Indebted hospital trusts spent £190m on PFI repayments
Health trusts that run the two main hospitals in the area are “the most indebted in London” and spent £190m last year alone paying off private companies, a report has found.
Barts Health, which runs Whipps Cross in Leytonstone, and Barking, Havering and Redbridge University Trust (BHRUT), in charge of King George Hospital in Goodmayes, collectively spent £190m of their income on high-interest private finance initiative (PFI) repayments.
A PFI contract is a long-term agreement between the public sector and private sector lasting from 30 to 60 years and has been the main route for capital projects in the NHS for the past two decades.
At the time these PFI repayments were being made, they both each had deficits of £38m, although Barts deficit is projected to reach £93m by the end of 2015 - the biggest the trust has ever seen.
BHRUT spent 11 per cent, or £52m, of its £457m budget in 2013/14 on PFI, whereas Barts Health forked out a staggering £137.6m, or 10 per cent, of its £1.28bn budget on PFI during the same period.
The £1.1bn Barts PFI project in 2006 saw the opening of the new Royal London, the Barts Cancer Centre, and the Barts Heart Centre and represents the single largest NHS PFI project to-date.
The Newham University Hospital project, also run by Barts, represents the poorest PFI deal, with the trust paying back £735m on a scheme that cost £35m to build.
Together, the entire hospital PFI schemes in London cost £2.8bn to build, but will cost £20.2bn in repayments over the next 30 years, the NHS Support Federation report claims.
It also states the annual cost of PFI to London’s NHS trusts was £477m in 2014/2015, but is expected to rise to £542m by 2019.
London mayoral hopeful, Labour’s Sadiq Khan, who commissioned ‘PFI and the NHS in London’, said the capital’s hospitals need to be bought out of the PFI debt.
He said: “It’s abundantly clear from this report that many of our hospitals in London are suffocating under the weight of PFI debt and that radical action needs to be taken to alleviate the growing financial pressures they are coming under.
“At the moment huge sums of public money are being wasted on high-interest PFI repayments when that money could be better spent on more hospital beds, nurses, doctors and care workers for our city.
“Existing PFI contracts have become a millstone around the necks of our hospitals and need to be dealt with as a matter of urgency.”
Campaigner Andrew Sharp of Waltham Forest Save our NHS, argues PFI is “haemorrhaging public money from patient care” and said it was time to end the “disastrous and unsustainable Bart’s Health PFI contracts”.
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