Private Finance Initiative Hospitals

Oral Answers to Questions — Health – in the House of Commons at 11:30 am on 26th February 2013.

Alert me about debates like this

Photo of David Mowat David Mowat Conservative, Warrington South 11:30 am, 26th February 2013

What assessment his Department has made of the effect of hospitals built under the private finance initiative on the work of neighbouring hospitals.

Photo of Daniel Poulter Daniel Poulter The Parliamentary Under-Secretary of State for Health

This Government recognise that no hospital operates in isolation. We are providing seven NHS trusts that are facing difficulties as a result of PFI agreements with access to a £1.5 billion support fund to pay for extra costs accrued as a result of those damaging PFI schemes.

Photo of David Mowat David Mowat Conservative, Warrington South

I apologise for my voice—perhaps I shall soon be interacting more directly with the NHS.

The Warrington and Halton hospital has independent trust status. It is busy and getting busier. The previous Government built a huge PFI hospital about 10 miles away at Whiston, which does not have the patient volumes to sustain the demands of the botched PFI deal. It is heavily loss-making. Will the Minister provide assurance that there will be no forced merger and that my constituents will not pay for a bad decision made a decade ago?

Photo of Daniel Poulter Daniel Poulter The Parliamentary Under-Secretary of State for Health

I thank my hon. Friend for his question. He is right to highlight the very damaging PFI scheme signed up by the previous Government for the St Helens and Knowsley NHS Trust. The percentage of annual turnover going on PFI payments at the moment is 14.2%. That is unsustainable, which is why this Government are trying to sort out the mess created by the previous Government’s signing up to too many PFI agreements.

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

The Minister will be aware that support for excess PFI costs was an important element in the report of the trust special administrator in south-east London, to which the Secretary of State referred in an earlier exchange. That recommendation was widely welcomed. However, as I highlighted in questions a month ago, the Government have not accepted the financial recommendations of the trust special administrator for the capital costs and the transitional costs inherent in his recommendations. If the Government wish to proceed with these changes, will the Government agree to meet those costs as well?

Photo of Daniel Poulter Daniel Poulter The Parliamentary Under-Secretary of State for Health

The right hon. Gentleman is in dangerous territory talking about PFI schemes to which the previous Government signed up. No hospital operates in isolation. The South London Healthcare NHS Trust was paying out 13.9% of its turnover on the PFI. That was unsustainable. It has caused huge difficulties in the local health care economy and affected patient care, which was a very bad thing to do. The right hon. Gentleman needs to recognise that this Government are providing £1.5 billion-worth of support to many trusts that have struggled under these PFI agreements—