P.F.I. - Profiting From Infirmaries

This report looks at the significant profits made by PFI companies from NHS contracts over the last 6 years.

Analysis of accounting data from the Treasury and Companies House for the period 2010 to 2015 finds:

• Over the past 6 years, companies which run PFI contracts to build and run NHS hospitals and other facilities have made pre-tax profits of £831m - money which has thereby not been available for patient care over this period.

• If the NHS had not been paying profits on PFI schemes, deficits in NHS hospitals would have been reduced by a quarter over this 6 year period.

• Over the next 5 years, almost £1bn of taxpayer funds (£973m) will go to PFI companies in the form of pre-tax profits - equivalent to a quarter (22%) of the additional amount of money (£4.5bn) that the government has promised the NHS over this period.

• A number of PFI schemes are generating particularly high pre-tax profits for their operators. The company which holds the contract for the hospital at University College London has made pre-tax profits of £190m over the past 11 years out. This is out of £527m paid to the company by the NHS. The total value of the hospital is £292m.

• Just 8 companies own or have equity stakes in 92% of all the companies holding PFI contracts with the NHS - meaning that there is very little competition between the companies bidding to build and run NHS PFI hospitals.

The report makes a number of recommendations to curtail excess profits, including:

• Using public sector loans to buy-out PFI contracts.

• Taxing PFI companies to recoup some of the profits which have been made.

• Capping the amount of profit which can be made by a private company which has an
  exclusive public-sector contract with the NHS.

• Sharing out the profits made from sales of equity stakes in PFI contracts.

• Mandating greater transparency of equity sales to prevent the unnoticed consolidation of market power by a small number of investors.

• Re-negotiating contracts with the private companies to reduce the amounts the NHS has to pay.