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PFI funding for NHS hospitals at risk in credit crunch, says government memo

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The next wave of NHS hospitals funded by the private finance initiative (PFI) could be put at risk because of the credit crunch, according to a leaked government memo.

According to the memo, which has been published by the Conservative Party, (PFI) funding is likely to dry up because the ongoing credit crunch is preventing banks lending money.

The memo was from the desk of Graham Eccles, chair of the South East Coast Strategic Health Authority and documented a meeting between health secretary Alan Johnson, government officials and other regional NHS health chiefs earlier this month.

Mr Eccles said: ‘The bad news is around capital schemes that would have been PFI's. PFI's have always been the NHS's "Plan A" for building new hospitals, especially as they used to be off-balance sheet. There was never a "Plan B".

‘Now none of the banks have any money or a likely to have any for a few years, the absence of a "Plan B" is going to cause a real problem in taking new hospitals to conclusion.’

The memo also warns that government funding for the NHS is going to be ‘very tight’ from 2010 because of the credit crunch.

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Readers' comments (1)

  • I don't believe that it is correct to state that PFI has 'always' been the plan A of the NHS but certainly that of a so called Labour government that is obsessed with the private sector and the backdoor privatisation of the health service. The NHS was Labour's baby and yet it is the same party that is slowly killing it's own child. Within my own Trust two new hospitals are being constructed under the PFI scheme, a venture that is being financed by the Royal Bank of Scotland, a bank that we the public are now the majority shareholders in. The taxpayer therefore is now financing a public building that will be owned by a privae company the mortgage of which will be paid for again by the taxpayer. Absolute madness! No to PFI and No to the privatisation of ALL services within the NHS.!!!

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