Birmingham PFI gets green light14th April 2006
I have spent much of the last year working with the Birmingham New Hospitals Project Team on the Full Business Case for their £559 million PFI so it is with some personal pleasure that yesterday the Treasury gave the green light to proceed. Hopefully, the signing of contracts with the PFI partner Consort won't be too far behind.
Of course, anyone owning shares in PFI plc would have had a rocky ride over the last few months following the decision by the Government in January to hold back approval on the Barts scheme and the subsequent planning blight which followed on schemes up and down the land.
Essentially, the problem lies in two government intiatives - PFI and Payment by Results - which are incompatible in their current form. Pulling rabbits out of hats is not currently on the PFI checklist but that is what is needed to demonstrate affordability; new hospitals mean higher costs and tariffs are based on the average.
And life isn’t going to get any easier; I have been overwhelmed at the complexity involved in putting together a successful PFI deal and the latest Payment by Results regime is now so sophisticated that it is beyond the comprehension of many NHS managers. There's still lots of scope for big Trust deficits in the future but the scary thing is that locally, managers have less and less control over the most influential factors which will determine whether a Trust succeeds or fails financially...
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