Labour MPs are absolutely right to reject Wes Streeting’s plan to use private capital to build neighbourhood health centres (Labour MPs urge Reeves to drop private finance plans for NHS buildings, 21 November). Like a family using a payday loan to buy their home, yes, we’d end up with a building, but we’ll have to sacrifice meals to keep up with the payments.
Given Rachel Reeves’s lack of fiscal wiggle room, no one believes that the NHS’s budget will increase year-on-year to keep pace with the combined financial impact of inflation, the growing health needs of our ageing population and possible rising drug prices. So adding a new private finance debt burden to this cocktail will only result in trusts skimping on the only one of those things they have control over: patient care.
Research has shown that some trusts pay out more in annual debt repayments for private finance initiatives (PFI) than they do for medicines for patients. A new briefing by We Own It discusses different private finance models and how they each damage NHS finances. The Streeting PFI model won’t be any different.
There are a number of non‑private finance options available to Reeves and Streeting to fund investment in NHS capacity. Reeves has already shown that she can claw back wasted public funds with Covid contracts, so why not with historic PFI deals?
Second, they could introduce VAT on private healthcare, a policy supported by Neil Kinnock. This would raise around £2bn.
Streeting and Reeves’s hands are not tied. If they end up resurrecting private finance in the NHS, it will be a political choice.
Johnbosco Nwogbo
Lead campaigner, We Own It
Labour MPs urging the chancellor to drop private finance plans for the NHS overlook the danger that, under the current fiscal rules, health centres won’t get built without private investment. As the National Audit Office found, PFI built projects “on time and on budget”. It also locked in maintenance for years – protecting the NHS from cost‑cutting chancellors.
Ninety hospitals were rebuilt under PFIs in less than a decade, with better value for money. By contrast, the non-PFI new hospital building programme, announced six years ago, will not see most hospitals start being built until 2032.
The NHS Lift (local improvement finance trust) programme – which gave a stake to the public sector – built 350 health centres in some of the most deprived communities. We can’t let ideology leave NHS patients waiting in crumbling and overcrowded buildings.
Lord Hutton
Former Labour cabinet minister and chair of the Association of Infrastructure Investors in Public Private Partnerships
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