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A recent article by the BBC has shed light on a political row which has erupted over the legacy of PFI for the health service as one hospital trust faces insolvency.
South London Healthcare, a merger of three hospital trusts, is spending 14% of its income on repayments to a private finance initiative (PFI).
The government says the financial problems are caused by a PFI scheme signed off under Labour. Labour says there are wider financial pressures in the NHS, and PFI also delivered many new hospitals. The government could appoint an administrator within weeks, but in the meantime the trust’s hospitals will continue to run as normal. The move raises the prospect that other trusts could follow in its wake.
There are another 20 trusts that have declared themselves financially unsustainable in their current form. Work has already started to rectify their problems and therefore wholesale dissolving is considered unlikely.
However, the move over South London Healthcare does act as a warning that the government is prepared to use the measure, which was made possible by legislation Labour introduced in 2009.
You can read more about the BBC’s report here: BBC NHS PFI Report