Peterborough and Stamford Hospitals is the NHS Trust that spent the highest percentage (18%) of its annual income on Private Finance Initiative (PFI) charges last year.
The trust has found itself in a dire financial situation in recent times.
It has been left struggling with a £37 million annual deficit after using PFI to build the new Peterborough Hospital.
The 611-bed facility opened in November 2010 at an initial cost of £289 million. However, by the end of the 33-year life of the scheme, its total cost is expected to rise to £2bn.
As a National Audit Office (NAO) report noted, “the trust board had failed to recognise that the scheme would place considerable strains on the trust’s finances for many years to come”.
Peterborough and Stamford Hospitals NHS Trust is not the only one in England that sees a considerable amount of its budget find its way into the pockets of PFI contractors.
Our analysis shows that a dozen of trusts set aside more than 10 per cent of their annual turnover to cover PFI charges.
Some of them are among the most financially troubled in the country with PFI debt arguably causing a terrible knock-on effect on services.
The Sherwood Forest Hospitals NHS Trust, for instance, signed a £976 million PFI for the construction of King’s Mill Hospital in Sutton-in-Ashfield and the refurbishment of Newark hospital in 2005.
HM Treasury figures show that last year it paid back more than £ 46 million for the project, or 17 per cent of its income. The troubled Nottingham trust was put in special measures last year as a result of higher-than-expected death rates.
As a growing number of hospitals face financial problems, the question of how much PFI burden weighs on a trust’s annual budget become ever more pressing.
Larger NHS Trusts, with some notable exceptions, are better-equipped to sustain the burden of PFI.
So, for example, the Central Manchester University Hospital Trust is slapped with a PFI bill of £69 million each year, the third highest in the country. Yet, that only accounts for 7 per cent of their annual turnover.
At the other end of the spectrum there is the Dartford and Gravesham. At £27 million a year its PFI outgoings are relatively small. But they represent a significant burden on the trust’s budget eating up almost 13 per cent of its annual income.
Methodology and data sourcing:
Information on annual unitary charges paid to PFI contractors in 2013/2014 are provided by the HM Treasury and available here.
The income of each NHS Trust has been extracted from annual accounts published on their respective websites.
South London Healthcare NHS Trust has been dissolved in October 2013.
Accounts for the University Hospital of South Manchester NHS Trust are not available online.