Tue, 5 December 2023

Newsletter sign-up

Subscribe now
The House Live All
Early diagnosis and timely treatment: Why both are key to improving cancer survival Partner content
London’s super sewer is nearly here – but we must keep making progress Partner content
By Andy Mitchell CBE, Tideway CEO
Press releases

Government urged to claw back money 'leaking out' of NHS through PFI contracts

John Ashmore

2 min read

The Government must act to recoup millions of taxpayers' money being spent on private finance contracts in the NHS, a health thinktank has said. 

The Centre for Health and the Public Interest (CHPI) said private firms had made £831m in profits over the six years, during a period where the health service has gone through "extreme austerity". 

Under the terms of PFI deals - first introduced under the Tories in the 1990s and expanded under New Labour - private companies pay upfront costs for NHS hospitals and then charge the Government annual fees over a fixed contract term.

The CHPI, which describes itself as an independent, non-party thinktank, wants ministers to bring in new taxes on PFI companies, along with a cap on their profits.

The group also wants to see existing PFI contracts renegotiated or even "bought out" using government loans.

"This report shows for the first time the huge amount of taxpayers' money which is leaking out of the NHS through the profits generated by PFI companies," said CHPI co-chairman Colin Leys.

"Given the extreme austerity in the NHS, where patients are being denied treatment and waiting times for operations are rising, the government needs to take action to stop this leakage of taxpayer funds out of the NHS." 

A spokeswoman for the Department of Health rejected the claims, saying: ""The NHS is recognised by the independent Commonwealth Fund as the most efficient healthcare system in the world and currently spends less than 3% of its annual budget on PFI.

"The first PFI contracts for NHS hospitals, which were signed in 1997, range between 25 and 30 years.

"This report analyses just six years of contracts and, as a result, does not represent the full picture."

PoliticsHome Newsletters

PoliticsHome provides the most comprehensive coverage of UK politics anywhere on the web, offering high quality original reporting and analysis: Subscribe