Labour MPs urge Reeves to drop private finance plans for NHS buildings | Private finance initiative
Rachel Reeves has been called on by 40 Labor MPs to abandon plans to fund NHS buildings through private finance initiatives (PFI); These plans will put the health service in debt.
Labor MPs, including Cat Eccles, Clive Lewis and Rebecca Long-Bailey, pressed the chancellor to invest in the NHS without using private capital and warned that a return to New Labour-era private funding for public projects would undermine confidence in the government.
“We ask you to learn from past mistakes. We need to reject the idea that private financing can be used to create public services that will benefit the public in the long term,” they said in their letter. “We ask you to please remove new private funding plans in the NHS from the autumn budget and future policies.”
Although originally conceived under the Conservatives, Tony Blair’s Labor government made significant use of PFI, a type of public-private partnership used to build schools, hospitals and other public infrastructure without increasing the national debt.
Dozens of Labor MPs said in a joint letter that using private partnerships was more expensive than publicly funded projects and had contributed to crippling debt in the NHS since 1997, with 80 trusts still repaying a total of £44bn, with services struggling.
“As I’m sure you’re aware, using private funding to build new healthcare facilities does not bring new money into the NHS; it is simply an expensive way to borrow money that future generations of taxpayers will have to pay back,” the MPs said.
“It is also unlikely that using private finance will allow you to remain within your current rules on investment and borrowing, even if it is classified off the public sector balance sheet.
“Office for Budget Responsibility stated In 2017 he said using ‘off-balance sheet’ financing for public infrastructure to circumvent borrowing rules amounted to ‘fiscal illusion’ and that it should only be used if there was clear value to justify the money.
“However as National Audit Office was established in 2017 “There is no evidence that these schemes provide value for money, with PFI hospitals costing 70% more than the publicly funded option.”
UK infrastructure strategy And 10 year health plan Talk about exploring the use of private capital to fund the construction of NHS facilities, including neighborhood health centers (NHCs).
MPs drew attention analysis This suggests that using private finance for small-scale projects represents worse value to taxpayers than using it for larger projects. NHCs are likely to be closer in character to these small-scale projects than to large hospitals.
More than 50 academics, including Labor colleague and accounting expert Prem Sikka, have written to the chancellor, asking him to “abandon this dangerous and damaging proposal and fund public services through direct taxation or borrowing”.
Labour’s manifesto at the general election stated that, with Labor, the NHS “will always be publicly owned and publicly funded”.
Health secretary Wes Streeting sought to reassure MPs that any new use of private funding in the NHS would be limited and targeted and aim to avoid the mistakes of the PFI.
A government spokesman said: “This government is committed to shifting health from hospitals to the community, as set out in the 10-year health plan.
“As set out in our 10-year infrastructure strategy, we are exploring the feasibility of using new public private partnership (PPP) models for taxpayer-funded projects in very limited circumstances where they could represent value for money, such as certain types of primary and community health infrastructure or the decarbonisation of wider public property.
“The design and development of any future PPP model will be based on lessons learned from past and current models.”
