Education And Debate The private finance initiative

The politics of the private finance initiative and the new NHS

BMJ 1999; 319 doi: https://doi.org/10.1136/bmj.319.7204.249 (Published 24 July 1999) Cite this as: BMJ 1999;319:249
  1. Declan Gaffney, research fellowa,
  2. Allyson M Pollock, professor (allyson.pollock@ucl.ac.uk)a,
  3. David Price, research fellowb,
  4. Jean Shaoul, lecturerc
  1. a Health Policy and Health Services Research Unit, School of Public Policy, University College London, London WC1H 9EZ
  2. b Social Welfare Research Unit, University of Northumbria, Newcastle upon Tyne NE7 7XA
  3. c Department of Accounting, University of Manchester, Manchester M13 9PL
  1. Correspondence to: Allyson Pollock

    This is the last of four articles on Britain's public-private partnership in health care

    We began this series by arguing that the private finance initiative, far from being a new source of funding for NHS infrastructure, is a financing mechanism that greatly increases the cost to the taxpayer of NHS capital development.1 The second paper showed that the justification for the higher costs of the private finance initiative—the transfer of risk to the private sector—was not borne out by the evidence.2 The third paper showed the impact of these higher costs at local level on the revenue budgets of NHS trusts and health authorities, is to distort planning decisions and to reduce planned staffing and service levels.3

    All this raises questions about the direction of government policy on the NHS. Recent government commitments to increase clinical staffing levels and reverse the decline in bed capacity sit uneasily with a policy that seems to lead in the opposite direction. The government has consistently argued that the private finance initiative is no more than a procurement policy, with no implications for services other than increased efficiency. However, this ignores the importance of public-private partnerships to the government's overall agenda.

    Summary points

    The private finance initiative does not provide new money for public services as the government claims

    The high costs of capital under the private finance initiative translates into service and workforce cuts

    The reduction in public provision of long term care, NHS dentistry, optical services, and elective surgical care shows the trajectory for the NHS under the private finance initiative

    In the NHS, shrinkage in service provision combined with budget constraints could force primary care trusts to redefine entitlement to NHS care and to seek privately funded solutions for those who can afford to pay, leaving a rump service

    The …

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