FT reports affordability crisis; NHS Confederation adds to woes
Changes to the way government pays for hospital schemes could mark the end for PFI 'megahospitals' valued at more than 拢300m.
According to a report in the Financial Times, the government's decision to only pay for hospitals for the work they do and for the patients that use them undermines affordability calculations that underpin a 25-40 year PFI contract. Until now the government has used block contracts, which allow contractors to forecast its revenue stream fairly accurately.
The doubts emerged after the Department of Health suggested that Skanska's 拢1.1bn St Bartholomew's and Royal London project was unaffordable, and that at least part of it should be rescoped.
The FT reported that senior NHS executives and Treasury officials believe that the PFI might still be suitable for schemes valued at 拢100m-300m, particularly if there was a large refurbishment element.
The NHS Confederation has also voiced its criticism of PFI hospitals in a report that has surveyed 13 completed schemes. It concluded that negotiations are overly expensive and that the resulting contracts are inflexible.
