NHS FACES £7 BILLION BILL FOR LABOUR'S PFI OBSESSION

NHS FACES £7 BILLION BILL FOR LABOUR'S PFI OBSESSION

PFI DEBT PAYMENTS HIT AT SAME TIME AS ECONOMIC CUTS

Nearly £6.7 billion will leave the NHS over the next 30 years in repayments to banks and private operators for Labour’s PFI projects.

The astonishing £6.7 billion of repayments under Labour’s “buy now pay later” policy covers 27 capital projects with an estimated value of only £1.28 billion and comes after £1 billion of repayments have already been made.

The dramatic rise in PFI/PPP repayments will take place over the same period as the Chief Economist expects to see £25 billion taken out of Scotland’s budget as public spending is cut at Westminster in response to Labour’s economic mismanagement, worsening the impact of Labour's financial mismanagement on Scotland’s public sector.

From 2011-12 over £200 million a year will leave the NHS in repayments, peaking at 281.5 million in 2027.

Figures produced by the Scottish Parliament Information Centre and based on information from the Treasury show that in Labour’s final NHS PPP deal signed on 1st May 2007 they agreed repayments of £1.7 billion for the new acute services hospital at Larbert – which has an estimated capital cost of only £293 million.

NHS Lothian is currently making repayments totalling £35.4 million for Ellen’s Glen House over 13 times the estimated capital value of only £2.7 million.

In a further example of Labour’s mismanagement £663 million will be paid by NHS Lanarkshire for Hairmyres hospital in East Kilbride – 10 times the estimated capital cost of £68 million.

The SNP revealed earlier this week that for three hospitals built under Labour (Edinbugh, Wishaw, Hairmyres) repayments over the next five years will exceed the capital cost of the hospital’s themselves.

SNP MSP Kenneth Gibson condemned Labour’s financial management and said it was clear the NHS would be paying the price for Labour’s reckless ways.

The dramatic rise in PFI/PPP repayments will take place over the same period as the Chief Economist expects to see £25 billion taken out of Scotland’s budget as public spending is cut at Westminster in response to Labour’s economic mismanagement, worsening the financial picture facing Scotland’s public sector.

Commenting on the figures Mr Gibson said:

“The folly of PFI has never been clearer. Every penny paid out in PFI or PPP repayments is a penny less in the NHS over the next 30 years.

“The NHS will be paying the price for Labour’s reckless buy now, pay later policy for decades to come.

“As Labour’s economic mismanagement leads to tightening public sector budgets - paying nearly £7 billion out over the next 30 years for projects with a value of only £1.2 billion makes a mockery of any claim to responsible government or economic credibility Labour had.

“Labour cannot ignore their responsibility for these outrageous debts or escape from the impact they will have on public sector budgets at the worst possible time.

“With the Chief Economist predicting £25 to £35 billion will be taken out of the Scottish budget over the next 15 years these damning PFI debts add another £7 billion to those cuts.”