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

On the morning after Gordon Brown’s “disastrous” day- Health Direct sends a message to him: laughter can do as much good for your body as a jog around the park, scientists have claimed.

Doctors describe “mirthful laughter” as the equivalent of “internal jogging” because it can lower blood pressure, stress and boost the immune system much like moderate exercise.

A number of volunteers asked to watch just 20 minutes of comedies and stand up routines saw a dramatic drop in stress hormones, blood pressure and cholesterol.

That means that the “laughercise” could be a way to reduce heart disease and diabetes. It is especially important to the elderly who may find it hard to perform more physical activities.

Dr Lee Berk, from Loma Linda University, California, who led the study, said that emotions and behaviour had a physical impact on the body.

He concluded “that the body’s response to repetitive laughter is similar to the effect of repetitive exercise”.

“As the old biblical wisdom states, it may indeed be true that laughter is a good medicine,” he said.

Dr Berk, who has been studying the effects of laughter for more than two decades, said that the high you get from a giggling fit was similar to the endorphin rush from exercise.

He has shown how it can reduce your risk of a heart attack and diabetes and generally regulate the body’s vital functions.

It is also an important way to de-stress after a day’s work, he believes.

In the mid-1990s, Dr Berk found that laughter increases the number of natural killer cells in cancer patients. Natural killer cells are the body’s way of fighting tumours.

For the latest study he had 14 volunteers watch either a stressful 20 minute clip of the war film Saving Private Ryan or an extract from a comedy or stand up routine.

Blood samples taken afterwards showed the reduction in stress hormones and increase in immune T cells for those who watched the comedy. Blood pressure testing showed it was down too with this group.

In 1997, Dr Berk performed experiments with diabetic heart patients. One group watched a television comedy each day for one year, another did not.

The difference in outcomes was stunning. At the end of the year, the comedy viewing group required less blood-pressure medication.

Eight per cent of the comedy viewers had another heart attack, compared with 42 per cent of those who did not regularly view it.

An earlier study also showed that watching just half an hour of comedy a day slashes levels of stress hormones and compounds linked to heart disease.

Levels of compounds linked to hardening of the arteries and other cardiac problems had also dropped, while levels of ‘good’ cholesterol – thought to protect against heart disease – rose.

An earlier study by Dr Berk also showed that the mere anticipation of a good laugh can benefit health.

The expectation of watching a comedy video was enough to raise levels of feel-good endorphins and boost amounts of a hormone that helps our immune system fight infection.

The findings were presented at the Experimental Biology conference.

From:

http://www.telegraph.co.uk/Laughter-really-is-the-best-medicine-as-doctors-find-it-can-be-as-healthy-as-exercise

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