Commons committee sits on PFI fence

16 May 02
The Commons' health select committee has delivered an equivocal verdict on the Private Finance Initiative in its long-awaited report on private sector involvement in the NHS.

17 May 2002

Committee chair David Hinchliffe is a long-standing critic of the PFI and the report was delayed because of rumoured splits between him and party colleagues on the committee over the strength of criticism of the initiative.

The compromise report, published this week, said many of the benefits claimed for the PFI were unproven and that transactions must be more transparent. But it added that the initiative was not to blame for many of the problems with which it was associated, such as the reduction in hospital bed numbers.

However, it called for the National Audit Office to investigate whether the public sector comparators, used to calculate whether a PFI scheme is value for money, had been manipulated in favour of private finance.

Unison was disappointed with the committee's line. 'It is clear to us that the PFI does not give value for money – we should start looking at funding the NHS through the public sector,' said Karen Jennings, the union's health secretary.

However, Tim Evans, the Independent Healthcare Association's executive director of public affairs, said private finance had always been a part of the NHS.

'We are confident the PFI will be value for money and won't impact adversely on the taxpayer,' he added.

The report came as Health Secretary Alan Milburn announced an extension of public-private partnerships in the health service with a £100m investment in the new NHS Bank, which may take equity stakes in PFI developments.

The select committee report also warned that the health service may not get value for money from buying operations from private hospitals.

It added that it made little sense for the health service to retain its 3,000 pay beds – where patients can pay to be treated privately in an NHS hospital – while buying around 150,000 operations from the private sector this year.


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