Intended for healthcare professionals

Education And Debate

What happens when the private sector plans hospital services for the NHS: three case studies under the private finance initiative

BMJ 1997; 314 doi: (Published 26 April 1997) Cite this as: BMJ 1997;314:1266
  1. Allyson M Pollock (,
  2. Matthew Dunnigan,
  3. Declan Gaffney,
  4. Alison Macfarlane,
  5. F Azeem Majeed the NHS Consultants' Association, Radical Statistics Health Group and the NHS Support Federation
  1. NHS Consultants' Association, c/o Hill House, Great Bourton, Banbury OX17 1QH, Radical Statistics Health Group, c/o 10 Ruskin Avenue, Bradford BD9 6EB, NHS Support Federation, 37-39 Great Guildford Street, London SE1 0ES
  1. Correspondence to: Dr Allyson Pollock, Department of Public Health Sciences, St George's Hospital Medical School, London SW17 0RE.


    We aim to promote efficiency, to improve services and to stimulate fresh flows of investment. We want to harness the private sector's management expertise and resources, bringing a new approach to investment in a whole range of activities and services traditionally regarded as the exclusive domain of the public sector. Kenneth Clarke, chancellor of the exchequer, November 1993

    The private finance initiative (PFI) for public sector projects was launched by the government in 1992 to transform “public sector organisations from being owners of assets and direct providers of services into purchasers of services from the private sector.”1 The types of projects funded under the scheme range from the building and operation of trunk roads, computer systems, and vehicle fleets to the construction of hospitals and delivery of NHS support systems.2 New hospitals are leased back to the NHS at market rates for 20-60 years. NHS land and buildings are often sold to the private companies as part of the deal.

    We consider here some of the implications of the use of private capital to fund NHS hospital developments, based on the plans produced for those schemes that have reached an advanced stage (table 1). We look at three of these in detail. A second wave of trusts already negotiating contracts include trusts in Glasgow, Newcastle, and the Midlands. Given the speed with which trusts have taken up the private finance initiative, it is important to examine the assumptions underlying the projects and the impact these projects will have on health services in their localities. First wave schemes will affect around 5% of acute NHS beds in England and almost a quarter in Scotland. Hence these projects are not just a local issue. They indicate the likely configuration of hospital services in England and Scotland if current policies …

    View Full Text

    Log in

    Log in through your institution


    * For online subscription