The folly of PFI exposed

The cost of hospital building will put huge pressure on the NHS at the worst possible time.

The time to say "I told you so" might have arrived for Public Finance Initiative naysayers. The BBC reports today that due to some cunningly engineered PFI contracts, the health service in England will end up paying £65bn to private contractors for hospital building.

This figure is shocking, given that the actual value on completion of the 103 hospitals was just £11.3bn. This means that, in effect, private companies are charging the state a premium of more than £50bn for building and mainaining these hospitals.

Those versed in the skulduggery of PFI -- whereby a private company builds public infrastructure and then leases it back to the state -- will cast a weary eye over these figures. As George Monbiot pointed out over a year ago, the way the contracts are put together is unnecessarily complicated, and primarily aimed at keeping these liabilities off the state's balance sheet (though this no longer holds).

As Monbiot notes, the "public-sector comparator" used to assess the relative cost of public and private finance for these projects was deeply flawed. This is particularly galling, as the one of the main arguments in favour of using PFI was that it was more efficient than the public sector.

These huge NHS bills for patient care could have dire consequences for patient care. As the British Medical Association notes:

The inflexibility of PFI contracts means that it is more likely that hospitals will make cuts to services to meet their PFI repayments.

The whole sorry saga ought to make us look with trepidation on the government's cheerleading for the role of the private sector in a revamped NHS. It is yet more evidence of the reduced accountability that goes hand in hand with greater private-sector involvement -- a gap that David Cameron's "big society" is yet to address.

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Who will win the Copeland by-election?

Labour face a tricky task in holding onto the seat. 

What’s the Copeland by-election about? That’s the question that will decide who wins it.

The Conservatives want it to be about the nuclear industry, which is the seat’s biggest employer, and Jeremy Corbyn’s long history of opposition to nuclear power.

Labour want it to be about the difficulties of the NHS in Cumbria in general and the future of West Cumberland Hospital in particular.

Who’s winning? Neither party is confident of victory but both sides think it will be close. That Theresa May has visited is a sign of the confidence in Conservative headquarters that, win or lose, Labour will not increase its majority from the six-point lead it held over the Conservatives in May 2015. (It’s always more instructive to talk about vote share rather than raw numbers, in by-elections in particular.)

But her visit may have been counterproductive. Yes, she is the most popular politician in Britain according to all the polls, but in visiting she has added fuel to the fire of Labour’s message that the Conservatives are keeping an anxious eye on the outcome.

Labour strategists feared that “the oxygen” would come out of the campaign if May used her visit to offer a guarantee about West Cumberland Hospital. Instead, she refused to answer, merely hyping up the issue further.

The party is nervous that opposition to Corbyn is going to supress turnout among their voters, but on the Conservative side, there is considerable irritation that May’s visit has made their task harder, too.

Voters know the difference between a by-election and a general election and my hunch is that people will get they can have a free hit on the health question without risking the future of the nuclear factory. That Corbyn has U-Turned on nuclear power only helps.

I said last week that if I knew what the local paper would look like between now and then I would be able to call the outcome. Today the West Cumbria News & Star leads with Downing Street’s refusal to answer questions about West Cumberland Hospital. All the signs favour Labour. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.