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30
Nov

Spending watchdog blasts ‘reckless’ PFI deal


A report from the National Audit Office has blasted a hospital for reckless decisions that led to it signing an unaffordable PFI contract that has left it with the largest deficit in the NHS.

A report from the National Audit Office has blasted a hospital for reckless decisions that led to it signing an unaffordable PFI contract that has left it with the largest deficit in the NHS.

The government spending watchdog says the board of the NHS Trust for Peterborough city hospital went ahead with a £411m PFI scheme that has placed “a stranglehold on Peterborough and Stamford NHS trust's financial future, rendering it totally incapable of balancing its books".

According to reports, the trust failed to recognise that the PFI deal, which saw services at three smaller hospitals merged onto one large, new-build facility, would involve huge costs for many years to come that it could not afford, the NAO says.

A report in the The Guardian says the costs of servicing the PFI deal were a key reason for the Trust running up a deficit of £45.8m in 2011-12, which, at 22% of its turnover, was the worst recorded in the NHS. Its own projections.

The Trust is set to record a deficit of more than £50m in the current financial year and will need a Department of Health (DoH) bailout fund to help keep it afloat.

"The financial situation of the Peterborough city hospital is extremely worrying", a spokeswoman for the British Medical Association told The Guardian. "We have long argued that PFI represents poor value for money for the NHS and that the inflexibility of repayment regimes under PFI can create problems."

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