The government is facing strong criticism for a new initiative. There are growing fears of a new PFI-style disaster within the NHS. Ministers have awarded £6 million in contracts to private firms. Specifically, management consultants Deloitte and lawyers Addleshaw Goddard received £3 million each. Their task is to advise on using private money to build new health centres.
Therefore, the Department of Health is exploring public-private partnerships (PPPs). These partnerships would fund dozens of “neighbourhood health centres”. Consequently, campaigners are sounding the alarm. They warn this could repeat the errors of the Private Finance Initiative (PFI). The PFI scheme left the NHS with massive long-term debts.
However, health Secretary Wes Streeting recently announced the first 43 centre locations. These centres aim to provide community-based care. However, the funding method is now controversial. The explicit fears of a new PFI-style disaster stem from past experience. The National Audit Office previously condemned PFI as poor value for money.
Moreover, campaign group We Own It is leading the opposition. Lead campaigner Johnbosco Nwogbo called private finance a “disaster”. He stated PFI is a “ticking timebomb” for the NHS. Some hospitals now spend more on PFI repayments than on medicines. Nwogbo argues this approach breaches Labour’s election manifesto promise. The party pledged the NHS would remain publicly owned and funded.
Conversely, some health leaders support exploring private investment. Matthew Taylor, of the NHS Confederation, acknowledged the strain on public finances. Moreover, he said private investment might be necessary for modern facilities. However, he emphasized this should not mean resurrecting the old PFI model. He urged ministers to learn from other countries’ use of PPPs.
The government defends its actions cautiously. A DHSC spokesperson said it is exploring a range of options. All proposals will undergo robust value-for-money assessments. The goal is to ensure the best return for taxpayers. The final decision rests with Chancellor Rachel Reeves. She will announce the funding model in the November budget.
The debate highlights a difficult tension. The government needs to build new infrastructure quickly. Yet the public purse is severely constrained. However, the memory of PFI’s failings remains powerful. The strong fears of a new PFI-style disaster will likely dominate discussions. The government must balance innovation with fiscal responsibility and public trust.
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