The last Labour government left taxpayers with a £60 billion PFI bill for the scores of new hospitals it built during its 13 years in power, new figures reveal.
They shine a fresh light on the profligacy of the party’s use of Private Finance Initiative (PFI) schemes.

Labour ministers only paid £5 billion of the £65 billion “spent” on building more than 100 hospitals between 1997 and 2010.

The rest of the money, some £60 billion, must still be repaid by the taxpayer – with some of the gigantic debt lasting for more than 30 years.

The highest profile case concerns Barts and the London NHS Trust project, signed by ministers 2006, which provided two new hospitals in the capital.

By the time the coalition took office four years later nothing at all had been repaid – leaving an outstanding bill of £5.3 billion.

Jesse Norman, the Conservative MP, accused Labour of “extraordinary hypocrisy”. Their PFI bill for hospitals will cost every working family in Britain £3,600, according to Mr Norman’s figures.

PFI schemes were started by the last Conservative government under John Major in the early 1990s. However, they mushroomed under Labour with Gordon Brown, as Chancellor, using them as a way of meeting his own public borrowing rules.

Under the schemes, instead of the government raising money upfront, a private company is given a lengthy contract to build a school or hospital and then provides related ‘services’ to the public sector.

The Government leases the building for the length of the contract before it goes back into public ownership.

Any change, however small, to the building or service provided can be charged at sky high rates, allowing the company to make a huge profit.

New analysis of official figures shows that Labour initiated PFI contracts to build 103 new hospitals between 1997 and 2010. The party proclaimed at the time of the last election it has been responsible for a “new generation” of hospitals in Britain.

The total “unitary charge” payments for these hospitals was £5.1 billion. However, many projects will not be fully paid off for more than two decades – with the last one not “completing” until 2048.

The total accumulated “unitary charge” payments for the hospitals will be £65.1 billion – meaning that only 7.8 of the total was actually paid for before Labour left office.

Costs have escalated because of rising fees and additional charges for maintenance, cleaning and catering.

According to official figures, the NHS currently pays back £1.25 billion each year – but this figure will increase until 2030 when it is expected to hit £2.3 billion.

The Barts and the London NHS Trust project, to develop Barts into a “centre of excellence” for cancer and cardiac treatment and to build a new hospital at The Royal London , was started in 2006 – but payments will not even commence until 2013-14 and will not be finished until 2048.

By that time, it will have cost £5.3 billion despite only having a “capital value” of £1 billion, according to the Treasury.

Poorly negotiated PFI contracts have already led to examples of waste including Queen Elizabeth Hospital in Woolwich having to have 64 visits a year from pest controllers even if there are no pests to control. When there are pests, the trust must pay for further visits.

In another example, officials at the Central Middlesex Hospital in north west London said that, on average, contractors charged it £210 to install an electric socket.

Senior Labour figures including Gordon Brown strongly defended using PFI schemes while in power but, more recently, leading shadow ministers have admitted errors.

John Healey, the shadow health secretary, said earlier this month: “There is definitely a case for saying we were poor at PFI, poor at negotiating PFI contracts from the outset.”

Andy Burnham, a former health secretary who is now shadow education secretary, said last year: “We made mistakes. I’m not defending every pen stroke of the PFI contracts we signed.”

Mr Norman, a member of the Treasury select committee, said: “This shows extraordinary hypocrisy. The last Government claimed to be investing in public services.”

“In fact their true investment was less than less than one tenth of what they claimed. Labour didn’t manage to pay for even one new PFI hospital on their watch.”

“Labour maxed out the nation’s credit card with a £60 billion bill for new hospitals, loading future generations with staggering debt repayments.”

“After bringing the country to the brink of bankruptcy, they now have no credible plan to clear up the mess they left us with.”

“Their approach – to spend less without making any reforms at all – would leave the NHS in crisis.”

From: http://www.telegraph.co.uk/Labour-left-taxpayer-60billion-bill-for-new-hospitals

Under Labour’s Private Finance Initiative schemes, British taxpayers are committed to pay £229 billion for new hospitals, schools and other projects with a capital value of just £56 billion.
Several contracts are due to run for 60 years, documents released under freedom of information requests show, meaning taxpayers will be paying for the projects for generations to come.

Private contractors who agreed PFI deals with the Labour Government are set to make billions of pounds in profit, with some due to see returns of up to 71 per cent.

In the first of a series of reports, The Daily Telegraph discloses the heavy costs and administrative burdens caused by PFIs. The deals are a way of building large public projects using private finance, which were relied upon by the Labour government. The disclosures will lend weight to MPs calling on PFI companies to refund a share of their profits to the taxpayer.

The PFI deals include:

• A hospital which charged £52,000 for a job that cost £750. Demolishing a shelter for smokers resulted in the PFI contractor charging £2,600 a year for the “extra cleaning”.

