Jeremy Corbyn has called for the Labour party in opposition to campaign for a fund to be set up to bail out NHS trusts from PFI schemes that were forced upon them under the New Labour government.
This is in line with the current draft of the 2015 NHS Reinstatement Bill, that Jeremy Corbyn has co-sponsored as a Private Members Bill along with Caroline Lucas MP and other MPs.
The Bill is due to receive its second reading on 11 March 2016 and it’s vital that all opposition MPs support it – as well as Conservative MPs who respect the wishes of the 77% of Tory supporters who want a publicly-owned and run NHS.
However, not all supporters of the NHS Reinstatement Bill are happy with the section that calls for removal of PFI debts from hospitals and centralisation of the debts in the Treasury, and discussions are underway about proposed amendments to this bit of the Bill.
This is because removing PFI debts from hospitals (which is also the aim of Corbyn’s proposal of fund to buy out the hospital Trusts’ PFI debts) doesn’t do anything to tackle the inappropriate PFI debts, and it helps the PFI lenders launder debts which were arrived at in inappropriate situations – as work by Professor Allyson Pollock documents.
To accomplish the goals of protecting NHS hospital sites from being sold, and to address the emergency need to keep the PFI-affected hospitals in running order and adequately funded to take care of the patients who need them and formerly had better access to them:
1. Repeal of the Health Act 2009’s Unsustainable Provider Regime.
2. Creation of a requirement that the Treasury should pay each year to each PFI-affected hospital the amount of its unitary charge and any other PFI-related costs.
3. A ban on the removal of PFI debts from the hospitals. PFI removal will put them at immediate risk of sale, since they currently make the PFI-built hospitals unsaleable, and the government is clearly committed to the QIPP plan requirement to sell off the PFI sites as working hospitals asap.
4. To give guidance on the way forward in the bill, a declarative statement stating how to deal with the debts could be included. The debts can be dealt with just fine under existing law, there is no need for anything new legally in this area.
5. Repeal section 43 of the Freedom Of Information Act 2000: that is, the Commercial Confidentiality exemption.
6. Reinstate the whole of the Ryrie rules which used to ban private financing which was more expensive than public financing. This is a supportive rather than a central measure.
REASONED ARGUMENT (numbering follows that above)
1. Without the Health Act 2009’s “Unsustainable Provider Regime”, hospital sales triggered by removing the PFI debts would be illegal. Repealing it would be a simple idea to block imminent hospital privatisation and give more time to work on investigating and prosecuting PFI frauds where possible, and in getting the other contracts renegotiated to fair value, or voided as concluded under circumstances where misrepresentation was relied upon for the rest.
In fact the whole of the Health Act 2009 should be repealed, along with all other marketising/privatising legislation affecting the NHS, as part of the complete renationalisation needed to protect against the TTIP threat. That’s basically “Back to Bevan”, as that was the last time that the NHS was in a legal form that would meet the trade exemption test for public services under TTIP.
2. The requirement that the Treasury pay the unitary charge and any other PFI-related costs each year to each PFI hospital is so that the hospitals should not be penalised further financially by leaving them to find the money to pay usurious PFI unitary charges that they should never have been subjected to in the first place. This would relieve the unacceptable financial pressure on hospitals in the short-term without putting them at risk of privatisation under Health Act 2009. That would seem to gain the benefit of what the Bill proposes, without the risk of triggering hospital sales.
3. The Bill should not mention moving the PFI debts, because doing this is the last-but-one stage of hospital privatisation (staff retrenchment is always kept for the last stage before sale because it is unpopular), as well as helping the PFI lenders launder debts which were arrived at in inappropriate situations.
Concerning government commitment to selling hospitals as soon as they can, the Lewisham Hospital court case win explicitly blocked the government’s ability to sell NHS hospitals as they wished. This decision was overturned through new law put into the Care Bill 2014, which now enables Hunt to sell any NHS Hospital he wishes using this and Health Act 2009’s Unsustainable Provider Regime. So Hunt’s keen to get them sold: the hold-up in the hospital sales schedule at present is the need to get the PFI debts off the hospitals first, as no purchaser wants one with a PFI in place.
Not only do the new owners of public assets never want purchases with previous long-term debts still in place, the terms of a PFI are such that with one of these contracts in place, the managers are forced to pay inflated charges for core services, and worse, they cannot even control hospital cleanliness adequately because cleaning’s outsourced, often to low-grade providers. The sale of every PFI-built hospital to the private sector has been planned all along, one can see it even in the architectural blueprints. The reason the sales aren’t happening as yet is that the buyers require the PFI debts to be removed first. Accommodating this wish will lead to a round of mass firings from the NHS using Health and Social Care Act 2012 ss300-301 and Sch 23, followed swiftly by a wave of hospital sales to foreign operators.
4. We can deal with the PFI debts by an overall policy of in situ renegotiation to fair value where no more stringent action seems feasible, with a more aggressive approach on a case by case basis, according to local circumstances, on grounds of misrepresentation or fraud/its related offences. Where outright fraud (or any of the linked offences) is provable, this approach should be used: initial advice is that a number of different criminal statutes would appear to apply to those taking different roles in the PFI implementation, where the evidence appears pretty solid, which in some cases we can already see it is. All of these options would recoup public funds for our hospitals. This would be a process achieved using various existing laws, and not needing new legislation.
5. To facilitate renegotiation, prosecution etc. needs full access to the PFI deal documentation. This is currently unavailable because of the Freedom Of Information Act 2000’s s43 Commercial Confidentiality exemption. This allows commercial partners to insist that information on public spending is withheld from the public, in blatant contravention of the spirit of FOI legislation: the one area that requires the closest scrutiny is denied it at the preference of the profit-making party.
6. The Ryrie Rules required as a condition for private financing to be legal, that it must be provably cheaper than the cheapest public option, sovereign borrowing. This can never be achieved in practice because interest rates on major financing for private borrowers are always higher than sovereign borrowing rates, and then profit must be found from somewhere too. So in 1989 John Major as Chief Treasury Secretary abolished the Ryrie Rules and they were replaced by PFI in 1992