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East Lancs hospitals must cough up £1bn
CAMPAIGNERS fear East Lancashire’s troubled hospitals will struggle to address their problems while a ‘rip-off’ contract with the private sector remains in place.
The Royal Blackburn and Burnley General, which are in special measures, are tied into long-term ‘mortgages’ under the Private Finance Initiative (PFI), with the combined annual payments now standing at more than £20 million.
The Royal Blackburn and much of Burnley General were built by private companies in 2006, at a combined cost of about £140 million, but East Lancashire Hospitals NHS Trust (ELHT) will have to pay back almost £1 billion by the year 2041, due to interest charges.
Burnley MP Gordon Birtwistle, said: “I’m really worried about these crippling costs, especially at a time when the trust is desperately trying to make improvements.
“These contracts are a complete and utter rip-off and the private companies are creaming off NHS money that should be spent on treating patients. It’s going to stay like that for another 30 years or so and they can’t get out of it.”
A Kent-based firm called Consort Healthcare (Blackburn) Limited built the Royal Blackburn Hospital at a cost of £109 million, and will receive £796 million from the trust over 36 years. The deal includes other services such as maintenance, security, window cleaning and pest control.
The Burnley contract, which saw £30 million spent on the Phase 5 area of the hospital, is held by Manchester-based SPC Ltd Facilities Management.
The trust will have to pay back £181 million over 35 years, with the deal including security and car parking services.
But Jonathan Wood, director of finance at ELHT, said: “The cost of running the trust’s estate (including the two PFIs) and associated services has been benchmarked and is in line with other similar sized NHS providers.
“In many respects a PFI contract can be compared to having a mortgage with a few additional extras, including responsibilities for maintaining our buildings, security arrangements, car parking and window cleaning.”
Russ McLean, chairman of the Pennine Lancashire Patient Voices Group, said: “I’m absolutely appalled to think of that huge amount of money disappearing from the local health economy, at a time when the trust is already having to make huge cost savings.
“That money would have been better spent improving healthcare.”
However, Blackburn MP Jack Straw defended the Blackburn deal, saying it was the ‘only possibility for a new hospital’ at the time.
PFI was introduced by the Conservative government in the 1990s, but expanded dramatically by Labour as a means of enabling private investors to take on the financing, construction and operation of public sector infrastructure projects.