THE PFI Private Finance Initiative was brought in by the Major Tory government, and while it was opposed by Labour in opposition, it was adopted by Blair and Brown with immense enthusiasm as their big policy for building schools and hospitals, and paying for them later, over 30 or so years.
The banks and the private building consortiums did the building and then leased the buildings to the NHS, often refinancing the deals as they went along, making fabulous profits just like a licence to print money.
What especially appealed to Brown was that he not only won massive support from the bosses and bankers through greatly enriching them, but that PFI became the vehicle for privatising all hospital services.
But now the price, the true bill, is being delivered to the NHS, with £65bn of payments being demanded to cover building costs of £11bn.
This means vital NHS hospitals will have to make savage cuts to keep the Major-Blair-Brown rip-off bargain with the bankers and the bosses.
Hospitals will close and tens of thousands of NHS workers will lose their jobs, unless the PFI deals are ripped up.
The Norfolk and Norwich is one such PFI hospital, one of 103 PFI schemes.
They were collectively valued at a total of £11.3bn when they were built, but rising fees and maintenance costs means that £65bn must be paid back, or else the hospitals or other institutions will be bankrupted and shut.
The NHS currently pays back a total of £1.25bn each year but this figure will reach £2.3bn a year by 2030, with the final payment not to be made until 2048.
As far as the Norfolk and Norwich is concerned, the private consortium Octagon Healthcare raised the initial £229m to build the 989-bed NNUH hospital and the Norfolk and Norwich University Hospital NHS Trust pays it more than £37m a year out of an annual budget of £250m.
After 35 years the hospital will pass into NHS ownership.
Last year, economist Chris Edwards, a Senior Fellow at the University of East Anglia, said more than £200m would be put towards improving patient care if the hospital pulled out of the PFI deal.
Professor John Appleby, chief economist at the King’s Fund said of the PFI schemes: ‘It is a bit like taking out a pretty big mortgage in the expectation your income is going to rise, but the NHS is facing a period where that is not going to happen.’
Householders face eviction; bankrupt hospitals being leased to the NHS face closure.
The BMA stated yesterday that ‘Locking the NHS into long-term contracts with the private sector has made entire local health economies more vulnerable to changing conditions.
‘Now the financial crisis has changed conditions beyond recognition, so Trusts tied into PFI deals have even less freedom to make business decisions that protect services, making cuts and closures more likely.’
There is only one way out of this crisis, that serves the interests of the working class.
Instead of PFI hospitals being declared bankrupt, the PFI contracts must be ripped up, and the banks and financial institutions behind them must be nationalised under workers control.
To do this the present reactionary Tory-LibDem coalition must be brought down.
This means that September’s TUC Congress must demand the cancelling of the PFI deals and declare that it is ready to call a general strike to defend the NHS from the PFI looters, by bringing down the coalition and bringing in a workers government that will carry out socialist policies.