Politicians' foolish incompetence

Following the King's Fund Report and subsequent Symposium on `Hospital Design under PFI' last year (A Patently Futile Interlude?, HD Sept '97, p5), demonstrating the failure of PFI to achieve any of its stated objectives, we now have a devastating report on the financial and operational mess it has created, writes Peter Scher.

The report, by Dr Allyson Pollock and Declan Gaffney of the Department of Public Health Studies at St George's Hospital Medical School is a carefully researched, very clear and well presented account of the nature and development of the private finance initiative. It gives chapter and verse from official sources that verify its deeply depressing conclusions.

In summary there are four findings: firstly, the PFI procurement route places greater demands on public revenue than public sector procurement; secondly, the extra costs were enhanced through subsidy, and affordability criteria have become irrelevant; thirdly the economic appraisal of PFI schemes is based on inappropriate measures; and finally, the two functions of cost control and of ensuring that PFI schemes cost no more than they would if procured through the public sector have not been fulfilled.

The official figures upon which the study is based make the conclusions incontrovertible. Over the five years since PFI started the contradictions, inconsistencies and sheer effrontery of ministers, civil servants and private negotiators have been quite shocking. But even more serious is the damage they have inflicted on the health service, the NHS estate and the responsible administration of a service that has been the envy of the world.

The fanatical Thatcherite distaste for all public services and fervent allegiance to the profitdriven private sector initiated the PFI although it was self-evidently unsuitable for the rational development of our health facilities. As for the new government's flabbergasting commitment to PFI, one can only ask: what new government? As one MP has suggested in the House, the old government is still in power though not in office.

The short- and long termeffects of the PFI debacle on healthcare building development can be readily adduced from the Pollock and Gaffney Report but most designers can only do their best in meeting clients' demands, so how does all this affect us? Well, we can only hope that some of the massive increases in the capital costs of PFI schemes (taken from NHS revenue funding, from asset stripping and from the felicitously-named "smoothing mechanism") will be for properlyearned and timely-paid design fees. In professional circles horror stories abound of architects developing complex and detailed designs for bidders `at risk' or even for nothing.

But prospects for the future of the NHS estate seem bleak. No-one anticipates a brave new world any longer and it is inconceivable that politicians and their civil servants will concede that the PFI is far worse than previous procurement systems for the NHS. From a `patently futile interlude' this `perverse fusion of ideas' has now delivered a `pointlessly ferocious insult' to the NHS. Will this chaotic service ever again try to allocate capital spending rationally?

Copyright Wilmington Publishing Ltd. Feb 1998
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