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Joint venture to reduce PFI costs

7th June 2012

New moves are being made to help reduce PFI costs faced by NHS organisations.

The plan comes from University College London Hospitals Foundation Trust, which is looking for a partner in a scheme to cut the annual PFI repayments.

If the trust is successful in a scheme that will focus on renegotiating parts of the contract, it would then be opened out to the rest of the NHS.

UCLH say that any private partner would be paid out of savings achieved, with a cap on the amount it can earn from the arrangement.

Trevor Payne, director of estates and facilities at UCLH, said it had been successful at managing the operational aspects of its PFI deal but was keen to work with a partner with expertise in drafting contracts, particularly in areas such as legal, insurance and financial issues.

He said: “It will be done in a measured way, with a series of business cases which we would choose to pursue or not to pursue so the risk is minimised from an NHS perspective.

“It’s not going to be especially popular with PFI providers. But we are telling them what we want to achieve and are trying to move away from the stick approach.”

The move, welcomed by the Healthcare Financial Management Association, comes after a review of 22 trusts with PFI schemes by McKinsey revealed that some applying for Foundation Trust status were facing challenges.

Spokesman Chris Calkin said: “It is good to see trusts looking at how they can improve value for money on these complex schemes.”

 

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