Unison has long campaigned against what it argues is an unmanageable debt burden being levied on hospitals because of the PFI at a time of cuts. Under the schemes, private consortia finance key projects such as hospitals or other public infrastructure and are paid a fixed rate, guaranteed return over 30 years.
A brisk trade has developed in the City in selling on these debts to financiers or private equity partnerships with no involvement in the original projects. But it has emerged that because the payments are so highly prioritised – and quickly and steeply rise in cost – several NHS hospitals are being forced to close beds, cut jobs and sell off assets to make the payments at a time of reduced budgets.
Bart’s in central London is reported to have been forced to close down new beds before even opening them.
The pro-NHS campaigning group Health Emergency says that throughout the health service PFI hospitals are closing beds and cutting jobs in a “desperate bid” to balance their books.
At the new £256 million 1,200-bed Queen Alexandra Hospital in Portsmouth, which opened in 2009, 700 jobs and 100 beds are being cut with more on the way.
The hospital is locked into guaranteed payments at a fixed rate even though its income is cut and it has a £6 million deficit. But it must pay £43 million a year for 30 years. It must repay a Guernsey-based investment firm, HICL, set up by bank HSBC which, in turn, pays little British tax on the profits.
Last year, HICL reportedly made £38 million profit in six months from a total of 33 similar PFI schemes while a BBC investigation showed it paid £100,000 in tax – less than half of a per cent of the profits which were paid to British shareholders. All of this is perfectly legal.
The firm, previously known as HSBC Infrastructure Company Limited, bought an 89.9 per cent stake in the Queen Alexandra Hospital project last year.
Health Emergency spokesman Dr John Lister, said: “The PFI means that hospitals face rising bills each year, regardless of their income. It also means that private sector profits are protected by legally binding contracts taking an increased share of declining trust budgets, while clinical services, patient care and the jobs of NHS staff are sacrificed, in an impossible battle to balance the books as the NHS faces real-terms cuts for the first time in a decade.
Dr Mark Porter, chairman of the BMA’s Consultants Committee earlier this year warned of a “toxic” mix of Labour’s PFI legacy and Tory NHS reforms leading to the Government bailing out private firms who have profited from the schemes – or bought the debt – while services are undermined by skewing the NHS in favour of private providers.
