Yes, the NHS has PFI debts – but put the blame where it’s due… on the TORIES

Okay, the image is a little out of date, but the message is clear: The blame for the crisis in the NHS lies squarely with the Conservative governments – of Theresa May, certainly, but also of John Major, David Cameron, and now of Boris Johnson.

The legacy of the harm done to the National Health Service by the Conservative governments of Margaret Thatcher and John Major has been brought into sharp focus by a new think tank report.

The IPPR think tank has published research showing that NHS trusts will have to pay out £55 billion to Private Finance Initiative (PFI) investors by 2050, having already paid £25 billion.

PFI was used extensively by the New Labour government of Tony Blair to bring desperately-needed investment into the NHS after the Tories bled the service dry.

Hospitals were found to be in severe disrepair and treatments badly underfunded when the Blair administration came into office in 1997, and PFI was considered the only option to restore the service to full functionality.

In total, £13 billion was invested in the NHS during the New Labour years. This will cost the service an eye-watering £80 billion by the time the contracts end in 2050.

It might have been possible to pay these off without difficulty, if Labour had stayed in power. But, as we know, that did not happen.

The Conservatives slithered back into office in 2010, supported by their nasty little yellow helpers, the Liberal Democrats, and NHS funding began to fall at once.

The introduction of private, profit-making companies into the publicly-funded health provider meant billions of pounds were siphoned off into the bank accounts of shareholders, rather than being used to treat patients.

And a huge amount of money has been used in litigation after certain private companies took to the courts to contest failures to gain contracts.

So, while the Tories have been able to claim that investment has increased, real-terms funding for the health service has fallen.

It is in this context that we see health trusts have been burdened with an obligation to use around one-sixth of their annual budgets paying off PFI debts.

It would be easy to blame New Labour for the fact that NHS trusts have been falling into debt. It would also be wrong.

New Labour did what it had to, in order to ensure continuity of care – and to keep healthcare up to date.

It was the Conservatives who forced New Labour into PFI by starving the NHS to the bone, and it is the Conservatives who are forcing the NHS into debt – once again by starving it of funds.

This is evidenced by the fact that the Department of Health has raided £4.1 billion from the NHS’s capital funding budget – which should repair the service’s buildings, build new facilities and buy new equipment – simply to pay day-to-day running costs.

Make no mistake – PFI was a bad idea when John Major introduced it to government budgeting strategies, and Tony Blair should never have been put in a position where it was the most acceptable choice to fund the NHS.

But if we’re going to blame anyone for the current situation, blame the Conservatives – because they deserve it.

Source: NHS hospital trusts to pay out further £55bn under PFI scheme | Politics | The Guardian

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No Comments

  1. Simon Cohen September 28, 2019 at 4:38 pm - Reply

    ‘PFI was considered the only option to restore the service to full functionality.’

    With an emphasis on ‘was considered.’ There never was any need for PFI, it was a neo-liberal construct. During the B.Liar(sic) years there were surpluses and in any case there was never a real need to keep PFI afloat, it could have been cancelled but because B.Liar turned Labour into ‘Tory Lite’ they carried on -ghastly and shameful that a Labour Party did this just as it presided over a massive housing and land speculative boom that led to the great Financial Crash.

    B.Liar and Brown have zero excuses. Let’s not let them off the hook.

    • Mike Sivier September 28, 2019 at 6:46 pm - Reply

      Fine, but what I’m saying is don’t let the Tories off the hook, which is what might happen if we don’t bear in mind what put the NHS in trouble then, and who’s causing it now.

  2. Simon Tucker September 28, 2019 at 4:49 pm - Reply

    You are being too kind to Blair and Brown. They deliberately followed the PFI route so they could keep public spending off the P&L, instead of using the addition of assets to the balance sheet, and the massive expansion of the NHS’s capabilities, as the positive offset. It was the Enron principle which has badly affected all public works for 3 decades.

    • Mike Sivier September 28, 2019 at 6:43 pm - Reply

      It’s a point of view. You agree that the Tories caused that situation and are worsening it now, though, I hope.

      • Simon Tucker September 29, 2019 at 11:17 am - Reply


    • poppy September 29, 2019 at 6:38 am - Reply

      You could see a Doctor under Blaire you were given hospital appointment after only waiting a very short period of time you had a dentist you could get eyes tests every year not any more I have been waiting up to six weeks to see my G.P I have heart problems I have waited 5 months to see a heart surgeon I can only have my eyes tested every 2 years and as for a dentist no point in trying unless you can pay they don’t want to know , So yes Blaire brought in ppi for sure and while I have no time for Blaire at least he tried this lot we have now don’t care life is much harder when you are sick , All this talk about new hospitals will never happen and until we wake up to the fact they are selling the NHS off they will keep shafting us .

      • Simon Tucker September 29, 2019 at 11:16 am - Reply

        That is a different issue. Blair and Brown did a lot of good on staffing, waiting times and rebuilding infrastructure. They need to be applauded for that, but you have to accept that they embraced PFI because they fell into the Tory trap of public sector spending = bad / private sector spending = good.

        The Labour Party should announce that they will investigate all PFI contracts with a view to making them null and void, whilst seeking evidence of fraud and profiteering.

  3. Lawrence S. Roberts September 28, 2019 at 8:10 pm - Reply

    Don’t forget Blair and Brown where into PFI for convenience sake.
    Some of us said at the time that there where other ways of doing it
    but Blair and Brown have the nice pensions and we don’t.

  4. lallygag26 September 29, 2019 at 7:40 am - Reply

    The Americanisation of the NHS has been an ongoing project for 30+ years. The Tories took advice from Kaiser Permanente lobbyist Alain Einthoven to create the internal market as the start of a project they actually said in parliament would take 40 years to complete. Blair’s 1997 manifesto said Labour would reverse the market and remove privatisation from the NHS. His passionate speech to Conference on the subject and the Labour landslide in 97 had me (and many others) crying with joy after the misery of the Thatcher/Major years.

    Instead he used his promised huge increase in expenditure to persuade NHS managers and top clinicians to go along with his privatisation plans. He copied Bevan’s ‘stuff their mouths with gold’ tactic for the opposite purpose and it worked. He says so – explicitly – in his autobiography. He said he was determined to put the private sector on a par with the public sector and break down what he called ‘ideological’ barriers. He intended to make the changes so profound they would be ’irreversible’ – his word. He said in Parliament that he was correcting the ‘mistakes’ of the 1948 Act that created the NHS. And they brought in United Health of America to ‘teach’ Primary Care Trusts how to operate like Medicare – and Kaiser Permanente to teach the trusts how to do it. PFI is a minor crime (and there was literally no excuse for PFI) by comparison.

    If it had just been that we wouldn’t be moving so rapidly to US based Integrated Care now (due to be completed by Johnson’s government by the sound of the leaks from Downing Street). The idea too that PFI was the ‘only option’ is also misplaced. It was part of the privatisation. Governments never ‘need’ to hide their expenditure – in fact Blair made a real issue of the extraordinary increase in revenue spending during his tenure.

  5. Meryl September 29, 2019 at 8:45 am - Reply

    The tories started pfi but labour were responsible for the vast majority of the contracts

    • Mike Sivier September 29, 2019 at 11:06 am - Reply

      Look, everybody! Here’s someone who has read the article but still unaccountably blames Labour for what the Tories did to the NHS and our national finances in the 1980s and 90s. Must be a Tory.

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