Harringay, Haringey - So Good they Spelt it Twice!
One possible reason for threat to Whittington Hospital A&E
Figures uncovered by the Liberal Democrats have revealed that the Whittington
Hospital is facing a £158 million bill for refurbishment works worth
only £32 million – paying five times over for new facilities. This
burden of long-term debt is a key reason behind the proposals to close
down accident and emergency facilities at the hospital.
Under the Private Finance Initiative established by Gordon Brown when he was Chancellor, a 30-year contract with a private consortium
was signed for the refurbishment of facilities at Whittington Hospital.
The total capital value of these works is £32 million, but the
Whittington NHS Trust will be paying millions of pounds every year
until 2036 – when it will have paid five times the actual value.
The PFI scheme was used by Gordon Brown to keep massive NHS debts off the Government’s balance sheet, but means that now the NHS is
facing a huge debt crisis and will pay many times over the value of new
hospitals and refurbishments. Nationally, the health service faces a
£63 billion debt for PFI hospitals worth £11 billion.
Local hospital campaigner Cllr Rhodri Jamieson-Ball commented:
“These figures reveal how disastrous Labour’s stewardship of the NHS has been, thanks mainly to Gordon Brown’s financial incompetence.
Gordon Brown’s desperate attempt to keep all this debt out of the
official figures means that our local hospital is paying five times
what the works are actually worth.
“It’s no wonder vital services at the Whittington are being threatened with the axe. Our hospital – and the entire NHS – has been
lumbered with a millstone of unsustainable long-term debt. This
Government’s main legacy is a mountain of debt, and we’re all going to
be paying off Labour’s credit cards for years.”
Tags for Forum Posts: NHS, Health Issues, whittington hospital
Replies to This Discussion
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Permalink Reply by Clive Carter on
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THIS is roughly equivalent to off-balance sheet financing (long leases etc) which misleads shareholders or stakeholders and it often ends in tears. It may look good in the short term with quick results (new hospitals and schools) but as a long term strategy, it is seriously questionable. It's like a particularly expensive Hire Purchase Agreement – except the numbers are in the billions and they go on for years.
I have always been dubious about Private Finance Initiative (PFI). This has been pushed by management consultant types who point out that they enforce repairs and maintenance of capital goods, because they're in the Contract, and these are the things that are often cut back when budgets are pinched. But the cost of paying for these benefits is disproportionately large and the community is paying the private sector a huge profit on top of that from taxation.
I think PFI was begun under the Conservatives, but then the current government believed its own propaganda, that it "had abolished [Conservative] boom and bust". This risky form of financing was predicated on the belief that GDP would only increase and if that were ever true, PFI might make sense (I doubt it even then).
Even without the financial crisis of October 2008 and the recession, this foolish form of financing has mortgaged everyone's future. The country is in trouble.
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