NHS under pressure with more trusts in the red

The number of NHS trusts in financial difficulty has more than doubled in a year an Audit Commission report warns.NHS under pressure with more trusts in the redThe NHS ended 2011-12 with a £1.6 billion surplus- but the differences between solvent trusts and struggling ones is growing, warns the Audit Commission.

Hospitals on the outskirts of London and across the south east are struggling to balance their books, according to the report, while those in the centre of the capital, the Midlands and northern England are tending to fare much better.

Across England, the Audit Commission found 31 ended the 2011-12 financial year with a deficit. That compares with just 13 at the end of the previous year.

The NHS Financial Year 2011-12 report, published today, notes that most trusts reported “an improved financial position”, with the NHS overall recording an unspent “surplus” of £1.6 billion, up on £1.5 billion the previous year.

“However, there is a growing difference between those organisations that are struggling financially and those that are not,” it goes on.

It warns of “stark geographical differences” such as those “between the relatively financially comfortable inner London NHS bodies and financially harder pressed outer London bodies”.

That fact was baldly revealed this summer when South London Healthcare NHS Trust, responsible for three hospitals in south east London and metropolitan Kent, effectively went bust.

It was placed under the authority of a special administrator because it was losing £1 million a week.

The Audit Commission report said the trust had the largest deficit of any NHS body, at £65 million for the year. Its cumulative deficit is £148 million.

Part of the problem stems from two public finance initiatives (PFIs) costing it £61 million a year in interest.

But the report highlights serious financial problems at other hospital trusts on the edge of the capital, notably in north west London.

Senior NHS figures believe long term problems are now coming to the fore. Inner London hospitals have been able to pull in talent, patients and funding due to their reputations, but elsewhere in London and the south east, some hospitals without star attractions have withered.

There are seriously troubled trusts outside the south east too. The report mentioned Peterborough and Stamford Hospitals NHS Foundation Trust, which has a £46 million deficit.

Andy McKeon, managing director of health at the Audit Commission, said: “While nationally the NHS appears to be managing well financially, and preparing itself for the changes and challenges ahead, a number of primary care trusts and trusts are facing severe financial problems.

“The Department of Health and other relevant national authorities need to focus their attention on the minority of organisations whose financial position is deteriorating, and on their geographical distribution and service standards.”

The 31 trusts in deficit include 21 foundation trusts, which are financially independent of the Department of Health, up from six in 2010-11.

The report also found the health service was on track to make £20 billion of efficiency savings by April 2015, and was “in a good position to meet the challenges of spending within its limits”. However, it warned there was “no room for complacency”.

A Department of Health spokesman said: “We know the NHS is facing even greater pressures, not least from rising demand and costs.

“That’s why we are investing an extra £12.5 billion in the NHS, modernising it and improving efficiency while at the same time improving choice for patients to drive up the quality of patient care.”

From:  http://www.telegraph.co.uk/NHS-under-pressure-with-more-trusts-in-the-red

Hospital PFI project went ahead despite warnings

A hospital now losing £44 million a year was allowed to go ahead with a private finance deal to build new premises despite the Government being warned that the project was unsustainable.Hospital PFI project went ahead despite warningsA report, commissioned by the hospital regulator, Monitor, reveals that strong concerns were raised that Peterborough Hospital would not have the money for the new buildings.

Despite the warning – to both the Treasury and the Department of Health – the go-ahead was given for the project, which is now costing the hospital trust £22 million a year to service.

Last year, Monitor found Peterborough to be in “significant breach” of the terms of its authorisation and warned that work on a turnaround plan for the hospital had “not progressed at the necessary pace”. In February, the Government was forced to establish a £1.5 billion bailout fund to help pay the debts created by prohibitively expensive PFI schemes, of which Peterborough was one.

Peterborough is judged at high risk of financial failure by Monitor and is likely to have to cut or reconfigure the services it provides and make staff redundant to balance its books.

In the report, from the accountants KPMG, into what went wrong at Peterborough, auditors conclude that while Monitor was aware of the risks of the project it was powerless to stop the Government from giving it approval.

It is embarrassing for Labour because, at the time of the approval, Andy Burnham was a Minister of State in the Department of Health. He is now shadow Health Secretary.

The report reproduces a letter sent by the then head of Monitor, Bill Boyes, to the hospital trust in 2007 and copied to officials in both the Treasury and the Department of Health, warning of the dangers of the project.

