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Thursday 18th July 2019

PFI 'barriers' are not affecting FT status

9th June 2011

Trusts that claimed private finance initiatives were a barrier to them obtaining foundation trust status are unjustified, it has been claimed.


Documents seen by Health Service Journal have revealed that in more than half the cases where trusts made this argument, there was no justification for the case.

The Department of Health has commissioned McKinsey to work with 22 trusts whose PFIs could be an obstacle to their being authorised by April 2014.

A leaked tender document noted that 22 trusts had “either cited PFI as a barrier to them becoming a foundation trust, or have a PFI scheme of a size that could be a significant issue”.

However, HSJ’s source has claimed the true figure is likely to be less than 10 trusts.

Among the 22 are trusts such as Dartford and Gravesham, St Helens and Knowsley, Barts and the London, Walsall Hospitals and West Middlesex.

Of the 22, eight are scheduled to make average unitary payments to developers on their PFI that are 10% or more of their annual turnover before 2014 while four have payments of less than 5%.

While testing the payments against turnover was a good measure, Healthcare Financial Management Association spokesman Chris Calkin warned it was important to recognise the differing scope of PFI contracts.

He said: “PFI hospitals will face a challenge in the future with potentially reducing revenues but largely fixed unitary payments to meet.”

Asset utilisation will be key for trusts in helping to maintain financial viability, said Mr Calkin.


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