Intended for healthcare professionals

Education And Debate

The private finance initiative: spinning out the defence

BMJ 2000; 320 doi: (Published 27 May 2000) Cite this as: BMJ 2000;320:1460
  1. Judy Jones, freelance journalist for the BMJ (

    See also pp 1457, 1480, 1483

    Advocates of the private finance initiative have consistently portrayed the policy as the engine driving the “biggest ever hospital building programme in the history of the NHS.” When he was health minister, Alan Milburn, now secretary of state, dubbed it “the only game in town.” As criticisms from independent bodies and individuals have mounted, however, the government's rhetoric has since become rather more equivocal and restrained. At times, it has disappeared altogether.

    Summary points

    The use of the private finance initiative for procuring new buildings for the NHS has come under mounting criticism from independent bodies

    Colin Reeves, finance director of the NHS, promised last July to write a rejoinder to a series of articles published in the BMJ on flaws in the initiative

    Mr Reeves changed his mind at least twice about whether to fulfil that commitment, but the BMJ finally received an article from him on 12 May this year

    The Department of Health denies that it had problems rebutting the BMJ's criticisms and attributes the delay to waiting for the dissemination of new guidelines on the private finance initiative in February

    Critical analysis

    The private finance initiative has been used to procure 32 NHS hospital building projects across Britain since the Conservative government introduced the policy in the early 1990s. Last July, the BMJ published a series of four articles challenging the rationale underpinning the initiative, which the incoming Labour administration inherited from the Tories and pursued with apparent alacrity, at least in its early months.14

    Professor Allyson Pollock and colleagues at University College London suggested in their articles that the case for the private finance initiative was fatally flawed in several major respects. In essence, they argued that under the initiative taxpayers would pay more for shrinking provision at a …

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