Baroness Redfern – 2016 Parliamentary Question to the Department of Health
The below Parliamentary question was asked by Baroness Redfern on 2016-03-08.
To ask Her Majesty’s Government what assessment they have made of the current and future financial impact of private finance initiative projects on NHS Hospital Trusts (1) nationally, and (2) in Yorkshire and Lincolnshire.
Lord Prior of Brampton
HM Treasury holds information on the current estimated revenue payments for the lifetime of each health sector private finance initiative (PFI) in a live online database. This shows that for the 106 National Health Service PFI schemes that have now been signed, the estimated total revenue payments (over the lifetime of their contracts) are £79.0 billion (in nominal terms i.e. including an inflation assumption). This is from the date of the first construction completions in 2000-01 to the date of the very last payment in 2049-50. The revenue payment figures include not just the financing costs (debt repayment and interest) for initial construction but also the costs of all the other services such as building maintenance and support services (cleaning, catering, portering etc) provided over the lifetime of the contract. The payments are subject to meeting agreed performance and quality standards and include an annual uprate assumption for inflation of 2.5%.
This Government launched an initiative in 2011 to extract savings and optimise value for money in operational PFI contracts. This included a pilot exercise at a major NHS PFI scheme which resulted in guidance with appropriate methodology and lessons learned being issued to all relevant NHS trusts in 2012. The Department has specialist officials to assist trusts in implementing the guidance.
An extract giving details of PFI schemes in Yorkshire and Lincolnshire is attached.
Further information on PFI projects nationally can be accessed via HM Treasury’s website as follows. The files are too large to attach to this reply, however when searching, the ‘Current projects as at 31 March 2015’ spreadsheet should be opened. This will show the latest estimates collected from each department as at the end of March 2015; the health sector schemes are clearly marked “Department of Health” and then “DH-Acute (i.e. Hospitals)”. The initial capital cost of each scheme is shown in Column R and the annual revenue payment in the columns headed ‘Unitary Charge Payment’ (UCP). The total of UCPs (England) for 2014-15, the latest audited figure (Column AO), is £1.9 billion.
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