Today marks the next step forward in plans to merge Frenchay and Southmead into a single PFI 'super-hospital' on the Southmead site. Leaving aside the issue of whether Frenchay or Southmead is the better site (on which my views are well known!), and the fact that the new hospital will have significantly fewer beds than the two that it replaces, I am also concerned about using PFI to pay for the hospital.
This is on a number of grounds:
- PFI can be poor value for money; for one thing, the Government can borrow money much more cheaply than the private sector, so the financing cost of the scheme tends to be higher when it is a PFI deal;
- There aren't many companies with the expertise to build big new acute hospitals, and the companies that can do so may have limited capacity - so there is unlikely to be vigorous competition between lots of providers for the contract, and that in turn will mean worse value for money;
- PFI contracts last for decades, which creates real rigidity if health needs change; whereas the NHS can change its own hospitals and the way they run, if your hospital belongs to someone else you probably have to renegotiate the contract if you want something done differently, which again adds to the cost;
- the National Audit Office have found that some people have got very rich indeed out of PFI hospitals - in one notorious case in Norfolk, the private sector partners got the taxpayer to pay a high interest rate and then effectively 're-mortgaged' at a much lower rate and pocketed most of the difference;
We all agree that the hospitals in North Bristol / South Glos. are in a poor state and need modernisation. But we also surely want the best value for money, not just the approach that keeps the debts off Gordon Brown's balance sheet!