Unfortunately, this isn't the answer to all our PFI woes
Outlook This week's exit by Northumberland County Council from its local health trust's onerous hospital PFI contract with Lend Lease saved taxpayers millions, but can it be replicated?
To recap, Northumberland is borrowing more than £100m from the Treasury and lending the money to its local NHS trust to buy out of the remaining 19 years of a service contract. The deal will save it £3.5m a year.
Many of the early PFIs were financially disastrous – proved by these massive savings. So it seems logical that every effort should be made by other trusts to buy out their PFIs.
Steve Mason, Northumberland's lead executive director, tells me several other councils have asked him for advice. Unfortunately, he's not too optimistic that his council's trick will work elsewhere.
First, the NHS trust has to be good for the money: no council should be lending to an unstable hospital which could end up struggling to make the repayments. Second, a loan is less likely to work in a big city-centre hospital, where the catchment area might be spread across several different councils. Finally, the council and NHS trust must have a strong working relationship – apparently not always the case.
These three hurdles seem to weed out many potential PFI buyouts. But another issue, as Balfour Beatty's hugely lucrative sale of PFI school and hospital contracts showed last week, is that local authorities would face stiff competition from overseas infrastructure funds bidding to buy contracts.
Sadly, Tony Blair and Gordon Brown's legacy of corporate profiteering from PFI has decades to run yet.
- 1 I'm A Celebrity 2014: Jungle security stepped up after murder and 'suspicious death' near to camp
- 2 To help fuel their propaganda machine against the poor, our government has now decided to redefine the word 'welfare'
- 3 Jeremy Hunt: 'I took my children to A&E because I didn't want to wait for GP appointment'
- 4 Girl, 7, gets Tesco to remove 'stupid' sign suggesting superheroes are 'for boys'
- 5 This letter from a reader explains why women can’t play football
Sarah Vine criticises lesbian mother Jack Monroe: 'If she was unsure about her sexuality, she should have taken greater precautions'
Black Friday 2014: Opening times for Asda, John Lewis, PC World, GAME and Argos
Three-year-old boy accidentally shoots dead his mother in Tulsa, Oklahoma, as she changes her younger daughter's nappy
Michael Brown shooting: Driver smashes into crowd as protests erupt across the US during a second night of unrest
Jeremy Hunt: 'I took my children to A&E because I didn't want to wait for GP appointment'
Rochester by-election: Ukip gains second MP as Tory defector Mark Reckless holds seat
'Beast of Bolsover' Dennis Skinner takes Ukip MP Mark Reckless to task moments after he is sworn in
Ukip says babies born to immigrants in the UK should be classed as migrants – which would include Nigel Farage’s own children
The young are the new poor: Sharp increase in number of under-25s living in poverty, while over-65s are better off than ever
Tamir Rice: 12-year-old boy playing with fake gun dies after being shot by Ohio police
Exclusive: UK approved £7m Israeli arms sales in six months before Gaza conflict
iJobs Money & Business
£16000 - £18000 per annum: Langley James : IT Support; Helpdesk, VMware; Manch...
£35000 - £450000 per annum + £3k car, £70k ote: h2 Recruit Ltd: Do you want to...
£Attractive Package: Citifocus Ltd: Prestigious financial institution seeks to...
£Negotiable: Citifocus Ltd: Experienced operational risk professional with ban...