The private finance initiative (PFI) scheme used to finance the building of a new hospital for the Worcester Royal Infirmary will leave Worcestershire with one of the lowest levels of hospital provision in the country, a report published last week claims.
The report, published by the health policy and health services research unit at University College London, also claims that the resulting downgrading of services at Kidderminster will leave the town with a clinical centre that is widely regarded as unsafe.
The authors of the report, Professor Allyson Pollock, David Price, and Dr Matthew Dunnigan, attack the initiative—which is the mechanism used by the government to raise capital investment for the NHS—on the grounds that it puts up costs and results in public money going into private pockets.
Capital is raised by the private sector, usually in the form of a consortium, which then builds the hospital and leases it back to the public sector for periods of up to 60 years. The annual charges are funded out of the hospital revenue budgets.
The report uses official figures to show how a deficit of £15m ($22.5m) for NHS services in Worcestershire, coupled with a bill for the new hospital that was more than double what was expected, have forced the health authority to cut hospital services across the county.
The cost of the new PFI hospital escalated by 118% during negotiations, from £49m in 1996 to £108m in 1999, necessitating the downgrading of Kidderminster hospital. Much of the cost increase was due to the extra costs of financing that would not have been incurred under a public sector option.
Worcestershire Health Authority believes that the report is flawed, because it leaves out the Alexandra Hospital and all five community hospitals from the analysis of available bed numbers. Harold Musgrove, chairman of Worcestershire Acute Hospitals NHS Trust, said: “The new hospital will be ready on time, it has been planned to have enough capacity to cope with the expected patients who will use it, and costs have not risen by 118%.”
The downgrading of Kidderminster hospital has led to a local battle to save it. Out of 42 councillors on the local Wyre Forest Council, 19 are “single issue” councillors fighting to prevent the hospital closure. Three Liberal councillors have formed the “Liberal Party Save Our Hospital Group,” giving an overall standing majority of councillors who are focusing on this issue.
Projected numbers of NHS beds per head of population across the catchment area will fall to 41% of the current national average for England when the new PFI hospital opens, the report says.
Deficits Before Patients: A Report on the Worcester Royal Infirmary PFI and Worcestershire Hospital Reconfiguration is available free from the School of Public Policy, University College London (tel 020 7679 4983).