PFI and Community Services – The Elephant and the Tsunami
Sally Gainsbury’s article “Wistful thinking on PFI” in the Health Service Journal dated 9th June (reproduced below) does a great job of linking two huge waves hitting the NHS and points out there may be a tsunami behind – the problems with the Private Finance Initiative and the threat to community health services through vertical integration with acute trusts.
I’ve posted before about how PFI legacy debt is “The elephant in the room” – Sally has joined the dots and pointed out why fears about the unaffordability of hospital PFI schemes may lead to finance directors of vertically integrated acute and community trusts looking at their community health service divisions and deciding that they could offset some of their PFI costs by moving them into under-utilised PFI hospital accommodation.
Just like in the 1980s and early 90s, when combined acute and community units used to raid community services to make cost savings, our decade’s version of this threat to the viability of community services is driven by the need to support hugely expensive PFI schemes that have effectively frozen configurations of health care, at least in building terms.
Hopefully the Co-operation and Competition Panel can take this into account when considering applications to merge acute and community service providers and demand guarantees that the integrity of community services remain protected – specifically that they are not artificially concentrated on hospital sites.
Sally Gainsbury: wistful thinking on PFI – Health Service Journal 9th June 2011
Ask an NHS finance director what they hope will come out of the McKinsey review of 22 trusts with tricky private finance initiatives and they talk wistfully about a revised market forces factor – the calculation that determines any top-up paid for delivering services in a particular area.
In theory, a market forces factor would recognise the added costs of new, privately funded capital by supplementing the tariff prices paid to certain trusts.
More likely, a new centrally funded facility, effectively offering a subsidy to trusts with expensive PFIs, would need to be established to avoid minsters being embarrassed by an ensuing competition on price driven by differing tariffs.
But the real bickering would come over where the line should be drawn. The 22 currently listed are self-defined; what about the other 100 or so trusts with PFIs?
Others are looking to more pragmatic solutions. Most PFI contracts contain a clause which allows the costs for “soft facilities management” services – cleaning, portering – to be benchmarked against alternative providers. The irony is that the staff doing those jobs are often retained employees: if “efficiencies” were required their redundancy cheque would need to be signed by the NHS.
The hopeful point to Cabinet Office minister Francis Maude’s withdrawal in December of the two tier workforce code as a sign the government could take its industrial battering ram to regulations preserving the terms and conditions of outsourced workers.
The fallback option remains the South London scenario: shutting other facilities – be they acute wards, community clinics or GP centres – and stuffing them into the PFI building until it sweats.
While hospital closures attract most attention, the area to watch could be community services. The larger portion have already been swallowed up by acutes, so how long before we start hearing of the integrated benefits of hauling community service patients into PFI buildings?