The private finance initiative is a 'free lunch' that could destroy the NHS

July 02, 1999

(PFI: perfidious financial idiocy)

The British government should abandon the private finance initiative (PFI) and come up with an alternative that will allow the modernisation of the NHS, says editor Dr Richard Smith in a leader published in this week's BMJ. He reports that the private finance initiative schemes are in fact costing much more than traditional public funding of capital developments and suggests that this extra cost is likely to be covered by an increase in private healthcare.

In areas with (PFI) schemes, both the number of private beds and the proportion of all beds that they represent are increasing. Until now, says the author, the complexity of the PFI issue has left electors bemused. But, he argues, we must wake up to the profound implications of PFI before it is too late.

Dr Smith also raises concerns over the closed nature of the planning process of PFI schemes, whereby private companies are making decisions on, for example, the numbers of beds without adequate accountability. He also argues that there is no evidence to suggest that PFI schemes are effective - in fact all the evidence that exists suggests it is a very bad idea. Finally he speculates that PFI presents "..generous scope for corruption". With the vital "...ingredients (of)... big sums of public money; closed decision making and inadequate accountability....Sooner or later we will have a scandal".

He concludes that the government is currently lacking in sufficient imagination and commitment to think of an alternative and persisting with such schemes in a bid to save face. He calls for the abandonment of the PFI scheme in the NHS and argues that the electorate wants modernisation not destruction.

Dr Richard Smith, Editor, BMJ c/o Jill Shepherd, BMJ Press Office


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