Concerns are rising about another "PFI-style disaster" after ministers paid £6m in contracts to companies consulting on employing private finance to construct NHS clinics. The Department of Health and Social Care (DHSC) has paid £3m each to management consultants Deloitte and lawyers Addleshaw Goddard to consider the potential for public-private partnerships (PPPs) in developing "neighbourhood health centres" across England.
The companies have been given the job of developing the business case, imagining what shape any PPP might take, and doing the "financial modelling" for the scheme. They are also given the role of "potentially supporting (DHSC) through the procurement" of the new clinics, which will be established initially in areas of deprivation in the country.
Health secretary Wes Streeting announced the site of the first 43 centers this month. The intention is to transfer some healthcare services out of hospitals into the community, with medics, nurses, pharmacists, social care professionals and voluntary groups collaborating under the same roof.
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But activists fear that such partnership with private capital would replicate the disastrous expensive blunders of the private finance initiative (PFI), severely criticized for siphoning off public funds. In 2018, the National Audit Office stated that PFI contracts agreed upon in the 1990s and 2000s had seen the NHS still owed to pay more than £40bn through the 2040s.
Johnbosco Nwogbo, the lead campaigner of We Own It campaign group said, “Private finance has been a disaster for our public services.” He also said “PFI is a ticking timebomb beneath our NHS, now blowing up in the face of patients.”
“Some NHS hospitals are spending more on PFI repayments than on medicines. Profit continues to be taken out by private finance investors, which could be used instead to treat patients. While the state of the public finances is dire, the government would be foolhardy and indeed reckless to bring back a version of PFI, given it proved such an expensive rip-off the last time”, he further added.
According to Nwogbo, any partnership between the labour party and private capital would violate the pledge in its election manifesto, and that the NGS will “always be publicly owned and publicly funded."
The DHSC, in a response to a freedom of information request fom Nwobgo said, "The government is exploring the feasibility of using new public private partnership models for taxpayer-funded projects in very limited circumstances, where they could represent value for money. This includes exploring the potential to use PPPs to deliver certain types of primary and community health infrastructure.”
The chief executive of the hospitals groups the NHS Confederation, Matthew Taylor said that ministers should consider utilizing the private sector given the NHS’s paucity of capital resources to develop and maintain buildings and buy technology. Taylor further added, “Given the strain on public finances, private investment is one of the only ways to inject vital capital funding into the NHS so it can build modern healthcare facilities fit for the 21st century. “This does not mean resurrecting the old private finance initiatives model, which has faced some justified criticism.”
DHSC representative advised to consider “a range of options to provide the best care for people across the country. All proposals are subject to robust value for money assessments to ensure taxpayers get the best possible return on investment in our health services.”
