The private finance initiative: The politics of the private finance initiative and the new NHS

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Abstract
This is the last of four articles on Britain's public-private partnership in health care We began this series by arguing that the private finance initiative, far from being a new source of funding for NHS infrastructure, is a financing mechanism that greatly increases the cost to the taxpayer of NHS capital development.1 The second paper showed that the justification for the higher costs of the private finance initiative—the transfer of risk to the private sector—was not borne out by the evidence.2 The third paper showed the impact of these higher costs at local level on the revenue budgets of NHS trusts and health authorities, is to distort planning decisions and to reduce planned staffing and service levels.3 All this raises questions about the direction of government policy on the NHS. Recent government commitments to increase clinical staffing levels and reverse the decline in bed capacity sit uneasily with a policy that seems to lead in the opposite direction. The government has consistently argued that the private finance initiative is no more than a procurement policy, with no implications for services other than increased efficiency. However, this ignores the importance of public-private partnerships to the government's overall agenda. #### Summary points The private finance initiative does not provide new money for public services as the government claims The high costs of capital under the private finance initiative translates into service and workforce cuts The reduction in public provision of long term care, NHS dentistry, optical services, and elective surgical care shows the trajectory for the NHS under the private finance initiative In the NHS, shrinkage in service provision combined with budget constraints could force primary care trusts to redefine entitlement to NHS care and to seek privately funded solutions for those who can afford to pay, leaving a rump service The …
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