shadow Health Secretary Andrew Lansley, showed that the NHS would pay a total of £53bn to the private firms involved.