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Private Finance Initiative

Volume 507: debated on Monday 8 March 2010

To ask the Secretary of State for Health how much funding his Department will have to provide to fund all existing private finance initiative and public-private partnership contracts in each of the next 10 years. (320566)

There are many hundreds of contracts negotiated annually between national health service bodies and private sector suppliers for a full range of services and equipment that involve elements of public-private partnerships (PPPs).

Information is collected centrally for the three major areas of PPP contracts—private finance initiative (PFI) schemes, local improvement finance trusts (LIFT) and independent sector treatment centres (ISTCs). The following table shows the unitary and lease payments for PFI and LIFT schemes respectively for the next 10 financial years in nominal terms (i.e. uprated annually for retail prices index inflation of 2.5 per cent.; these are only approximate profiles as the LIFT payments are collected by calendar year not financial). From the information collected centrally it is not possible to express the ISTC payments on an annualised basis over the same period, but from a calculation of the total mean monthly payments, ISTC contract payments in 2010 will total approximately £469 million.

£ million

PFI payments (by financial year

LIFT lease payments (by calendar year)

2010-11

1,249

206

2011-12

1,306

211

2012-13

1,407

217

2013-14

1,579

222

2014-15

1,619

228

2015-16

1,659

233

2016-17

1,700

236

2017-18

1,743

245

2018-19

1,748

251

2019-20

1,831

257

As total NHS planned resources for 2010-11 are £105.8 billion, PFI payments will represent approximately 1.2 per cent. of the total, LIFT approximately 0.2 per cent. and ISTCs 0.4 per cent. As payments rise with the rate of inflation, as demonstrated by the tables, we expect that NHS PPP/PFI contributions will remain at the level of less than 2 per cent. of the total budget for the life of the contracts. The phase 1 ISTC schemes have reached, or are reaching the end of their contracted periods and are being renegotiated.