Private Finance Initiative

Oral Answers to Questions — Health – in the House of Commons at 12:00 am on 24th June 1997.

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Photo of Marsha Singh Marsha Singh Labour, Bradford West 12:00 am, 24th June 1997

To ask the Secretary of State for Health how much money has been spent by the NHS on consultancy fees relating to proposed PFI schemes. [3478]

Photo of Alan Milburn Alan Milburn Minister of State, Department of Health

Information is now collected centrally on total expenditure on fees for external consultants involved in major PFI schemes. The total amount which has been spent on leading schemes by NHS trusts in legal fees and advice is £30 million. The total amount spent on all major PFI schemes, including those at an earlier stage, is £37 million.

Photo of Marsha Singh Marsha Singh Labour, Bradford West

I thank the Minister for his reply and ask him whether he is as shocked as I am at that utter waste of public money by the previous Government. Can he confirm that, within weeks of taking office, the present Government have honoured their manifesto pledge to break the logjam in the PFI in the NHS, and does that not prove that, unlike the Conservatives, we keep our promises on health?

Photo of Alan Milburn Alan Milburn Minister of State, Department of Health

My hon. Friend is absolutely right. That £30 million could have bought an extra 7,500 hip replacement operations; so the £30 million legal fees bill that NHS trusts have faced has not only been a waste of taxpayer's resources but robbed patients of the money that they need for investment in front-line care. I can promise my hon. Friend that not only will we make the PFI work, but we shall cut through the PFI red tape bill to ensure that public money is spent on front-line patient services rather than on exorbitant advisers' fees.

Photo of Keith Simpson Keith Simpson Conservative, Mid Norfolk

If the Minister is anxious to save money in national health service, may I take it that he continues to support compulsory competitive tendering in the NHS?

Photo of Alan Milburn Alan Milburn Minister of State, Department of Health

As the hon. Gentleman is aware, we are conducting a comprehensive spending review and those issues will be considered in the context of the review. I should make it abundantly clear that the parameters of the review will be our manifesto commitments to ensure that the NHS is there for people when they need it, and that it is based on need, not ability to pay.

Photo of Ms Julia Drown Ms Julia Drown Labour, South Swindon

To ask the Secretary of State for Health what steps he is taking (a) to speed up decisions on private finance initiative schemes and (b) to ensure public-private partnerships in NHS capital schemes properly meet the needs of patients and staff. [3480]

Photo of Alan Milburn Alan Milburn Minister of State, Department of Health

The NHS (Private Finance) Bill 1997 will confirm NHS trusts' powers to enter into PFI contracts. That will provide the private sector with the reassurance that it needs to enter into PFI contracts and enable the two major acute hospital PFI schemes, at Norfolk and Norwich and at Dartford and Gravesham, to proceed to financial close.

I announced on 10 June an urgent exercise to prioritise all the other major acute hospital capital schemes currently testing for PFI. An announcement on which schemes have been selected to proceed will be made shortly. In future, all acute schemes will be prioritised and the PFI process will be streamlined.

Photo of Ms Julia Drown Ms Julia Drown Labour, South Swindon

Does the Minister recognise the urgency of upgrading Swindon's Princess Margaret hospital, which has £42 million of backlog maintenance and is the No. 1 priority of the South and West region of our health service?

Photo of Alan Milburn Alan Milburn Minister of State, Department of Health

I am of course aware of the urgent need that my hon. Friend's constituents feel about the PFI project in Swindon and of the representations that she and my hon. Friend the Member for North Swindon (Mr. Wills) have made to me in that regard. I can promise that the criteria that we use will ensure that NHS need and the ability to deliver quickly will be the key criteria and that, as a consequence of prioritising and taking tough action now, we shall ensure that, in future, NHS hospitals are built by means of the PFI process.

Photo of Eric Pickles Eric Pickles Conservative, Brentwood and Ongar

Before the Minister started his various reviews, there was a significant review of health needs in southern Essex and it was the unanimous view that an accident and emergency unit was necessary in Harold Wood hospital. That has gone through the PFI process and a preferred bidder is ready. Can we go ahead—or is further money to be expended on accountants and so on? Can my constituents look forward to the building of an emergency and accident unit in Harold Wood?

Photo of Alan Milburn Alan Milburn Minister of State, Department of Health

I think that the hon. Gentleman is aware that the London review that the Secretary of State announced on Friday will specifically consider the relationship between Harold Wood and Oldchurch hospitals. If there are proposals for PFI, we shall consider them in the light of reporting from the London review panel.

Photo of Mr Giles Radice Mr Giles Radice Labour, North Durham

I congratulate my hon. Friend on the steps that he is taking to speed up the PFI process. Will the Department carefully consider the case for a new general hospital at Dryburn being included in the first tranche?

Photo of Alan Milburn Alan Milburn Minister of State, Department of Health

I am aware of the strong feelings in the north Durham area about the need for a new hospital there. As my hon. Friend is aware, it is the Secretary of State who will decide on schemes in the north and in the Yorkshire area. I reiterate to my hon. Friend that the intention behind the PFI prioritisation exercise is to achieve what the previous Government signally failed to achieve by means of the PFI: getting hospitals built.

Photo of Dr Peter Brand Dr Peter Brand Liberal Democrat, Isle of Wight

I welcome the fact that the Minister will allow PFI projects to go forward only when they meet the needs of patients and staff, but how confident is he that he knows what the needs of the health service will be over the whole period when a PFI arrangement may be in place, especially where services are involved?

Photo of Alan Milburn Alan Milburn Minister of State, Department of Health

As the hon. Gentleman is aware, the assessment that we are undertaking—initially through the regional offices and then by Ministers—will include a number of criteria, of which NHS need is the most important. Of course, we shall consider carefully whether the schemes presented to us reflect high NHS need; equally, we shall consider whether they represent good value for money. Unless schemes can demonstrate that they improve risk transfer and that they represent good value for money, we shall not give them the go-ahead.