The reintroduction of private debt deals for the NHS has sparked a backlash from numerous Members of Parliament, urging Chancellor Rachel Reeves to reconsider the plans.
During the Labour Party Conference, activists challenged MPs to uphold the party’s 2024 election manifesto commitment to maintain the NHS as publicly owned and funded. Critics argue that private finance arrangements, while helpful in managing government debt, burden NHS trusts with exorbitant interest payments over long periods. This move has been likened to purchasing a new house with a high-interest payday loan.
Protestors voiced their concerns just before Chancellor Rachel Reeves delivered her keynote address at the Liverpool conference.
A final decision on the utilization of private finance schemes to finance new medical facilities across England will be made by the Chancellor in her Autumn Budget on November 26.
Cat Hobbs, the founder of We Own It, which orchestrated the protest, expressed disappointment, stating that the proposed action contradicts the Labour manifesto and erodes public trust in the party’s NHS commitments.
The use of public-private partnerships (PPPs) in the form of private finance initiatives (PFI) to construct hospitals without increasing national debt was expanded during Tony Blair’s Labour government, following the Conservatives’ initial introduction. Unlike government borrowing at low rates, NHS trusts under PFI agreements borrow from private consortiums at significantly higher interest rates, resulting in substantial financial burdens. Some trusts end up paying back multiple times the original investment cost due to high-interest rates.
The government is contemplating a PPP variation to help meet fiscal rules set by Rachel Reeves, including the requirement that public debt decreases relative to the economy over five years.
Activists carrying placards challenged Labour MPs to reaffirm their commitment to the NHS being publicly owned and funded, with 27 MPs signing a pledge in support.
Highlighting the financial strain caused by existing PFI deals, Cat Hobbs emphasized the inefficiency of private finance arrangements and warned against burdening the NHS further with such schemes.
The NHS’s 10-year plan includes exploring PPPs for neighborhood health centers, with Scotland and Wales adopting their own partnership models.
Labor MPs Bell Ribeiro-Addy and Ian Byrne criticized the potential reintroduction of PFI, citing its negative impact on NHS finances and urging the Labour Party to safeguard the health service from private interests.
The proposal to use PPPs to fund new neighborhood health centers aims to enhance community-based healthcare, ultimately reducing hospital pressures and offering a variety of healthcare services closer to people’s homes.