BMA battles to save PFI trust’s jobs
5 December 2012
The BMA is working with a trust facing financial difficulties, to help protect doctors’ jobs and conditions.
An NAO (National Audit Office) report, published last week, criticises the board of the Peterborough and Stamford Hospitals NHS Foundation Trust for failing to recognise the huge and recurrent financial strain of a PFI (private finance initiative) hospital.
The report says a lack of foresight over the true cost of the 2007 scheme to build Peterborough City Hospital has left the trust’s finances in a critical position.
The NAO also criticises the Department of Health for not being sufficiently sceptical in its evaluation of the scheme.
In 2011/12, the in-year deficit was £46m. The trust is predicting an in-year deficit of £54.3m in 2012/13.
Unrealistic plans
Although the NAO says PFI is a key factor in the problems, it also points to unrealistic plans about activity levels, failure to control costs, and increased staffing costs.
The report highlights how staffing levels at the trust have increased significantly in recent years, with the number of medical and dental staff up by 37 per cent between 2007/08 and 2011/12.
BMA east of England regional coordinator Peter Mitchell said: ‘We are working with the trust’s local negotiating committee to ensure members’ jobs and conditions are protected in light of the financial situation.’
NAO head Amyas Morse said: ‘Poor financial management and procurement of an unaffordable PFI scheme have left the trust in a critical financial position.
‘The board developed and enthusiastically supported an unrealistic business case built on overoptimistic financial projections. The regulatory and approval processes did not work in this case, and did not ensure affordability.’
DH funding pledge
The NAO has urged the trust, the DH, commissioners and foundation trust financial regulator Monitor to work together to get the trust back on its feet. The trust has a strategy in place to increase income, and the DH has pledged to continue funding its day-to-day activities.
Peterborough City Hospital opened in December 2010, and cost £411m — financing included.
Monitor raised concerns about the scheme’s affordability with the DH and the trust before it was signed off in 2007. However, these were not addressed fully before the business case was approved. It was not until October 2011 that Monitor used its powers to intervene and place the trust in breach of its terms.
The annual PFI payment is £41.6m, approximately 20 per cent of trust turnover. The DH rule at the time of the scheme’s approval was that PFI payments should not exceed 15 per cent of turnover. It has since lowered the threshold to 12.5 per cent of turnover.