News

Private Finance Initiative comes under pressure

The government is facing increasing pressure to scrap the Private Finance Initiative (PFI), which enables private companies to construct and own hospitals, health centres and other public buildings.

The TUC has called for an alliance of trade unions and community and health service user groups to campaign for the government to replace PFI with a publicly funded programme of investment.

A TUC resolution calling for the creation of the alliance — proposed by public sector union Unison and passed unanimously — also instructed the TUC to produce a report on alternative models of service delivery by next summer.

Moving the resolution, Unison deputy general secretary Dave Prentis said PFI led to a loss of democratic accountability and a reduction in services. ‘PFI is a con,’ he said. ‘It is not value for money. It is mortgaging the future of our services for a quick financial fix. The sooner the Treasury gets rid of this Tory policy designed to undermine our public services the better for all of us.’

Jack Dromey of the TGWU added that some members of the government seemed to think that PFI was ‘the greatest miracle since the virgin birth: pain free, heaven on earth’. The reality is different, he said. ‘PFI increases long-term debt and has the potential to increase charges for service users.’

At the same time, the Scottish National Party issued a call for the health committee of the Scottish Parliament to undertake a full investigation of PFI, including a full cost assessment and the calling of expert witnesses.

SNP party leader Alex Salmond told the Scottish Council of the BMA that Labour’s claim that PFI schemes are cheaper than public investment go against all the facts. ‘PFI schemes involve a reduction in the number of beds available in hospitals and significant cuts in the number of hospital staff,’ he added.

And an investigation by the health committee of the Scottish Parliament would ‘play a major role in exposing the pitfalls of PFI and help to protect the NHS,’ he said.

Research released in Scotland suggests that the development of PFI in Lothian Health Board, including the high cost of building the Edinburgh Royal Infirmary under the scheme, has resulted in a ‘downsizing’ of intensive care beds elsewhere in the Lothian area.

According to Dr Matthew Dunnigan, figures released by the Statistical Services Division of the NHS show that the number of intensive care patients treated in Lothian has fallen by 13 per cent since 1994-95, compared with large increases in the rest of Scotland.

One of the main tenets of PFI is that hospital capacity can be reduced and compensated for by greater efficiency, said Dr Dunnigan, a senior research fellow at Glasgow University. But PFI in Lothian had resulted in a ‘shunting of care into neighbouring health boards and in part into longer waiting lists’. It will also lead increasingly to elective care beds moving to private healthcare, which is waiting in the wings, he added.

If PFI continues unhindered ‘the NHS will become a safety net service,’ he said.

An expression of opposition to PFI at the Labour Party conference was, however, nullified when the issue was categorised as not being ‘contemporary’ and, therefore, not a suitable subject for a conference resolution.

A Labour Party spokesperson told healthmatters that people wishing to influence Labour policy on PFI would have an opportunity at meetings of Labour’s Policy Commission on the Economy, due to be held before the national policy forum next summer. The dates of the meetings would ‘depend somewhat on the movement of ministers’, he said.

Former health secretary Frank Dobson made a minor concession to those critical of how PFI schemes have allowed private companies to take over the employment contracts and cut the wages of non-medical staff. ‘From now, ancillary services will not be automatically included in PFI contracts,’ he told the Labour conference.