The ex-chairman of an influential Parliamentary health watchdog has condemned the cost of a controversial PFI contract signed by Yorkshire hospital bosses as “nothing short of scandalous” after it emerged the region’s trusts are paying out £112m a year on similar funding deals.
David Hinchliffe, a former Wakefield MP who chaired the health select committee in the period when the use of ‘buy now, pay later’ deals became widespread under New Labour, said cash-strapped hospital bosses and local politicians should have done more to renegotiate their annual payments.
Analysis by The Yorkshire Post reveals that five Yorkshire hospital trusts have signed PFI (Private Finance Initiative) deals, where private firms fund the upfront costs of new buildings and are paid back over several decades, at a cost of £3.8bn. These include Mid Yorkshire hospital trust, which will pay £1.61bn over 35 years, including £38.9m last year, as part of the contract for Pontefract and Pinderfields Hospitals.
On this scheme and many others the NHS is being taken for a ride by the PFI companies.David Hinchliffe
And Leeds’ hospital trust, one of the largest in the country, says it is considering using a PFI scheme to pay for new buildings more than a decade after signing a similar deal which will cost more than £1bn over 30 years.
A total of £111.5m was paid out last year to service these debts, for buildings with a capital value of £752.6m. In addition, four Yorkshire mental health trusts have PFI contracts worth £747.7m.
The costs pile extra pressure on NHS bosses at a time when services are under unprecedented stress. Mr Hinchliffe, who says his criticisms of PFI in a select committee report were watered down by ‘loyalist’ Labour MPs, said the cost of the Pinderfields scheme was “nothing short of scandalous”.
He said: “On this scheme and many others the NHS is being taken for a ride by the PFI companies and it concerns me deeply that the education sector, now using PFI for school projects, has not learned any lessons from the NHS.
“I have sympathy for those NHS Trusts - such as Mid Yorkshire - which have the albatross of PFI around their necks but, in my view, there should have been much more vigorous efforts by them and local MPs to press nationally for a renegotiation of the debt repayment arrangements.”
Mid Yorkshire Hospitals NHS Trust insists the PFI scheme represents good value for money despite significant annual costs and is saving £20m a year compared with the old hospital buildings it helped replace.
Martin Barkley, chief executive at Mid Yorkshire Hospitals NHS Trust, said: “The PFI scheme was approved on the basis that it represents good value for money. The fact it does represent good value for money does not mean the cost of the investment year-on-year is not insignificant.”