8/30/12

P3 deals are "millstones" says Health Minister

The growing crisis of public private partnership (P3) hospitals in Britain has now forced the health minister to announce that he will be sending in “hit squads” to make savings at twelve hospitals where the P3 contracts have gone “horribly wrong” the conservative Daily Telegraph reports.

This is a follow up from the government's February announcement that seven health care trusts with P3 (or, as the British call them, "PFI") hospitals would get £1.5 billion in emergency funding to help them avoid cutting patient services as a result of their P3 deals.
The Health Minister Simon Burns told the Press Association, "there are these seven which are at the top of the scale, which are having a significant drag on their day-to-day running because of the PFI costs. The trusts have got significant problems as a result of these irresponsible PFI schemes that the last Labour government allowed, and we have said, with those, that if they have a regime in place that ensures that the other financial running of the trust, with regard to the provision of healthcare, is either sound or there are realistic measures to ensure they become sound, then we will be prepared to financially help them, solely with the burden of the PFI repayments, because it is a millstone round their neck."
The government "hit squads" will move into 7 health care trusts that run 12 hospitals. The hospitals provide care for more than 2 million people. South London Healthcare Trust has already been taken over by a government management team as a result of its rotten P3 deal. 
The squads will be made up of top government lawyers and accountants.  They will try to renegotiate contracts.  But the health minister has also said he would not walk away from the contracts as that could leave the health service facing years of litigation, so it is not clear how much they can achieve.  
Last year, the government announced that more than 60 hospitals, run by 20 trusts, were facing financial difficulty because of PFI schemes. The Telegraph notes that "the decision to send in hit squads to the most troubled trusts underlines the growing concerns at the highest levels of government that patient care may soon start to suffer."

The health minister, Simon Burns 
says that the P3 deals show a “cavalier disregard” for taxpayers’ money, noting cases where the P3 deals require hospitals to pay £242 (about $387) for a padlock to be changed or £466 ($746) for a new light fitting. The minister also complained about the complexity of the P3 deals: “The problem is some of these contracts are 2,000 pages long and realistically I suspect very few people have looked through them and been able to identify all the implications and potentials to make sure they are getting a good deal”.
The Conservative government has often blamed the former Labour government for bad P3 deals and is reviewing the use of P3s. But the CEO of one of the largest P3 corporations, Carillion, has told the Construction News he doesn't expect a lot to change.  
The British P3 industry was a model for P3s in Ontario and British companies (such as Carillion) play an important role in the Ontario P3 industry.  Ontario also went through a phony reinvention of P3s when the Liberals replaced the Progressive Conservatives -- little more than the date of public ownership of the facilities and the name changed.

No comments:

Post a Comment