Royal London Hospital costs £1.1b? That’ll be £7.1b please.

The public finance initiative (PFI) was a way of funding capital public projects by paying private companies to pay for projects, and then paying the companies back.  The plan was that this would not show up as public debt (if that is so, then the book keepers must be very dim not to notice it).  The obvious drawback is that it is cripplingly expensive.  These private companies did not embark on this for the fun of it, they did it because it would make them lots of money.  And by jove it does.

The last Labour government was addicted to them.

The Royal London Hospital was built using such a scheme.  It was built by a consortium led by Skanska.  By chance, Skanska is one of the PFI funding companies.  So Skanska made handsome profits building the hospital, and will continue to enjoy a steady income, inflation protected.

The contract which was signed will last for 40 years (yes, 40 years).  At the end of the scheme, which involves not only the money but some payments for maintenance and services, it is calculated that that the total payments will be £7.1b.  The table below shows how much of a swindle the total PFI budget in the health service has been.

The senior management of Barts and the London NHS Trust have all just resigned: the CEO, the Head of Finance, the Head of Nursing and the Chief Non Executive Officer.

Barts and the London has undergone a massive management reorganisation up to 2012.  Really massive.  It now encompasses Barts, the Royal London, the London Chest, Mile End Hospital, Newham University Hospital and Whipps Cross.  Goodness only knows how much public money has been spent in these management reorganisations.

If anyone ever thought this was a good idea, I guess they don’t now.  All the people who carried out this reorganisation, at vast public expense, seem to be leaving.

And what are the results?  The trust has the biggest deficit of any Trust in the land.  £94m and counting.

The statistics for the Trust are poor and getting worse in terms of waiting times and outcomes.  Staff are demoralised due to a panic down banding, where all staff had their pay bands reduced.  Thats the way to encourage loyalty!

While waiting lists lengthen, there are two empty floors in the gleaming Royal London towers, with no money to staff them.

The Barts Board have been spending £500,000 per month on management consultants: £7m in 14 months.

The yearly charge on the PFI scheme is at least £54million.

The solutions to these absurdly wasteful policies are obvious.  We fund our health service from central taxation.  That gives you great benefits in terms of planning and control.  The so called ‘internal market’ of the NHS, far from driving up efficiency, has led to profligate waste.  We have a multiplicity of commissioning and contracting bodies, who themselves seem to be endlessly reforming themselves.  In 1974 management costs in the NHS were 5%.  This was probably too low.  But it is now 15% of a vastly bigger budget (even allowing for inflation).  Cut this bill to 10% and this would provide £5b a year freed up for front line services where they are needed.

This can wait no longer.

Only the Green Party and the National Health Action Party stand for a publicly funded AND publicly provided health service.


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