Multiple Members of Parliament are urging Chancellor Rachel Reeves to abandon the proposal to bring back private debt deals for the NHS.
Activists confronted MPs outside the Labour Party Conference, insisting that they uphold their 2024 election promise to maintain the NHS as “publicly owned and publicly funded.” Private finance agreements are utilized to keep government debt off the balance sheets to comply with fiscal regulations but result in NHS trusts facing exorbitant interest rates for many years. This move has been likened to purchasing a new home with a payday loan.
The demonstration occurred before Rachel Reeves delivered her keynote address at the conference in Liverpool.
The final decision on whether to utilize a form of private finance scheme to finance numerous new medical centers across England will be made by the Chancellor in her Autumn Budget on November 26.
Cat Hobbs, founder of We Own It, which coordinated the protest, expressed to the Mirror: “It is a complete betrayal of the manifesto and it’s not what people voted Labour in to deliver.
“People voted Labour to protect the NHS and because they trusted them with the NHS. If Rachel Reeves goes ahead with this she will be betraying that trust.”
Public-private partnerships (PPPs) were initially introduced by the Conservatives and expanded by Tony Blair’s Labour government through private finance initiatives (PFI) to construct hospitals without adding to the national debt.
In contrast to government borrowing at low rates, private PFI agreements involve NHS trusts borrowing directly from private consortia at significantly higher interest rates. Shareholders often receive double-digit returns on such projects.
For instance, Barts Health NHS Trust in London is tied to a 43-year PFI contract, under which it is projected to repay over £7 billion for assets and services valued at around £1.1 billion. The Norfolk and Norwich Hospital is expected to pay back 14.7 times the original PFI investment cost. Servicing PFI debts can consume between 10% and 15% of a hospital trust’s budget.
The government is contemplating the use of a PPP variant to meet Rachel Reeves’ self-imposed regulations, including the stipulation that public debt must decrease as a percentage of the economy within five years.
Protesters holding placards confronted MPs with a five-foot tall sign asking: “Are you a Labour MP? Do you stand by Labour’s manifesto pledge that the NHS will ‘always be publicly owned and publicly funded?’”
The protest included a list of all Labour MPs with a space for them to affirm their commitment, and 27 MPs signed up.
Cat Hobbs added: “Currently, NHS trusts are still allocating up to 13% of their income to aged PFI deals agreed upon during Blair’s tenure. In some instances, this surpasses the hospital’s expenditure on medication.
“Most of these outdated PFI contracts have already covered the hospital’s cost, but they continue to pay due to the exorbitant interest rates. Private finance deals are highly inefficient in funding projects, and if Rachel Reeves proceeds, she will be heavily indebting the NHS.
“This is akin to someone who can afford to buy a house choosing to pay for it using a payday loan.”
The NHS 10-year plan commits to “develop a business case for the use of public-private partnerships (PPPs) for neighborhood health centers, with a final decision expected at the autumn budget.”
New PPPs would be more constrained than the large projects of the Blair era but are being considered in “limited circumstances where they could offer value for money.” Scotland and Wales have devised their alternative approaches to PPPs, known as “nonprofit distributing” partnerships and the “mutual investment model,” respectively.
Bell Ribeiro-Addy, Labour MP for Clapham and Brixton Hill, emphasized the importance of safeguarding the NHS, stating, “It’s truly one of the best aspects of our country, and the only way to protect it is to ensure it remains fully publicly funded and free at the point of need. I do not believe we should further engage with PFI. It’s a downward spiral, and I trust that our Labour Party, the founders of the NHS, will shield it from these detrimental private entities.”
Ian Byrne, Labour MP for Liverpool West Darby, shared his