But because Monitor had no power to intervene, it went ahead and it was only in 2010, after the hospital had been built, that the true financial picture emerged.

It has now emerged that up to 30 NHS trusts could be forced to merge, devolve services into the community and make jobs cuts as part of a radical restructuring of hospital care – partly as a result of the cost of PFI.

The Department of Health said it considered 21 hospitals to be “clinically and financially unsustainable”.

Commenting on the report, a Department of Health source said: “This was a disastrous Labour PFI blunder. Labour was warned repeatedly by their own regulator that this PFI deal could bankrupt Peterborough Hospital but they pressed on regardless.”

A spokesman for Mr Burnham said he would not comment until he had seen the full published report.

From: http://www.independent.co.uk/hospital-pfi-project-went-ahead-despite-warnings

NHS is paying for Labour’s dodgy deals

The NHS faces huge costs because of flaws in Private Finance Initiative (PFI) contracts agreed by the previous administration.NHS is paying for Labour’s dodgy dealsYesterday afternoon, the Queen opened the South West Acute Hospital in Enniskillen. She will doubtless have been impressed: the facility, the first to be built in Northern Ireland for more than a decade, is a gleaming shrine to 21st century healthcare.

What may not have been mentioned, however, was that the £276 million hospital was constructed not with public funds, but by a consortium under the Private Finance Initiative – and that the deal to build it included a 30 year “facilities management” contract for one of the firms involved.

The Enniskillen deal may be a shining example of value for money.

But many PFI contracts are not.

Ministers are on the verge of taking over the South London Healthcare Trust, after it proved unable to cope with a bill of more than £60 million a year in interest alone.

One of the trust’s three hospitals, the Princess Royal in Bromley, took £118 million to build, yet will cost roughly £1.2 billion. All told, Labour signed 103 PFI deals for the NHS, at a value of £11.4 billion and an eventual price of more than £65 billion.

The diversion of that money away from patient care will put inexorable pressure on budgets, to the point where some hospitals will crack under the strain.

PFI, in short, is not merely about £22 light bulbs and £875 Christmas trees – it is about budgetary incompetence on a monumental scale.

And it comes as little surprise that it can be traced back to Gordon Brown, who turbo-charged the Tories’ fledgling public-private partnerships in order to buy schools, hospitals and more on the never never.

This allowed him first to evade spending restrictions, and later to splurge on public-sector salaries; in the mean time, the credit card bills got higher and higher.

Many PFI deals delivered what was promised – but where things have gone wrong, as in Bromley, the contracts were often drawn up so poorly that there is little the Coalition can do. Ministers have renegotiated some deals to claw back costs, and should make every effort, and twist every arm, to do more.

They should also remind voters of the ignominious parts played in this debacle by Ed Miliband, Andy Burnham and Ed Balls.

But, above all, they need urgently to produce a way of funding infrastructure that draws on the private sector’s strengths rather than exploiting the public sector’s weaknesses.

Jesse Norman, the Tory MP who has led the way in exposing PFI’s flaws, points out that the state must spend more than £200 billion on new infrastructure over the coming decade, and cannot do so without private help.

The Treasury is beavering away on a new model of funding. If it repeats the errors made by Labour, the cost to the nation will be heavy indeed.

From: http://www.telegraph.co.uk/The-NHS-is-paying-for-Labours-dodgy-deals

Coalition ministers take over bankrupt PFI hospitals

One of Britain’s biggest hospital trusts is “on the brink of bankruptcy” and will be taken over by ministers in the coming weeks after being saddled with large debts from PFI deals.Coalition ministers take over bankrupt PFI hospitalsSouth London Healthcare Trust, which runs three hospitals in the capital, is losing more than £1 million a week and will be run by a troubleshooter and a new management team.

It was formally warned last night that it would be the first NHS body to be taken over by Whitehall-appointed administrators under the “unsustainable providers’ regime”.

More than 20 other hospitals in financial difficulty also face being taken over unless they take urgent steps to turn around their fortunes.

A government source said: “This hospital trust was brought to the brink of bankruptcy by Labour. It is losing £1 million a week, money which could be spent on 1,200 extra nurses for local people.

“The standard of care that patients receive at the hospital trust is not good enough, although there have been some improvements in recent months. It is crucial that those improvements are not put at risk by the challenge of finding the huge savings that the trust needs to make.

“We don’t want a repeat of Stafford, where crude attempts to balance the books had tragic consequences.”

“This will clearly be a difficult and controversial process, but we are determined to turn this trust around so patients in south-east London get the care they deserve.”