• A hospital in Bromley, south London, which will cost the NHS £1.2 billion, more than 10 times what it is worth.

• Military dog kennels which would have ended up costing more per night than a room in the Park Lane Hilton, London. The deal to replace facilities at the Defence Animal Centre in Melton Mowbray resulted in the sacking of the contractor and the scrapping of the contract.

Under a PFI, a private contractor builds a school, hospital or other asset, then owns it for typically between 25 and 35 years, effectively renting it to the taxpayer for that time. In exchange, the contractor has responsibility for maintenance.

Treasury papers suggest that payments on PFI contracts already signed run until 2048. The Daily Telegraph has uncovered deals, signed in the late 1990s, which include special clauses meaning that they last for up to six decades.

So a 21 year-old leaving university this year will pay taxes for the PFI until they are almost 70. By then, some of the facilities will have been obsolete for years. Political pressure on the PFIs, introduced by John Major but greatly expanded when Gordon Brown was chancellor, was mounting last night after The Telegraph established the scale of profit-making by some of those involved.

An almost unknown City company, Innisfree, with only 14 staff, is the largest single player in the PFI market, owning or co-owning 269 PFI schools and 28 hospitals.

According to accounts filed at Companies House, Innisfree’s profit margin was 53 per cent last year. A successful FTSE 100 company makes margins of around 6 per cent. David Metter, the founder and chief executive of Innisfree, owns almost three-quarters of the company and collected pay and dividends of £8.6 million last year.

“Innisfree have made money like it is going out of style,” said Jesse Norman, the Conservative MP for Hereford. “A tiny number of individuals have made more money for less work than any other group of people I can think of.” Innisfree said its directors were at a conference in Chamonix yesterday and unable to comment.

Mr Norman heads a new cross-party group of MPs demanding that Innisfree and other PFI beneficiaries return a portion of their profits to the taxpayer. “It’s a scandal that so many projects have been so expensive to the taxpayer,” he said yesterday. “There is a great deal of excess value in the PFI which should properly be shared with taxpayers.”

Labour’s last health secretary, Andy Burnham, who was in charge of 221 PFI projects, admitted last year: “We made mistakes. I’m not defending every pen-stroke of the PFI contracts we signed.”

Innisfree co-owns the Princess Royal University Hospital in Bromley, opened in 2003, which cost an estimated £118 million to build and equip according to Treasury figures. However, Treasury calculations seen by The Daily Telegraph indicate the NHS will have paid Innisfree and its PFI partners a total of £1.21 billion for the hospital over the 35-year life of the contract, but this does include support services.

The National Audit Office says the deal will produce a return for the PFI contractors of 70.6 per cent.

Jean Shaoul, a professor of public accountability at Manchester University Business School, said using the private sector as an intermediary to raise finance to build hospitals and to run them is “far more expensive than if the Government were to do it itself”. Carl Emmerson, the acting director of the Institute for Fiscal Studies, said: “Where you can be very confident about the service you want for the whole period of the contract, as with a road, it can work. In schools and hospitals, where needs change, it’s much harder to get value for money.”

In Belfast, a school closed after seven years but the PFI contractor must be paid £370,000 a year for the next 16 years.

From:  http://www.telegraph.co.uk/Private-Finance-Initiative-hospitals-will-bring-taxpayers-60-years-of-pain

A survey by the RCN found thousands of jobs were already earmarked for cuts in an attempt to slash costs.

Health trusts are planning to cut thousands of staff “by stealth” to deliver £20bn of “NHS efficiencies”, according to a survey by the Royal College of Nursing. Labour reacted by promising that there would be more jobs in the health service at the end of the next Brown administration if it wins the election.

The move comes as Gordon Brown addresses the RCN’s four-day annual conference today. More than 4,000 nurses have gathered in Bournemouth for the event, which is expected to be dominated by NHS finances.

The nurses’ union has been riled by a warning from Sir David Nicholson, the chief executive of the health service, that up to £20bn of savings will have to be found by 2014.

A survey by the RCN of 26 of the 168 English health trusts revealed that 5,600 jobs were already earmarked for cuts in an attempt to slash costs. That figure could rise to more than 36,000 in a “worst-case scenario” if the trend was replicated across all hospital trusts, said Howard Catton, head of policy at the Royal College of Nursing. The loss of posts – including redundancies and staff not being replaced if they leave or retire – could happen over the next three years, he added.

In an online survey of 287 nurses earlier this month, the RCN said hospital wards were already operating with an average of 13% fewer staff than officially needed. Nine out 10 nurses said that patient care was being compromised by short staffing.

There is little doubt that the nurses’ union, which has 400,000 members, has political clout. Last year Brown became the first prime minister to speak at the conference in its 93-year history – to a warm reception by delegates.

