NAO report examines performance and value

Entitled The performance and management of hospital PFI contracts, the report concludes that some NHS Trusts are devoting insufficient resources to managing their contracts, and, although many will be expected to make significant efficiency savings over the next few years, the fact that they typically pay index-linked sums for services, and the “complex” nature of many existing PFI contracts, will make it difficult to achieve these without cutting back on key services.

The first English PFI hospital contracts were signed in the mid-late 1970s, and, according to the NAO, there are currently over 70 operational PFI hospitals in England, costing around £900 million a year, and with a capital value of over £6 billion. The Department of Health (DH) is responsible for approving any new PFI contracts with a capital value of over £35 m, or those considered “high risk”, and also supports Trusts in negotiating and managing the contracts. The DH currently supports 76 such operational PFI contracts in England, although its accountability depends on the type of Trust managing the contract, as follows:

• Thirty-nine per cent of the contracts are managed by Foundation Trusts, which provide NHS services but are independent of the DH. The Department cannot require the FTs to provide information, or direct them to take specific action. Each Foundation Trust CEO is directly accountable to Parliament as an Accounting Officer.
• Forty-nine per cent are managed by NHS Trusts; the DH says its goal is that all obtain Foundation status by the end of 2013-2014.
• Twelve per cent of the contracts are managed by Primary Care Trusts, some of which operate hospitals as part of their provider function. PCTs are accountable to the Department of Health via Strategic Health Authorities.