The trust runs three hospitals – Queen Mary’s in Sidcup, Queen Elizabeth in Greenwich and Bromley – serving more than a million people and employing more than 6,000 staff.

However, it is thought to have been crippled by the costs of two Private Finance Initiatives used to rebuild two of its hospitals. The schemes, which totalled more than £1 billion, cost more than £60 million annually in interest payments alone.

Draft financial plans submitted by the hospitals to the Department of Health show that it faces a shortfall in its accounts of between £30 million and £75 million annually over the next five years.

Stephen Dorrell, chairman of the health select committee, said in theory under PFI the public and private sectors were meant to share the financial risk of ventures, but this did not happen.

“I regret the fact that contracts were signed that paid private sector costs when the public took the risk. That is indefensible,” he said.

A senior Whitehall official visited the hospital to deliver a letter from Andrew Lansley, the Health Secretary, warning bosses that the legal process to effectively take over the trust had begun. New management is expected to be installed next month.

Mr Lansley’s letter said: “A central objective for all providers is to ensure they deliver high quality services to patients that are clinically and financially sustainable for the long term.

“I recognise that South London Healthcare NHS Trust faces deep and long-standing challenges, some of which are not of its own making. Nonetheless, there must be a point when these problems, however they have arisen, are tackled. I believe we are almost at this point.

“I appreciate that any decision to use these [special] powers will be unsettling for staff, but I want to stress that the powers are being considered now so that patients in south-east London have hospital services that have a sustainable future.

“I am determined to improve health care services for patients in south-east London and will take whatever difficult steps are necessary to achieve this.”

PFI indebted hospitals to be given £1.5 billion lifeline

Seven English NHS hospital trusts with debts caused by Labour’s Private Finance Initiative (PFI) debts are to have access to a £1.5 billion government bailout fund.PFI indebted hospitals to be given £1.5 billion lifelineThe subsidy will be available over the course of 25 year long contracts.

Trusts will have to show they have improved efficiency and provide good care in order to access the money.

The seven trusts are: Barking, Havering and Redbridge, St Helens and Knowsley, South London, Peterborough and Stamford, North Cumbria, Dartford and Gravesham and Maidstone and Tunbridge Wells.

There are 100 plus PFI schemes, where private firms pay to build hospitals, leaving the NHS to pay an annual fee or “mortgage”.

Coalition ministers have attacked Labour over its deals, but the National Audit Office recently reported that for most trusts with financial difficulties PFI was just part of the problem.

The Department of Health says without the funding, services at the hospitals would be put at risk.

Health Secretary Andrew Lansley said: “We need to balance the accountability of the NHS at local level to live within its means on one hand, with recognising that there is a legacy of debt for some trusts with PFI schemes.”

NHS PFI debts rising by 5pc a year

Taxpayers are paying five per cent more per year for hospitals built under Labour’s Private Finance Initiative (PFI) because the debts are linked to inflation.NHS PFI debts rising by 5pc a yearCurrently the combined debt for some 800 PFI projects, including 103 PFI hospitals in England, stands at about £300 billion, according to makers of the programme.

When a BBC Panorama programme contacted 85 hospital trusts with PFI deals, it found 80 of them said they were having to make increased payments due to inflation.

When most of the deals were set up, inflation was low and the outlook was for that to continue well into the future.

Most trusts decided not to protect their debts from rising inflation, against the advice of the Treasury.

By contrast, the companies building the hospitals insured themselves against losses due to inflation.

The PFI deals, under which companies build hospitals to be leased back by the NHS, typically run for 30 years.

Margaret Hodge, the Labour MP who now chairs the Public Accounts Committee, admitted to the programme: “We should have been much more transparent about the costs. I think we got the balance wrong.”

Richard Bacon, a Conservative member of the committee, said he thought taxpayers were being “ripped off”.

A spokesman for the Treasury said that protecting PFI debts against inflation was “not mandatory … because it is subject to individual authorities undertaking their own project assessments”.

He added said: “The Government has consistently expressed concerns about the misuse and costliness of PFI. That is why, less than two weeks ago, the Government launched a fundamental review of the PFI model, which will see the end of PFI as we know it.”

Labour wasted cancer cash on NHS salaries and PFI schemes

Cancer care on the NHS lags behind that in many other developed countries because Labour wasted billions of pounds on PFI schemes, bureaucracy and inflated salaries for managers.Labour wasted cancer cash on NHS salaries and PFI schemesA report by the Organisation for Economic Co-operation and Development (OECD) has found that, despite record spending on health care, cancer survival rates in Britain are worse than in Slovenia and the Czech Republic.