Although health has not been a major focus of this election campaign, the issue of NHS job cuts is an explosive one for Labour. In 2006 the then health secretary Patricia Hewitt was jeered and slow-hand-clapped by nurses as she tried to address their fears about NHS deficits.

Andrew Burnham, the health secretary, told the Guardian that savings would come from wage restraint, cutting management costs by a third, and asking “some nurses and doctors to take on different roles in different locations outside of hospitals”.

“It is unlikely that we would need fewer people in five years in the health service. Labour will ensure sufficient funding to frontline NHS services so that they do not need to make any compulsory clinical redundancies and we will ask the NHS to co-operate across organisational boundaries and work towards ensuring this basic guarantee,” he went on. “Cutting doctors, nurses and frontline staff would be costly, counterproductive and would risk a return to the kind of NHS we saw under the Tories.”

The problem for Labour is that decisions on savings are being made at a local level. The RCN points out that managers at some trusts are already openly equating efficiency savings with job cuts.

In an open letter to staff, the chief executive at Salford Royal, a foundation hospital, said: “We are about to enter a financial crisis that could ruin all that we have achieved … this means reducing costs by about £16m a year [and] providing safe standards of service with about 250 fewer people for each of the next three years.”

The market reforms that Labour implemented have made it possible for hospitals to identify savings easily. Dorset county hospital, which made 28 posts redundant in March, admitted that its strategy to “attract more patients” with 300 new staff had failed, leaving a putative black hole of £11m in next year’s budget. The hospital issued a blunt press release: “These extra patients never came and so we are left with rising costs but without the income to cover them.” .

The Conservatives say that their promise to outspend Labour on the NHS insulates them against the charge that the health service is not “safe in their hands”. They say that thousands of NHS medics will lose their jobs over the next five years under Labour’s “secret” cost-cutting plans, which would see 651 fewer doctors and 2,050 fewer nurses across England.

Disclosures made under the Freedom of Information Act at the request of the Tories show half of NHS trusts that responded were planning reductions in the numbers of full-time equivalent doctors and nurses.

The shadow health secretary, Andrew Lansley, said: “We will back the NHS. Conservatives will increase funding for the NHS each year in real terms. So instead of Labour’s cuts to doctors and nurses, we will support the recruitment of staff we need, like specialist nurses, midwives and health visitors.”

From: http://www.guardian.co.uk/politics/2010/apr/26/health-trusts-planning-job-cuts

Labour was caught up in a new row over its use of personal data after emailing NHS professionals using their work addresses to ask for their support.

The move emerged after the party had been criticised for delivering campaign leaflets on the party’s cancer policy to 250,000 women, some of whom had the disease.

The postcards, produced by Tangent, which works for the Labour Party, said that the Tories would scrap a Labour guarantee that patients would see a cancer specialist within two weeks.

One of those who received the latest communication, a doctor, has complained that senior Labour figures are trying to pressure her into publicly backing the party against her will.

Labour is trying to organise a round robin letter from senior figures in the NHS saying that only Labour can be trusted to look after the health service.

The Twickenham GP, whose name has been withheld for fear of retribution, contacted the Conservatives in fury at the attempt to make her sign a petition.

The GP expressed concern that Amy Fowler, a development officer for the Labour Party, obtained her work e-mail address, which she claimed is not publicly available.

The petition that the doctor was being asked to sign, which is likely to have been forwarded to a newspaper, committed members of the health service to explicitly backing Labour.

It says: “We are a group of clinicians, staff and campaigners working in and with the NHS. Every day, every week, we see first-hand the quality of care which the NHS gives to patients when they need it most. At this election we are backing Labour as the party of the NHS which will do the most to improve it for all patients.

“There is more to do to improve the NHS, but it is this Labour Government which has shown commitment to the NHS by investing in more doctors, nurses, more services and new hospitals and GP practices. It is Labour who are making the tough decisions that will allow our NHS to be protected in the future from spending cuts which would harm patient care. And only Labour are prepared to put patients first, for example with guarantees to rapid access to cancer specialists and cancer tests.

“For these reasons we believe only Labour can be trusted to protect and improve our NHS at this election.” The e-mail came from Martin Rathfelder, from the Socialist Health Association, but was signed by Ms Fowler.

The GP said: “[This was] totally unsolicited by me. I have never been to any socialist events and would not mix my personal views with work. He says he got it from a list of trainers which is possible. I feel this is an absolute abuse of a publicly funded service. Don’t know anyone who would have nominated me.”

She added: “I am angry that they have e-mailed me at my work e-mail address and would very much like to know how they have obtained confidential NHS e-mail addresses. You might be interested to investigate a. where they obtained these addresses [and] b. whether it is appropriate to use the addresses in this party political way. Needless to say I do not support the petition!”

