All the more reason to vote for Claire Wright and not Hugo Swire, who voted for the Health and Social Care Act 2012 that created the money-gobbling, privatising internal market (though Blair started PFI as a way of cooking the Treasury’s books).
One reason for East Devon bed closures is that Tiverton Hospital (24 beds) CANNOT be reduced in beds or closed because it would be too expensive to break the PFI contract.
And Owl STILL wants to know if Neil Parish’s new hip is private or NHS.
“Councils and hospital trusts are trying to ditch controversial private finance initiative (PFI) deals as austerity makes them unaffordable.
The long-term deals, which were hugely popular in the 2000s, were used to pay for new schools, hospitals, prisons and roads. They were designed to shift risk to the private sector but were often struck on inflexible terms spanning several decades. Cash-strapped public sector bodies are increasingly trying to escape from PFI deals as the contracts eat up bigger slices of their revenues.
Councils are turning to an obscure arm of the Treasury, the Public Works Loan Board, to refinance debt at a much lower rate — shifting the risk back onto the state. Ending deals also exposes councils to hefty compensation fees.
Deals including a £2.7bn highways contract in Birmingham and a waste contract in Essex are under pressure. An industry adviser said several hospital trusts are trying to unwind PFI deals. “They have to balance shrinking budgets in the near term and the PFIs are increasingly gobbling up their revenues.”
Source: Sunday Times (paywall)