Survival rates for breast cancer, prostate cancer and cervical cancer were below the average for the 34 developed countries in the study.

Mr Lansley lays the blame for the poor performance on the previous government’s failure to make sure that extra investment in the NHS reached the front line. He claims patient care was ignored in favour of increased salaries and botched computer systems.

Writing in The Daily Telegraph, Mr Lansley says: “Unfortunately this report shows how much work there is to do to deal with Labour’s legacy of neglect and mismanagement of our NHS.

“They hugely increased spending on the Health Service, but wasted much of it on managers, failed IT projects and unsustainable PFI projects.

“They failed to focus on what really matters – patients – which is why we still have some of the worst cancer outcomes amongst comparable countries.”

Under Labour, spending on the NHS trebled, reaching almost £100 billion in 2009, but money for treating cancer still lags behind much of the rest of the world.

A report by the Policy Exchange think tank last year found that England spent around 5.6 per cent of its health care budget on cancer care, compared with 7.7 per cent in France, 9.6 per cent in Germany and 9.2 per cent in America.

In September it emerged that private finance initiatives, introduced by Labour to fund capital projects, have left 60 NHS hospitals on the “brink of financial collapse”. Meanwhile, the pay of NHS chief executives has risen, with typical earnings now more than £150,000.

The OECD figures reveal that the best breast cancer survival rates were in the US, where 89.3 per cent of women were alive five years after being diagnosed. The average across all OECD countries was 83.5 per cent, while in the UK it was 81.3 per cent.

Survival rates for cervical cancer were worse. Norway topped the table with 78.2 per cent still alive after five years, compared with 58 per cent of women in the UK. There were also more hospital admissions for asthma and other lung conditions than the average and infant mortality was higher.

The report also showed that consultations by doctors have fallen, and were below he OECD average in 2009.

Katherine Murphy, the chief executive of the Patients Association, said: “The NHS provides some excellent care but it does fall down on many counts. We know from patients phoning our helpline that the quality of care that they have experienced can be very poor and sometimes it is downright neglectful.

“Rather than trying to tackle the issue of poor care, the Department of Health is demanding that the NHS makes £20 billion of efficiency savings while spending a million pounds a day on a reform plan that doctors, nurses, patients and NHS managers all say risks irrevocably damaging the NHS.”

From:  http://www.telegraph.co.uk/Cancer-cash-wasted-on-NHS-salaries

Glasgow Royal Infirmary protest at PFI parking fee hike

Health workers at a Glasgow hospital are staging a protest later over a 113% increase in parking fees.Glasgow Royal Infirmary protest at PFI parking fee hikeThe monthly cost of a permit for the multi-storey at Glasgow Royal Infirmary (GRI) has risen from £42 to £89.50.

Parking fees at most Scottish hospitals were abolished in 2009 but remained at three sites where car parks were built under Labour’s Private Finance Initiative (PFI) .

NHS Greater Glasgow and Clyde said a limited number of £25 permits were available for staff who needed cars.

The multi-storey car park, which opened in 2005, is owned by Impreglio Car Parking and managed by Apcoa under contract to the health board.

Approximately 940 subsidised permits are issued with priority given to staff such as consultants who need to travel between different sites.

Other staff can apply for these permits, but demand outstrips availability and not all applicants are successful.

At the time, Scottish Health Secretary Nicola Sturgeon urged health boards to limit and reduce the charges until the contracts came to an end.

In September, the issue was raised in the Scottish parliament by Glasgow Kelvin MSP Sandra White.

She was told that the first minister sympathised with the staff, but the Scottish Government was bound by the terms of the PFI agreement signed by the previous Labour administration.

A spokeswoman for NHS Greater Glasgow and Clyde said: “Unfortunately, as the car park is privately-owned, we do not have any control over any tariff increases that Impreglio choose to make.”

The protest was due to take place at the hospital car park from 13:00.

From: http://www.bbc.co.uk/news/uk-scotland-glasgow-west-15622723

NHS hospitals crippled by labour’s PFI scheme

Patient care is under threat at more than 60 NHS hospitals which are “on the brink of financial collapse” because of costly private finance initiative schemes the Health Secretary warns.NHS hospitals crippled by labour's PFI schemeAndrew Lansley says he has been contacted by 22 health service trusts which claim their “clinical and financial stability” is being undermined by the costs of the contracts, which the Labour government used extensively to fund public sector projects.

