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Sunday, 25 February

NHS PFI - Report Claims Excessive Profits Are The Norm

A Centre for Health and the Public Interest (a supposedly independent body) report out this week ending Sept 1 looks at the profits made by PFI companies from NHS contracts over the last six years - and they're not entirely impressed.

The report says analysis of accounting data from the Treasury and Companies House for the period 2010 to 2015 finds:

  • Over the past 6 years, companies which run PFI contracts to build and run NHS hospitals and other facilities have made pre-tax profits of £831 million.
  • If the NHS had not been paying profits on PFI schemes, deficits in NHS hospitals would have been reduced by a quarter over this 6 year period.
  • Over the next five years, almost £1 billion of taxpayer funds (£973 million) will go to PFI companies in the form of pre-tax profits – equivalent to a quarter (22%) of the additional amount of money (£4.5 billion) that the government has promised the NHS over this period.
  • A number of PFI schemes are generating particularly high pre-tax profits for their operators. The company which holds the contract for the hospital at University College London has made pre-tax profits of £190 million over the past 11 years. This is out of £527 million paid to the company by the NHS. The total value of the hospital is £292 million.

Just 8 companies own or have equity stakes in 92% of all the companies holding PFI contracts with the NHS – meaning that there is very little competition between the companies bidding to build and run NHS PFI hospitals, it is said.

 

The report makes a number of recommendations to curtail excess profits, including:

  • Using public sector loans to buy-out PFI contracts.
  • Taxing PFI companies to recoup some of the profits which have been made.
  • Capping the amount of profit which can be made by a private company which has an exclusive public sector contract with the NHS.
  • Sharing out the profits made from sales of equity stakes in PFI contracts.
  • Mandating greater transparency of equity sales to prevent the unnoticed consolidation of market power by a small number of investors.
  • Re-negotiating contracts with the private companies to reduce the amounts the NHS has to pay.

Picture: Main - the hospital at University College London. Below - the cover of the report

Article written by Cathryn Ellis

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