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Wednesday, February 3, 1999 Published at 14:22 GMT


Private finance 'increases NHS costs'

Unions claim the private sector pushes up building costs

Using the private sector finance to build new NHS hospitals increases the cost and reduces efficiency, claims health workers' union Unison.

Unison has called on the government to stop the use of the Private Finance Initiative (PFI) in the NHS.

Its demands are based on a report it commissioned into the building of the Dryburn Hospital in Durham, financed by PFI.

The report concluded that the cost of the project was inflated by involving the private sector.

It also states that the hospital will treat fewer patients than it would have done if it were built using public funds.

Estimates taken from the North Durham Acute Hospitals Trust showed the scheme would have cost £153m if funded publicly.

But the actual cost will be £173m.

The hospital now being built will have a maximum of 454 beds. However, the costs of the PFI payments has forced a reduction in clinical staffing budgets which means that only 350 of those beds will be staffed.

[ image: Unison has called for a halt to PFI schemes]
Unison has called for a halt to PFI schemes
The study, by Declan Gaffney, of University College London's School of Public Policy, said that building the hospital with public money would have cost "substantially less" and been more efficient.

Unison's head of health Malcolm Wing said: "The report is a devastating demolition of arguments for the use of PFI in the NHS.

"It is a prescription for treating fewer patients at greater cost.

"Unison urges the Government to halt the PFI process and to ensure that new hospitals are built with no-strings public money."

Doctors oppose the scheme

The British Medical Association is also opposed to the PFI scheme.

PFI was described by former BMA council chairman Sir Alexander Macara as "pernicious nonsense".

Doctors fear that private investors will want a return on their original investment that the NHS cannot afford.

This would lead to money being drained from budgets designed for patient care and staff salaries.

The BMA is also concerned that health authorities are rushing through proposals for new schemes simply to take advantage of private finance opportunities.

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