PFI Liabilities

Oral Answers to Questions — Health – in the House of Commons at 12:00 am on 21st March 2017.

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Photo of Tim Loughton Tim Loughton Conservative, East Worthing and Shoreham 12:00 am, 21st March 2017

What the estimated cost of private finance initiative liabilities to the NHS is in (a) 2016-17 and (b) the subsequent three financial years.

Photo of Philip Dunne Philip Dunne The Minister of State, Department of Health

Labour’s legacy cost from the 103 hospital PFI schemes entered into between 1997 and 2010 was a public sector liability of £77 billion. The estimated total NHS PFI payments for the financial year ending at the end of this month is £1.97 billion, and the totals for the next three financial years are £2.04 billion, £2.11 billion and £2.16 billion.

Photo of Tim Loughton Tim Loughton Conservative, East Worthing and Shoreham

Those are alarming figures, so what are the Government doing to support the trusts affected by those expensive and inflexible PFI and other deals reached under the previous Labour Government? What assessment has the Minister made of what the funds could be buying in the NHS now if it was not saddled by this Labour debt legacy?

Photo of Philip Dunne Philip Dunne The Minister of State, Department of Health

My hon. Friend is right to point out that the Opposition constantly complain about the cost of the PFI programmes that they themselves initiated. The Government are making large efforts to support trusts in dealing with the PFI legacy. We are giving the seven trusts worst affected by PFI schemes access to a £1.5 billion support fund over a 25-year period. In 2014 alone, trusts negotiated savings worth over £250 million on their contracts.

Photo of John Pugh John Pugh Liberal Democrat Spokesperson (Education)

On the subject of financial liabilities, what assessment has the Department made of the potential effect of changes to the discount rate on the amount of compensation paid out by the NHS Litigation Authority?

Photo of Philip Dunne Philip Dunne The Minister of State, Department of Health

The Department is urgently undertaking work to understand what the impact on the NHS will be. There have been regular meetings with the NHS Litigation Authority since the announcement. The Government will adjust the NHSLA’s budget to meet the additional costs associated with the change in the discount rate.

Photo of John Bercow John Bercow Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons, Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Speaker of the House of Commons, Chair, Commons Reference Group on Representation and Inclusion Committee

John Pugh shoehorned Question 21, which we did not reach, into a Question that we did reach. He blurted it out so quickly that it took us a while to notice that it had absolutely nothing whatsoever to do with the private finance initiative. Very naughty boy!

Photo of Rob Marris Rob Marris Labour, Wolverhampton South West

PFI always was idiotic. It carried on under the coalition Government and has left a huge financial hangover. Will the Minister have a word with his colleagues in the Treasury, because the Treasury figures on hospital liabilities are different from the figures that some of the hospitals themselves produce? As there is a discrepancy, we do not even know what the liabilities are.

Photo of Philip Dunne Philip Dunne The Minister of State, Department of Health

The hon. Gentleman has been assiduous, as is his wont, in trying to get to the bottom of the costs of the PFI impact on the hospital in his area. If he has a discrepancy, it would be very helpful if he pointed it out to me in writing. I will then respond to him.