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NHS Hospital Finance

Volume 533: debated on Tuesday 18 October 2011

5. What steps he is taking to reduce the burden on NHS hospitals of (a) PFI repayments and (b) debt. (74851)

A study conducted by the Treasury has identified savings opportunities of up to 5% on annual payments in NHS PFI schemes. The Cabinet’s Efficiency and Reform Group is rolling out a programme of work to secure savings of up to £1.5 billion across the 495 PFI contracts in the public sector in England.

Contrary to the earlier complacent comments of the Opposition spokesman, some national health trusts are paying up to 20% of their revenue to PFI contracts. What steps can we take to ensure that the payments are reduced and that the same terrible financial situation never happens again?

I am grateful to the hon. Lady. I, too, recognise the small number of organisations that are reporting financial challenges. The Department is continuing to work with strategic health authorities to ensure that those organisations have robust plans in place for financial recovery, while ensuring the quality of services for patients.

On the subject of financial pressures on hospitals, does the Minister recall the circular to hospitals from Monitor that was smuggled out on the eve of the royal wedding, which raised the requirement for efficiency cutbacks on hospitals from 4% to 6.5%, which is more than £1 billion in this year alone? Will he admit that the service cutbacks that we are seeing in many hospitals around the country are deeper, as that circular confirms, directly because of the Government’s policies?

No, I do not recognise that, because the figure that the right hon. Gentleman has used is an upper calculation, not an actual figure. I say to him that we are making efficiency savings, and that trusts should be cutting not front-line services but inefficiency, waste and excessive management, and reinvesting every single penny in front-line services.