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East Lancs hospitals look at PFI buyouts
3:30pm Thursday 19th June 2014 in News
HOSPITAL chiefs are looking at the possibility of buying out the expensive PFI contracts which see millions of pounds of NHS cash handed over to private companies.
Beancounters at East Lancashire Hospitals NHS Trust, which currently spends about £20million a year on its Private Finance Initiative (PFI) deals, said they had been following developments at Northumbria Healthcare NHS Foundation Trust ‘with interest’.
In the first such arrangement of its kind, the Northumbria trust has borrowed £114million from the local council to pay off the contractors who built, and ran Hexham General Hospital, leading to savings of £67million over 19 years.
The Royal Blackburn and much of Burnley General Hos- pital were built by private companies in 2006, at a combined cost of about £140m, but ELHT will have to pay back almost £1billion by the year 2041, due to interest charges.
The deals have been branded a ‘rip-off’ by Burnley MP Gordon Birtwistle, while health campaigner Russ McLean said they diverted crucial funds away from patient care.
Jonathan Wood, deputy chief executive and director of finance at ELHT, said: “We have been following the progress in Northumberland with interest. While most PFI contracts are slightly different, this is something that should be looked at by all NHS organisations who lease build-ings from a PFI provider, particularly if we can prov-ide better value for the users of our services.”
A Kent-based firm called Consort Healthcare (Black-burn) Limited built the Royal Blackburn Hospital at a cost of £109million, and will receive £796million from the trust over 36 years.
The deal includes other services, such as maintenance, security, window clean- ing, and pest control.
The Burnley contract, which saw £30million spent on the Phase Five area of the hospital, is held by Manchester-based SPC Ltd Fac-ilities Management.
The trust will have to pay back £181million over 35 years, with the deal includ-ing security and car park-ing services.
Allyson Pollock, professor of public health research and policy at Queen Mary, University of London, said she wants to know how much money the private firms involved in the Northumbria deal have walked away with.
She added: “Let’s face it, they are not doing this bec-ause they love the NHS.
“We need a full, open investigation into what has happened here.”
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