Paul Beresford, the Tory MP who represents the doctor, said: “This is a grossly unfair attempt by the Labour Party to draw NHS clinicians into political campaigning. They feel under threat of blacklisting if they do not sign up.” Andrew Lansley, the Shadow Health Secretary, said: “The Labour Party need to explain how they have received these NHS e-mail addresses. If they are using the NHS private e-mail system to reach NHS staff for party political campaigning it is an abuse.

“We know from recent research that NHS staff support the Conservatives and not Labour because we are now more trusted to improve the NHS.”

Mr Lansley has written to Andy Burnham, the Health Secretary, to demand that he apologises for the cancer postcards. He said: “Cancer sufferers across the country have condemned Labour’s scaremongering breast cancer leaflets, but still Gordon Brown and Andy Burnham refuse to apologise.”

When asked where he got the address, Mr Rathfelder replied that he obtained it “from a list of training practices”. However the GP said “I still feel it is an abuse of the NHS.”

From: http://www.timesonline.co.uk/tol/news/politics/article7095225.ece

Tens of thousands of NHS workers would be sacked, hospital units closed and patients denied treatments under labour’s secret plans for £20 billion of health cuts.

The sick would be urged to stay at home and email doctors rather than visit surgeries, while procedures such as hip replacements could be scrapped.

The plans have emerged as health chiefs draw up emergency budgets that cast doubt on pledges by Gordon Brown to protect “front line services” in the NHS.

Documents show that health chiefs are considering plans to begin sacking workers, cutting treatments and shutting wards across the country.

The proposals could lead to:
* 10 per cent of NHS staff being sacked in some areas.
* The loss of thousands of hospital beds.
* A reduction in the number of ambulance call-outs.
* Medical professionals being replaced by less qualified assistants.

The plans are contained in a series of internal NHS documents uncovered by The Daily Telegraph.

The final details of the plans are not due to be announced until the autumn, well after the country has gone to the polls for the general election.

The Conservatives and health campaigners said the public deserved to know the true extent of cuts at their local surgeries and hospitals before voting.

Last year all English health authorities were ordered by Sir David Nicholson, the NHS chief executive, to reconsider their plans after the recession forced the Government to freeze health spending from April next year.

This left a ”black hole’’ of up to £20 billion in health budgets up to 2014, prompting the drawing up of new proposals by the 10 strategic health authorities (SHAs).

They had until Friday to submit their plans to Andy Burnham, the Health Secretary. He is under pressure from the Treasury to show how money will be saved to help bring down Britain’s record £167 billion deficit.

In Wednesday’s Budget, Alistair Darling, the Chancellor, repeated that the £20 billion would come through “efficiency savings” and not key services.

Documents produced by several of the SHAs show how the cuts are, in fact, expected to fall on hospital services.

In the South East Coast region, which covers Surrey, Kent and Sussex, up to £1.6 billion must be saved.

A document marked “restricted” and circulated among SHA board members suggests 10,000 of the region’s 100,000 NHS workers may lose their jobs. “The new financial environment demands that the trend in workforce growth must be reversed,” it said, adding bosses must reduce employee numbers by 10 per cent “or further”.

The document said staffing in the acute sector, covering hospitals, “can be expected to decline faster and further” than elsewhere.

Job losses will be “starting in the coming year”, it states. Mr Brown has repeatedly promised Labour will not start making significant cuts to public spending until 2011. A spokesman for the South East Coast SHA said the document was a discussion paper and not a final plan.

In London, which faces £5 billion in cuts, documents show managers believe up to £2 billion can be saved from community care budgets, which cover GPs’ surgeries. This would include “changing how patients get in contact with and receive services, such as through greater use of the internet and email”.

An internal presentation by NHS Yorkshire and the Humber, which spans Sheffield, York, Hull and north Lincolnshire, made similar suggestions. The SHA, which is expected to make about £2 billion in cuts, proposed directing more patients to “teleservices such as NHS Direct”. Meanwhile, £450 million could be saved in London by banning clinical procedures “that have little or no benefit to those receiving them, for example some joint replacements”.

NHS North West, which oversees Greater Manchester and Liverpool, is expected to make about £2 billion savings. It is preparing to close an A&E unit in Rochdale during evenings before scrapping it altogether next year.

In the East region, covering Bedfordshire, Cambridgeshire, Essex, Hertfordshire, Norfolk and Suffolk, up to £2 billion is to be cut. The SHA proposes shifting services out of hospitals and making social workers take over some treatments. It is estimated that savings of about £2.4 billion will need to be made by NHS West Midlands, £2 billion in the South West, £1.3 billion in South Central, £1 billion in the North East and £800 million in the East Midlands.

All the Department of Health spokesman could say- as a way of confirmation: “We will be clear with trusts that they must not make short term cuts that harm patient care.”

From: http://www.telegraph.co.uk/health/healthnews/7529454/Hospital-wards-to-shut-in-secret-NHS-cuts.html