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N&N PFI deal criticised

PUBLISHED: 10:13 02 June 2009 | UPDATED: 14:03 03 July 2010

BOSSES at the Norfolk and Norwich University Hospital say it is “not feasible” to opt out of a controversial private finance scheme.

They were speaking after the PFI deal, which was used to build the Colney hospital, was criticised by economist Chris Edwards, a Senior Fellow at the University of East Anglia (UEA), who said more than £200m could be put towards improving patient care if the hospital came out of the PFI deal.

BOSSES at the Norfolk and Norwich University Hospital say it is “not feasible” to opt out of a controversial private finance scheme.

They were speaking after the PFI deal, which was used to build the Colney hospital, was criticised by economist Chris Edwards, a Senior Fellow at the University of East Anglia (UEA), who said more than £200m could be put towards improving patient care if the hospital came out of the PFI deal.

Yesterday, he presented a 108-page report which outlined reasons why the hospital would be “better off” if it opted out of the deal which is due to cost more than £800m by the end of the contract in 2037.

Private consortium Octagon Healthcare raised the initial money to build the 989-bed hospital and the Norfolk and Norwich University Hospital NHS Trust pays it £37.1m a year out of its annual £250m budget.

Dr Edwards said: “The PFI deal is operating at a public loss and at a private gain. If the PFI were bought out, it would save £217m which could go such a long way into improving patient services. PFI is an appalling waste of money which could be put back into providing more beds and better treatment for patients which is desperately needed.”

Dr Edwards suggested that despite a £300m penalty clause the PFI contract could still be bought out.

He also explained how inflated figures for possible construction overrun costs and the rent of the N&N to the NHS and UK taxpayer was £18m a year - more than it would be if the project had been publicly funded.

But hospital bosses said the issues raised had been “thoroughly scrutinised” and his research “adds nothing new”.

A spokesman said: “The option of buying out the PFI scheme is simply not feasible. Given the sums of money the government is committing to supporting the wider economy and banking sector, it is extremely unlikely that the money is there to pay off any PFI scheme.

“Our view is that we have sufficient acute beds at the N&N but for the future we do need to look carefully at the overall capacity across the whole health and social care system.”

He said the recent pressure on acute NHS services was nationwide rather than a result of PFI.

He added: “The Norfolk and Norwich University Hospital is delivering very high standards of healthcare for the public locally.

“The scheme here allows us to concentrate on what we do best, which is treating patients. Our overall quality of care has been judged by patients as among the very best in the country.

“There is a danger the calculations in this report ignore the fact that much of our spend on PFI would still need to be incurred, for example, on catering, cleaning, maintenance, engineering, portering, laundry and security. Buying out the PFI would not negate the need to spend NHS resources on those important services.”

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