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Nhs Mortgage

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From the BBC website

http://www.bbc.co.uk/news/health-10882522

The NHS in England faces a total bill of £65bn for new hospitals built under the private finance initiative (PFI), figures obtained by the BBC indicate.

The so-called "NHS mortgage" means that for some trusts annual repayments take up more than 10% of their turnover.

Economists said the fees, which rise each year, would make it harder to achieve savings while doctors said they would mean less money for patient care.

But the government said the 103 schemes were providing value for money.

Under the schemes, private firms pay for and build new hospitals and mental health units, leaving the NHS to pay off what is effectively its mortgage over a period of 30 or so years.

The data shows that the value of the projects when they were built was £11.3bn.

However, over the lifetime of the deals, the NHS is due to pay back £65.1bn, once extra costs such as maintenance, cleaning and catering are taken into account.

The figures also reveal the levels of repayments are rising. In total, the NHS currently pays back £1.25bn each year - a figure which rises year-on-year until 2030 when it will top £2.3bn. The final payment will not be made until 2048.

The situation has prompted calls for the NHS to try to renegotiate the deals to help it cope during the squeeze on public spending and with the emphasis now on moving care out of hospitals and into the community.

While the NHS budget is being protected, the health service has still been told to find up to £20bn of savings by 2014 to help it cope with pressures from the ageing population, the rising price of drugs and lifestyle changes such as obesity.

Professor John Appleby, chief economist at the King's Fund health think-tank, said: "It is a bit like taking out a pretty big mortgage in the expectation your income is going to rise, but the NHS is facing a period where that is not going to happen.

"Money is being squeezed and the size of the repayments will make it harder for some to make the savings it needs to. I don't see why the NHS can't go back to its lenders to renegotiate the deals, just as we would with our own mortgages."

Dr Mark Porter, of the British Medical Association, added: "Locking the NHS into long-term contracts with the private sector has made entire local health economies more vulnerable to changing conditions.

"Now the financial crisis has changed conditions beyond recognition, so trusts tied into PFI deals have even less freedom to make business decisions that protect services, making cuts and closures more likely."

Nigel Edwards, director of policy at the NHS Confederation, which represents trusts, accepted there was a problem.

"They were planned for a different world. I'm sure that in some cases people feel their hands are tied."

And former NHS trust chief executive Roy Lilley warned the building of large hospitals under PFI was out of kilter with the move in the NHS towards community treatment.

But a Department of Health spokeswoman said the schemes were providing "value for money" and were "affordable".

She added: "All trusts, not just those with PFI contracts, will need to deliver significant efficiencies over the coming years in order to meet rapidly rising demands while protecting front-line services.

"One of the benefits of PFI is that the buildings are always contractually required to be kept in good condition - good maintenance will always cost more than not maintaining facilities to a high standard."

The burden of PFIs

Coventry and Warwickshire NHS Trust - Currently spending almost 15% of its income on its PFI project. Chief executive Andrew Hardy says the trust is already looking to reduce its payments.

South London Healthcare NHS Trust - Has major PFI projects in Bromley and Woolwich. Spending 13% of income on repaying debt. Trust says there are "undoubtedly some constraints from having these fixed costs".

Dudley NHS Trust - Bosses say they are looking for "innovative" ways to reduce the PFI bill, which now accounts for 13% of turnover.

Buckinghamshire NHS Trust - Three hospitals developed under PFI. Trust admits repayments "impact on the ease at which we can make savings".

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Thin end, of a very thick wedge.

Who would have thought that socialists (albeit of the champagne variety) would be the ones to deliver the public services into the sweaty, sticky hands of capitalists, eh!?

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Surprised there is not more foaming at the mouth on this.

PFI - nicely off-balance but plenty of short-term gloating and photo opps.

The pinnacle of living beyond our means and the elite and dodgy rewarding themselves.

Somebody else's mess.

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Surprised there is not more foaming at the mouth on this.

PFI - nicely off-balance but plenty of short-term gloating and photo opps.

The pinnacle of living beyond our means and the elite and dodgy rewarding themselves.

Somebody else's mess.

A fitting metaphor for the last decade, don't you think?

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Well that’s 60bn of it, just the drip feed of the other £1.94trn for the news to show now.

What’s up next? Schools, infrastructure, social security? I wonder just how many intangible systems have been paid for with PFI.

Off topic(ish), a colleague of mine today got a bit heated under the collar when we was discussing the privatisation of education – hitting me with the immortal let’s drop the subject comeback of “It’ll never happen!”.

Riiiiight, it already has, and now the Cons are carrying it on. McD’s kids coming to a school near you.

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Well some folk have been warning about this for ages. As you can see in this flashback to 2002.

They found that even the apparently basic task of raising the money to pay for the new hospitals through PFI substantially increased costs.

Another bung to the bankers at taxpayer's expense.

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  • 145 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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