This report analyses the financing structure of the new Private Finance 2 scheme and finds that it is likely to increase costs to the NHS. Restructuring the balance of debt and risk capital would increase the rate of return to private investors by 15% compared to the original Private Finance Initiative.
The report also notes that private finance is ‘the only game in town’ for the NHS following unprecedented reductions in government capital spending and that a marketised healthcare system introduces perverse incentives for providers to pursue large-scale investments as a means of increasing their claim on the resources in the local health economy.
The return of PFI – will the NHS pay a higher price for new hospitals?
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