Private hospital schemes like Ontario’s P3s lead to massive debt problems in the UK

It might be a good idea to get the next Premier a subscription to the UK Guardian.

Ontario has led the country in the number of public-private partnership infrastructure projects, racking up billions in long-term obligations to private companies for everything from hospitals to court houses.

Britain has been exporting this nonsense to the rest of the globe for some time now, making it a cottage industry for consultants to travel abroad and encourage other countries to similarly emulate their no-money-down miracle.

Did the UK government really believe this was not going to come back and haunt them?

The UK Guardian has consistently reported on the endless problems such schemes – called Private Finance Initiatives for PFIs in the UK — have generated, particularly in the health care sector.

The latest is a series of recommendations by a special administrator sent to sort out the mess that is the South London Healthcare NHS Trust (SLHT).

Heavily indebted, the special administrator noted, “its challenges, exacerbated by the high cost of hospital building developments under the private finance initiative (PFI), are so great that the trust is the NHS’s ‘biggest financial’ problem.”

A trust operating three London hospitals, SLHT was losing about $2.06 million (Cdn) a week. Because PFI costs are fixed, the hospitals have to find nearly $119 million (Cdn) in savings over the next three years from so-called “efficiencies.”

The PFI deals at two of the hospitals extend into the 2030s, obliging the hospitals to still pay more than $900 million (Cdn) to the consortiums before they fully return to the public realm.

In November the UK National Audit Office issued a scathing report on the Peterborough and Stamford NHS Trust after the city hospital went ahead with a $650 million (Cdn) PFI scheme that left it totally unable to balance its books.

According to the Guardian, the cost of servicing the PFI deal was a key reason for the trust running up a deficit of about $72 million (Cdn) in 2011-12.

Our union colleagues at Unison told the newspaper that by the time the Trust has paid off its 33-year contract in 2043, it will have cost taxpayers $3.1 billion (Cdn).

Here in Niagara the new 399-bed $759 million St. Catharines P3 hospital is about to open in late March. Our version of the NHS – the Niagara Health System – has also been notorious for running up large operating debts and stirring controversy within the community. That controversy includes the location of the new hospital complex and closure of two emergency departments in Port Colborne and Fort Erie. In 2011 Kevin Smith was appointed supervisor at the NHS after more than 30 people died during an outbreak of C-difficile within the hospital system.

While there is much celebrating of the new facility, we can only wonder if our NHS will be more like that other NHS in the problems arising from our own version of the private finance initiative scheme.

As well Kingston Ontario is presently looking to replace its aging mental health facilities under a similarly costly scheme. Members of the local health coalition are presently organizing a community plebiscite on the issue for later this spring.