£65bn NHS mortgage13th August 2010
The BBC has obtained data which reveals the health service faces a bill of £65 billion for the construction of hospitals.
The charge relates to hospitals built as part of the private finance initiative (PFI). Repayments for the "NHS mortgage" are costing some trusts over 10% of their yearly budget.
The terms of the PFI mean that hospitals are constructed and paid for by private firms, then the health service pays back the "mortgage' over a thirty year period.
The cost of the buildings at the time they were constructed was £11.3 billion but the total cost of repayments for the NHS is £65.1 billion.
The date of the last payment is not until 2048. The data shows that the cost of the repayments are increasing, as the health service currently pays back £1.25 billion annually.
The cost of repayments will rise every year until 2030 when it reaches £2.3 billion.
Professor John Appleby, chief economist at the King's Fund, said: "It is a bit like taking out a pretty big mortgage in the expectation your income is going to rise, but the NHS is facing a period where that is not going to happen."
"Money is being squeezed and the size of the repayments will make it harder for some to make the savings it needs to. I don't see why the NHS can't go back to its lenders to renegotiate the deals, just as we would with our own mortgages."
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Title: £65bn NHS mortgage
Author: Jess Laurence
Article Id: 15784
Date Added: 13th Aug 2010