Private investors earned more than £523 million in profits and interest payments from hospital contracts with 36 NHS trusts over the past five years, analysis by EveryDoctor shows.
Those returns alone would have covered almost all of the £565 million in urgent repairs those same trusts reported needing last year.
EveryDoctor analysed five years of accounts for 37 project companies behind those contracts, which were signed under the private finance initiative (PFI). Under PFI deals, trusts agree to pay annual fees, often for up to 30 years, in return for companies financing, building and maintaining new facilities.
Six of the project companies – owned by infrastructure investors HICL and InfraRed Capital Partners – were penalised by NHS trusts for poor performance during the same period, yet still recorded tens of millions of pounds in profit.
How we got to this point
PFI was introduced in 1992 as an alternative to delivering new infrastructure through public borrowing and expanded rapidly after 1997. New projects were halted in 2018 after the National Audit Office concluded the model offered poor value for money.
Where we are now
In 2025, the government announced plans to explore a revised form of private finance to help deliver new neighbourhood health centres, even as NHS trusts still face more than £21bn in future payments on existing PFI deals.
Today, many of those long-term contracts sit in the hands of a handful of infrastructure funds. Just four investors – Semperian, Alba Infra Partners, HICL Infrastructure and InfraRed Capital Partners – now own the 37 project companies analysed.
EveryDoctor found that most investor returns from PFI deals were paid not as profit, but as interest on shareholder loans. Over five years, more than £326 million flowed out of project companies in this way, compared with £196 million recorded as profit after tax.
These figures represent only a fraction of the continuing cost of PFI to the NHS. EveryDoctor examined just 30% of the more than 120 projects still in operation, using five years of accounts. Most contracts run for 25 to 30 years.
Prem Sikka, a Labour peer and professor of accounting at the University of Sheffield, told EveryDoctor that:
“PFI extractions are a major source of the NHS crisis. Successive governments have prioritised corporate profits over people’s healthcare. Profits leave less for frontline services. Money buys less and increases people’s misery. PFI is highly inefficient as direct government funding can finance the facility at a much lower price.”
The PFI contracts analysed by EveryDoctor were signed with 36 NHS trusts across the country and range in scale from brand new hospitals, such as the 611-bed Peterborough City Hospital opened in 2010, to smaller projects including radiology departments and mental health centres.
How these contracts work
Before PFI was introduced, new NHS facilities were typically funded through public borrowing. The NHS then owned and operated the buildings once they were completed, while the Treasury met the borrowing costs through its budgets.
Under PFI, NHS trusts commissioned private consortia not only to build facilities but also to raise the finance needed to construct them. Once the buildings were delivered, the project companies retain ownership for the life of the contract and continue to provide some services and maintenance.
In return, NHS trusts commit to pay an annual fee, known as a unitary payment, usually for 25 to 30 years. These payments cover the companies’ capital costs, interest on borrowing, servicing and maintenance, and a return for investors.
Historically, many PFI projects were kept off the government’s balance sheet, meaning the spending did not initially appear as public borrowing, while NHS trusts still had to meet the unitary payments from their budgets.
The private companies involved in the deal – which typically include a construction firm, a facilities management provider, and an investment company – form a joint venture known as a special purpose vehicle (SPV) to run the project.
For example, St George’s University Hospitals NHS Foundation Trust signed a PFI contract in 2000 for a new state-of-the-art wing specialising in neurology and neurosurgery at St George’s Hospital. The capital cost of the building was £46.1 million, according to the Treasury’s PFI project database.
Three companies were initially involved in the project: Canmore, which acted as the lead project developer; M J Gleeson, a construction company; and Noble & Company, a Scottish investment bank. Together, they formed a SPV to manage the project after the contract was signed.
Shareholders in PFI projects can, and often do, change over time. Today, the SPV which holds the PFI contract for St George’s Hospital neurology wing is owned through BIFM Infrastructure, an investment fund managed by Franco-British investment firm Alba Infra Partners.
The fund’s investors are not publicly disclosed, but infrastructure funds of this kind typically attract pension funds, insurance companies, sovereign wealth funds and endowments.
Investors expect a steady income stream in return for committing their capital. In many PFI projects, part of that investment is structured as a loan to the project company, or SPV. Unlike a normal bank loan, the debt is not paid down over time but sits on the company’s books for decades, accruing interest each year.
In this case, the interest rate on that shareholder loan is 17%, around two and a half times higher than the rate charged by the bank financing the same project. That amounts to around £2.6 million in interest payments each year, which St George’s University Hospitals NHS Foundation Trust must cover through its annual PFI payments.
By contrast, at the time the contract was signed, the cost of long-term government borrowing was around 5%, based on the yield on 20-year gilts cited by the National Audit Office. In effect, this means the cost of financing St George’s new hospital wing through PFI is several times higher than it would have been had the government borrowed the money directly.
There is one other added benefit of paying out investors through interest payments on loans, rather than through profits: interest is treated as a cost before profit is calculated. That means the taxable profits recorded by the project companies are reduced compared with paying the same sums out of profits.
In addition to those interest payments, the SPV recorded more than £15m in profits after tax and paid out almost £1.5m in dividends since 2020.
The figures speak for themselves. Hundreds of millions of pounds have flowed to infrastructure funds while NHS trusts struggle to maintain safe buildings and deliver care. PFI was sold as a solution to public funding constraints. In practice, it has locked the health service into decades of higher costs and financial engineering that prioritises investor returns. With ministers now exploring a new generation of public-private partnerships, the risk is not theoretical. The NHS cannot afford to repeat a model that has already cost it so dearly. (Dr Julia Patterson, Chief Executive, EveryDoctor)
EveryDoctor approached Semparian, Alba Infra, InfraRed for comment but did not receive a response. HICL Infrastructure declined to comment.
Methodology
EveryDoctor selected a sample of 37 NHS PFI projects for detailed analysis.
We focused on projects held within the portfolios of the four infrastructure investors with the largest number of NHS PFI contracts between them: Semperian, Alba Infra Partners, HICL Infrastructure and InfraRed Capital Partners. These investors were identified through earlier research mapping the ownership structures of NHS PFI project companies.
For each of the 37 projects, we examined the five most recent sets of published accounts filed at Companies House by the special purpose vehicle (SPV) responsible for the contract.
Because SPVs have different accounting year ends, our analysis uses the latest five full accounting years available for each company rather than fixed calendar years.
From each annual filing, we recorded:
- turnover
- profit after tax
- dividends paid
- interest paid on loans to group or related undertakings
We then aggregated these figures across the SPVs associated with each investor to provide an indication of the scale of returns generated within their NHS PFI portfolios.
However, EveryDoctor’s analysis also does not capture profits made by service providers, gains from refinancing or asset sales, or fees charged higher up the ownership chain, meaning the true returns to investors are likely to be higher than the accounts studied suggest.
Our case study of the PFI project at St George’s University Hospitals NHS Foundation Trust is based entirely on figures drawn from the published accounts of the relevant SPV.
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