PFI is here to stayBMJ 2002; 324 doi: https://doi.org/10.1136/bmj.324.7347.1178 (Published 18 May 2002) Cite this as: BMJ 2002;324:1178
With the publication this week of the Commons health committee's inquiry into the role of the private sector in the NHS, Seamus Ward looks at the failures and successes of the private finance initiative
The private finance initiative (PFI) is here to stay. That much was confirmed with April's Budget, when ministers announced that the initiative would be extended into primary care and that by 2008 there will be 42 new major hospitals, most of which will be built using private funding.
Given its pre-eminence now, it may seem surprising that PFI had a slow beginning. It was launched by the then chancellor of the exchequer, Norman Lamont, in his 1992 Budget as a way of modernising the public sector infrastructure without the government having to borrow the capital up front.
But it would be five years before the first sod was cut on the site of the first large acute hospital, one in the Dartford and Gravesham NHS Trust. It was a further three years before the new hospital opened.
While there was no shortage of interest from the private sector, negotiations on the early PFIs were slow. Financiers in particular were worried that a trust with a PFI could be wound up before the end of the initial contract period (usually 30 years), leaving its …