PFI Hospitals run by HSBC pay £200 to fit wall socket

Britain’s biggest bank, HSBC, and its investors have made almost £100m from managing National Health Service hospitals where contractors routinely charge taxpayers inflated bills for simple tasks – such as £210 to fit an electrical socket or £200 to install a computer socket.

The charges, paid at hospitals run by the bank’s subsidiary infrastructure company, raise questions about lax controls in Labour’s private finance initiative (PFI), which has been used to build more than 100 hospitals over the past decade.

Richard Bacon, a Conservative MP who sits on the public accounts committee, said: “Anyone who works in the NHS will be dismayed that their managers are paying such rates. More than £200 to install an electric plug is just not on – it’s absolutely absurd, ridiculous.”

Since its launch in March 2006, the HSBC fund has acquired large stakes in 27 PFI projects, including Barnet, Bishop Auckland, Royal Blackburn, Stoke Mandeville, Central Middlesex and West Middlesex University hospitals.

It also manages the central London headquarters of the Home Office as well as schools and police stations. To boost its return to shareholders, the fund is based in Guernsey, the tax haven Channel Island.

Shares in the HSBC Infrastructure Company (HICL) have risen by 25% in the past two years, adding £58.75m to its value on the London stock market. During this period it has also paid more than £30m to investors through dividends.

Under PFI deals, contractors are appointed by project managers such as HICL to maintain the building and provide cleaning, catering and other services. Although they are paid a flat annual fee, they invoice the health trusts for any additional jobs not specified in the contract. In most cases, the hospital is obliged to use its contractor.

According to the National Audit Office, 59% of public sector managers said that contract variations worked out more expensive under PFI. A total of £180m was paid to PFI contractors for such extras in 2006.

Four of the hospitals in HSBC’s fund pay charges at rates far higher than those charged by normal tradesman.

– The Central Middlesex hospital in northwest London said that, on average, its contractor, Ecovert FM, charged £210 to install an electric socket.

– West Middlesex University hospital said it was typically charged £150 by Ecovert FM for the same task. An independent electrician located close to both hospitals in Harrow said a typical charge for replacing a socket was £40. The cost of installing a new one was £80.

– Royal Blackburn hospital said it was charged £198 by its contractor, Consort, to put in a datapoint – needed to plug a computer into an internal network. By contrast, West Middlesex University hospital said it was usually charged about £60 for the same service.

– West Middlesex University and Royal Barnet hospitals said they were normally charged about £100 to install a new lock – a third more expensive than local locksmiths.

A spokesman for the HSBC infrastructure fund said it took “great care in delivering the outsourced services”. Contractors said that each job was different and some seemingly straightforward electrical jobs could involve extensive rewiring.

The contract charges are often higher because PFI hospitals do not have enough handymen to do the job on site and have to call out the contractor’s staff. PFI hospitals typically have a maintenance staff one third smaller than other hospitals.

A spokesman for Ecovert FM said: “The type of wall construction, distance the new socket is from the mains supply, making good and redecoration work can greatly influence the cost of putting in a socket.”

84% of doctors polled by the website for The Sunday Times, said PFI had failed to deliver value for money for taxpayers. Only 6% of the 856 doctors polled believed that PFI was delivering at a fair cost.

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