Private finance initiatives during NHS austerity
BMJ 2011; 342 doi: https://doi.org/10.1136/bmj.d324 (Published 09 February 2011) Cite this as: BMJ 2011;342:d324
All rapid responses
Rapid responses are electronic comments to the editor. They enable our users to debate issues raised in articles published on bmj.com. A rapid response is first posted online. If you need the URL (web address) of an individual response, simply click on the response headline and copy the URL from the browser window. A proportion of responses will, after editing, be published online and in the print journal as letters, which are indexed in PubMed. Rapid responses are not indexed in PubMed and they are not journal articles. The BMJ reserves the right to remove responses which are being wilfully misrepresented as published articles or when it is brought to our attention that a response spreads misinformation.
From March 2022, the word limit for rapid responses will be 600 words not including references and author details. We will no longer post responses that exceed this limit.
The word limit for letters selected from posted responses remains 300 words.
Older (!!) readers may recall my letter to the BMJ Aug 25, 2003,
which showed how NHS Departments under HM Treasury guidance and
sponsorship: (a) chose the PFI option for many new NHS capital
investments, when the conventional Government-funded option would have
been better value for money; and consequently (b) under-budgetted for the
unitary payments which would have to be paid to the private concessionaire
in future years.
The fact is that HM Treasury methodology for assessing such
investments was fatally flawed (& still is!). Of the 70-80 countries
worldwide who have (successfully) adopted PFI/PPP-type procurement/funding
techniques, none use the same methodology as HM Treasury!! [Get the
picture?]
In many cases, the die is cast. Blame should not be placed on
private PFI investors and contractors for making handsome gains. They
have broken no rules or laws. They have just been more competent and
financially savvy than their counterparts in Government. Doctors and
nurses, as investors, would most probably have behaved in the same way
given the opportunity. In any event, "the horse has bolted long ago".
Blame for this debacle, which is not unique to the NHS but applies
across many UK councils and public authorities, should be placed on the
"experts" in Whitehall, especially HM-T, and their advisors who set up the
this flawed PFI/PPP edifice in the first place. Their salaries and
bonuses should be clipped.
Competing interests: No competing interests
PFI Issues
Blaiklock is correct in his assertion that the blame lies with
Whitehall for the extortionate returns of PFI. However I doubt whether
this was incompetence for there was a strong political commitment to this
foolish way of securing funding for necessary NHS projects.
Mrs Thatcher seemed to resent the fact that a public service
organisation continued to enjoy general support from the public and was
evidently more cost-effective in providing acceptable, universal, care
than the various private sector based alternatives.
Of course PFIs were never in the public interest. I had the
misfortune to be exposed to these nonsenses in two Scottish Health Boards
and never met a finance officer who was not well aware that this form of
funding was a dreadful deal for the service. But the politicians of either
ruling party were persuaded or coerced into accepting that PFI was "the
only game in town" . Also, there were sufficient careerist managers around
who were prepared to sacrifice the future of the service on the altar of
their own advancement and implement the idiocies that are bleeding the
service now.
One worthwhile result of the Banking debacle and state ownership of
Banks is that the door can and should be opened to renegotiating PFI
contracts. However, given the reprehensible history of the Whitehall civil
service in establishing PFI and the exigencies of yet another English NHS
reorganisation, it will be all to easy for it to achieve nothing in the
way of improvement.
The prospects are better in Scotland given the steadfast opposition of its
present Government to PFI. I hope that it can find a way to retrieve a
better deal for the NHS in Scotland that may point the way for emulation
by other UK Health Departments and the rest of the public sector,
Competing interests: No competing interests