Many Members of Parliament are urging Chancellor Rachel Reeves to abandon the proposal to bring back private debt deals for the NHS. Activists engaged with MPs outside the Labour Party Conference, insisting that the NHS should remain “publicly owned and publicly funded,” as promised in the 2024 election manifesto. Private finance deals, though beneficial for government debt management, can burden NHS trusts with exorbitant interest rates for years to come, akin to purchasing a new house with a payday loan.
The protest occurred just before Rachel Reeves delivered her keynote speech at the conference in Liverpool. The final decision on whether to utilize a form of private finance scheme for funding numerous new medical centers across England will be made by the Chancellor in her Autumn Budget on November 26.
Cat Hobbs, the founder of We Own It, the organizer of the protest, expressed concerns to the Mirror, stating that proceeding with the plan would go against the manifesto and the trust people placed in Labour. Hobbs emphasized that Labour was voted in to safeguard the NHS and any deviation from this commitment would be a breach of trust.
Public-private partnerships (PPPs), originally introduced by the Conservatives and expanded under Tony Blair’s Labour government through private finance initiatives (PFI), have led to NHS trusts borrowing at significantly higher interest rates from private consortiums compared to government borrowing rates. This results in substantial repayments, with some trusts spending a considerable portion of their funding on servicing PFI debts.
For instance, Barts Health NHS Trust in London is locked into a 43-year PFI contract, expecting to repay over £7 billion for assets valued at £1.1 billion. The Norfolk and Norwich Hospital faces repaying 14.7 times the original PFI investment. Such debt servicing obligations can consume a significant portion of a hospital trust’s budget.
The government is contemplating the use of PPPs to align with Rachel Reeves’ fiscal rules, including the stipulation that public debt must decrease as a percentage of the economy within five years. Activists displayed a large board questioning Labour MPs’ commitment to the NHS manifesto pledge, and 27 MPs signed to affirm their support.
Highlighting the impact of existing PFI deals, Cat Hobbs pointed out that NHS trusts are still burdened by old PFI agreements, diverting funds from essential healthcare services. Hobbs criticized private finance deals as inefficient and cautioned against further leveraging the NHS through such schemes.
The NHS 10-year plan includes exploring the use of PPPs for neighborhood health centers, with a decision expected during the autumn budget. While new PPPs are envisaged to be more constrained than past mega-projects, Scotland and Wales have adopted their own models for such partnerships.
Several Labour MPs, including Bell Ribeiro-Addy and Ian Byrne, have voiced strong opposition to PFI, emphasizing the importance of keeping the NHS publicly funded and free at the point of need. Darren Jones, the chief secretary to the Treasury, believes PPPs could expedite healthcare infrastructure development, particularly for the planned neighborhood health centers.
The neighborhood health centers are integral to the Government’s Ten Year Health Plan, aiming to provide localized care, alleviate hospital burdens, and offer a wide range of healthcare services to the community.