Saturday, 26 June 2010

PFI contracts mean that NHS "front line" will suffer in England

The press release accompanying the National Audit Office's report on hospitals built under the  Private Finance Initiative is anodyne. However, there is more disturbing news in the report proper (

" Some Trusts are not, however, devoting sufficient resources to contract management. Many Trusts have recently increased the resources they devote to the management of their PFI contracts. These Trusts realised that managing the contracts was a greater challenge than they had at first thought. However, nine of the
76 PFI contracts (12 per cent) have no one assigned to contract management.

"Trusts are likely to be expected to make efficiency savings over the next few years, but their ability to make savings from their PFI contracts is limited.

 "There are several reasons why it is difficult for Trusts to further reduce their PFI spend or get service improvements through sharing in efficiency savings:
a Unlike refinancing gains, the contracts do not require investors or contractors to share gains they can generate through more efficient management or service delivery in individual contracts, or groups of contracts, where these gains are not reflected in prices offered in the value testing reviews.

b We saw little evidence of partnering work between contractors and Trusts aimed at driving down costs and producing mutual benefits.

c Although maintenance services are subject to competitive tension in the tendering process, Trusts have not been able to benefit from any efficiencies in building maintenance which contractors achieve over the contract’s life. This is because these services are not value tested and contractors do not share with Trusts
information on their maintenance spend."

So it is difficult to make savings without cutting back on services.

"Whilst some Trusts have sought to make savings by reducing the scope or performance requirements of their PFI services, there is little experience of these negotiations or their outcomes. Trusts need to ensure that any decision to reduce services is informed of the long-term consequences to costs and the impact on patients"

The Welsh Assembly Government has until now resisted large-scale PFI scenes, with the notable exception of Neath Port Talbot hospital. One would like to ask the directors of the new Abertawe Bro Morgannwg University Health Trust whether our area is in a similar financial strait-jacket because of PFI, but unfortunately the Trust does not hold public meetings as its predecessor bodies used to, thanks Ms Hart's reorganisation.

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