The NHS is haemorrhaging billions to private companies through Private Finance Initiative (PFI) contracts at a time when the health service desperately needs investment in staff and infrastructure. An EveryDoctor investigation has uncovered that 69 NHS trusts in England are locked into paying more than £21.1bn to private companies over the next two decades – money that could be spent on doctors, healthcare staff, patients, and critical repairs.
A total of 69 NHS trusts in England have committed to pay more than £21.1bn to private companies under their private finance initiative (PFI) contracts over the next two decades.
The total sum includes capital and interest repayments and also service costs which trusts are obliged to pay to the providers.
In the last five years alone, trusts spent more than £1.2bn in total paying off the debt on their PFI contracts and more than £1.8bn on interest charges.
To put those figures in perspective, the £1.8bn spent on interest payments would have paid for the starting salaries of 50,044 new doctors. (The starting salary for a resident doctor, formerly known as a ‘junior doctor’, is now £36,616.)
The total spent on PFI debt and interest payments (£3.1bn) would have been more than enough to pay for all the most urgent repairs required to NHS buildings. The total cost to eradicate the high risk maintenance backlog in the NHS, in England alone, reached £2.7bn last year.
The NHS deems maintenance as high risk when it must be addressed as “an urgent priority in order to prevent catastrophic failure, major disruption to clinical services or deficiencies in safety liable to cause serious injury and/or prosecution.”
EveryDoctor obtained the figures through analysing the annual accounts of 35 trusts and from responses to Freedom of Information (FOI) requests from a further 34 trusts.
Who owns the companies behind PFI contracts?
As part of our research we also analysed the private companies who signed contracts to provide a total of 96 PFI buildings to the NHS.
PFI contracts are usually signed with a consortium made up of a construction firm and a bank, which raises the finance for the construction. But the ultimate owner can be difficult to ascertain as the concession holders can change hands.
We found that the majority of PFI projects are controlled by four companies: Semperian, BIIF, Sun Life Financial and Innisfree Group.
Semperian, which appears to be the largest owner of NHS PFI projects, is an investment fund based in Jersey, a tax haven. NHS trusts have paid the company more than £197m in debt and interest repayments over the past five years alone.
The next largest PFI provider is a limited partnership called BIIF. The company appears to have taken on PFI schemes that were previously owned by Barclays. It is not clear if there is a majority stakeholder, but stakeholders include the pension fund of weapons manufacturer BAE Systems, according to filings on Companies House.
Sun Life Financial, a Canadian life insurance company, is the ultimate owner of 12 PFI projects.
Innisfree Group, founded by South African-born property investor David Metter, holds the concession for eight PFI projects and has stakes in at least three others.
Two PFI projects are ultimately owned by US private healthcare giant United Healthcare.
Stichting Pensioenfonds Zorg en Welzijn, the second largest pension fund in the Netherlands, has stakes in four PFI projects.
These findings highlight the urgent need to protect and strengthen our NHS as a publicly-owned service. The scale of private profit being extracted from our health service through PFI deals threatens the founding principles of the NHS – that it should be publicly owned, publicly run, and free at the point of use.
If you believe the NHS should serve people, not profit, join us and sign the EveryDoctor Charter. Together, we can build a movement powerful enough to defend these principles and secure the future of our National Health Service.
