MPs call for more publicly funded capital projects in the NHS

BMJ 2002; 324 doi: (Published 18 May 2002) Cite this as: BMJ 2002;324:1173
  1. Wendy Moore
  1. London

    More public capital funds should be invested in NHS developments to provide value for money comparisons with the controversial private finance initiative (PFI), an all party committee of backbench MPs has urged.

    The long awaited report into the role of the private sector in the NHS by the Commons health committee, published this week, voices mild criticism of the government's handling of the PFI drive but avoids coming down firmly for or against the initiative. The outcome of the inquiry has reportedly been delayed because members were split over their verdict on PFI, with Labour's chairman, David Hinchliffe, said to have been in a small minority that was highly critical of the scheme.

    The report, which also looks at moves to extend private sector involvement in the NHS, makes a strong plea for more openness in the handling of PFI to promote a “more rational and objective debate.”

    So far, eight major hospital developments have opened under the PFI scheme (with 15 more in construction), which was launched by the Conservative government in 1992 and has been extended by Labour since it came to power in 1997. By contrast, only four hospitals are being built with conventional public capital.

    The health committee argues that the PFI debate has become polarised, with “exaggerated claims” on both sides. PFI has become the “scapegoat” for teething problems in some schemes, it says. The report concludes that PFI does not “necessarily” lead to cuts in bed numbers but urges the government to make it clear to all trusts that hospital capacity should not be affected by PFI.

    However, the report highlights numerous inadequacies in the system that trusts must use to show that PFI, which typically spreads capital costs over 30 years, represents value for money against a hypothetical publicly financed development. The report says trusts may treat the exercise as a “hurdle” to surmount rather than an objective test and suggest that the calculations are so complex the results may be “manipulated” in favour of PFI. In reality, the committee says, cost differences are “often marginal.” Yet the lack of public capital means the real choice is often between a PFI funded hospital and no hospital. It calls for the National Audit Office to conduct an urgent scrutiny of the value for money tests.

    The report does, however, enthusiastically back private financing of improvements to primary care facilities.

    It also suggests the government look at incentives to encourage NHS consultants to commit more time to the NHS. (See pp 1178, 1205.)


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