Does Andrew Lansley's PFI attack stack up? - BBC News

22 September 2011 Last updated at 11:05 ET By Ben Wright Political correspondent, BBC News

This felt like the Lansley re-launch.

For months, the health secretary has been under assault from Liberal Democrats, Labour and health unions.

His controversial plan to reorganise the NHS in England was paused and then re-written.

As the political storm died down, Mr Lansley went quiet.

But this morning he blazed out of his trench to attack Labour's love of Private Finance Initiatives.

PFI was used to build new hospitals, with the private sector paying for them upfront and Trusts then paying back the cost - with interest - for many years after.

Andrew Lansley said some NHS Trusts have been lumbered with PFI deals "they simply cannot afford" and have been left "on the brink of financial collapse".

'Complexity'

Some 22 Trusts, responsible for 60 hospitals, have told the Department of Health that PFI repayments are to blame for their financial woes and Mr Lansley said this was further evidence of Labour's "enormous debt legacy".

But does his attack stack up?

The Department of Health and the consultants McKinsey have been examining the financial stability of these Trusts for several months and their work is ongoing.

The Treasury has also been keen to try and bring down the cost of PFI repayments and has found a saving of 5% at a hospital in Essex.

But the Department of Health concede that PFI contracts are only one part of the problem these Trusts face.

John Appleby, chief economist at the King's Fund, is not convinced PFI is the sole problem.

He told The Guardian: "When you look at individual hospitals there's a complexity of problems they may have faced over the years: changes in the demographics where they are, changes in medical technology which means they have to change the way they provide services and haven't, through to maybe poor management. To simply blame PFI, which is certainly how it came across to me, is simply misleading as best."

Lord Crisp, the former chief executive of the NHS, told BBC Radio 4's The World at One that PFI payments are currently less that 1% of annual NHS turnover.

Compared with the unprecedented 20% savings the NHS needs to find in the next four years, PFI repayments alone do not explain the pressure the health service is under.

Labour accused Mr Lansley of trying to blame the last government for the problems his policies are causing.

As the NHS enters a new era of austerity, health is where the political punch ups will be bruising.