Press release: NHS hospitals call for PFI process to be updated

29 Oct 2005

The Private Finance Initiative (PFI) process needs updating to make it more effective, according to the early findings of a survey of NHS hospital trusts published by the Future Healthcare Network (FHN) today.

A total of 15 respondents from 13 NHS trusts involved in PFI schemes gave a 'warts and all' view of their experience in confidential interviews conducted by FHN - which is part of the NHS Confederation - on the basis that their PFI projects would not be named.

Following analysis of the survey's initial results, FHN has identified the need to update PFI schemes in its report The Future of PFI and made a series of recommendations that could help this happen.

Sylvia Wyatt, Project Manager of FHN, said: "This is a revealing snapshot of what senior staff working on the NHS frontline really think about PFI because we guaranteed their anonymity.

"All too often public discussion of PFI is conducted along political and ideological faultlines instead of analysing the actual impact of the process.

"We hope that the early findings of our survey will help spark an ongoing debate about how PFI could evolve in both health and other public sector services."

Overall the 13 NHS trusts supported the principle of using private sector investment to finance major NHS building schemes but they said that the PFI process needs to be made more effective so that new hospitals will be more flexible for future healthcare needs.

The formal process for choosing a private sector contractor for an approved PFI scheme is too bureaucratic, too expensive and could result in better designed hospital buildings than it does currently.

Sylvia Wyatt said: "A major complaint from NHS trusts taking part in the survey was that the process of getting a PFI scheme off the ground, and a new hospital built, simply takes too long.

"According to them, it takes on average more than two years to progress from placing an initial advert inviting private sector companies to bid for these schemes to choosing a successful bidder and signing the contract.
"We believe there is scope for cutting both the number of reviews and approvals which are part of the current PFI process. For example, there could be an agreed list of contractors for schemes nationally, which would eliminate the need for the pre-qualification questionnaire (PQQ) stage of PFI."

The survey reveals evidence of declining private sector interest in NHS PFI schemes, as a result of these delays and additional costs.

One FHN member reported that in 1997 there would regularly be more than six bidders at the pre-qualification questionnaire (PQQ) stage of the PFI process, and they would be exclusively British consortia.

Sylvia Wyatt said: "By 2005, some schemes were attracting only one bidder and the consortia formally expressing an interest were increasingly headed by non-British interests.

"We fear that there is a very real risk that private contractors could walk away from both individual PFI schemes and from major PFI healthcare developments as a whole unless the current PFI process is streamlined to reduce the cost both financially and in terms of time."

Other key findings in The Future of PFI include:

• NHS trusts embarking on new PFI schemes are not sufficiently experienced to be a commercial match with private sector teams that move from project to project and therefore have specialist expertise - the Department of Health could look at developing a central training and preparation programme for all NHS trusts that are considering PFI schemes
• PFI will need to adapt to the new NHS world of Payment by Results and Patient Choice in which hospitals will no longer have the certainty of block contracts for fixed volumes of operations and patients will increasingly be able to choose where they are treated - PFI contracts will need to be flexible enough to provide buildings that are built in a way that allows maximum freedom to change the use of areas as new technology and the drive to provide more care outside hospitals both kick in
• Many NHS trusts are disappointed that PFI has not created more exciting and innovative hospital buildings - ways of achieving the best possible quality design should be explored, including design competitions which enable the public and patients to have their say about what kind of hospital they want.

The Future of PFI includes seven key findings from NHS trusts and seven recommendations for the future of PFI which are drawn from early analysis of the FHN survey of 13 NHS trusts - a full report is due to be published at a later date.

ENDS

 

Notes for editors

1. The Future Healthcare Network (FHN), which is part of the NHS Confederation, provides support to its members which are NHS organisations involved in the development of new healthcare facilities, often using PFI or other public-private partnerships - membership of FHN is only available to Confederation members.
2. The NHS Confederation represents more than 90% of the organisations that make up the NHS throughout the UK. Its members include the majority of NHS trusts, foundation trusts, primary care trusts and health authorities in England; trusts and local health boards in Wales; NHS boards and special boards in Scotland; and health and social service trusts and boards in Northern Ireland.

Contact details

For copies of The Future of PFI and further information, contact Media Relations Manager Matt Akid on 020 7074 3306 or 07887 633344 or Media Officer Amy Darlington on 020 7074 3304 or 07767 770309 - out of hours please contact the on-call press officer on 07880 500726.

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