The trusts in jeopardy include Barts and the London, Oxford Radcliffe, North Bristol, St Helens and Knowsley, and Portsmouth.

Between them the trusts run more than 60 hospitals which care for 12 million patients.

There is already evidence that waiting lists for non–urgent operations have begun to rise as hospitals delay treatment to save money. Adding to this are growing fears over the impact of the financial crisis on care this winter.

Under the PFI deals, a private contractor builds a hospital or school. It owns the building for up to 35 years, and during this period the public sector must pay interest and repay the cost of construction, as well as paying the contractor to maintain the building.

However, the total cost of the deals is often far more than the value of the assets. As a result, Mr Lansley says, the 22 trusts “cannot afford” to pay for their schemes, which in total are worth more than £5.4billion, because the required payments have risen sharply in the wake of the recession.

Mr Lansley said: “Over the last year, we’ve been working to expose the mess Labour left us with, and the truth is that some hospitals have been landed with PFI deals they simply cannot afford.

“Like the economy, Labour has brought some parts of the NHS to the brink of financial collapse. Tough solutions may be needed for these problems, but we’ll help the NHS overcome them. We will not make the sick pay for Labour’s debt crisis.”

He said hospitals would not be allowed to collapse financially.

“There are many hospitals that are well run, do not have a legacy of debt and do have projects which are perfectly sustainable. My point is that we have looked since the election and are working together with individual trusts to arrive at a place where they are financially, and in terms of the quality of their services, sustainable for the future. We can only do that if we work closely with them,” he said.

“This is about making very clear that we are not only working on unsustainable PFIs, but also working with legacy debt that the NHS has been left with, working on the IT programmes which were on an unsustainable scale of contractual commitments that didn’t meet the need of the NHS’s customers.

“Across the board, we have to tackle Labour’s legacy of poor value formoney and debt.”

Over the next few weeks, Department of Health officials and executives at the 22 trusts will develop detailed plans for dealing with the crisis. Their proposals are expected to include significant cost–cutting and the renegotiation of PFI contracts.

Money will also be moved from NHS trusts that are in better financial shape to cover the debt costs at those that are struggling. However, officials are braced for the need to use Whitehall funds to bail out some hospitals.

Among the trusts which have contacted Mr Lansley to inform him of their severe financial problems are several London institutions, including South London Healthcare, Barking, Havering and Redbridge, and North Middlesex.

Outside the capital, other trusts to have approached the health department include Wye Valley, Worcester Acute Hospitals, Mid Yorkshire, and Walsall.

After the general election last year, Mr Lansley ordered officials to establish why some NHS hospitals were under–performing. The health department is assessing the financial position of every hospital. It is understood that the PFI costs have emerged as a leading factor in poor patient care in some areas.

The Health Secretary decided to disclose the list of hospitals in difficulty and is expected to announce the rescue plans for each trust next month.

Taxpayers are having to pay more than £200 billion for schools, hospitals and other projects whose capital value is little more than £50 billion.

In one example, a hospital in Bromley, south east London, will ultimately cost the NHS £1.2 billion, more than 10 times what it is worth. Another hospital was charged £52,000 for maintenance that cost £750. The annual cost of the schemes is almost £400 for each household.

The public payments for PFI deals are typically linked to inflation and therefore the cost to taxpayers has increased by up to a third since the beginning of the credit crisis, according to the National Audit Office. Last month, MPs on the Treasury select committee effectively called for a moratorium on new PFI projects, which it said were “like a drug” as the costs were not apparent at the outset.

George Osborne, the Chancellor, has tightened the rules on the deals.

Earlier this year, John Healey, the shadow health secretary, admitted in an interview that Labour ministers had failed when negotiating the multi–million pound schemes for hospitals.

“There is definitely a case for saying we were poor at PFI, poor at negotiating PFI contracts at the outset,” he said.

Companies who run PFI schemes boast profit margins of up to 71 per cent on the projects, but have come under growing pressure from MPs and ministers to return some of their “windfall profits”.

From: http://www.telegraph.co.uk/NHS-hospitals-crippled-by-PFI-scheme

Labour’s Private Finance Initiative- NHS hospitals will cost taxpayers 60 years of pain

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.
Labour's Private Finance Initiative- NHS hospitals will cost taxpayers 60 years of painSeveral 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