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Leak reveals Alan Johnson's PFI concerns

Health secretary Alan Johnson's concerns about the NHS in the recession have been leaked in an email from the chair of NHS South East Coast.

The notes, based on a meeting of strategic health authority chairs with Alan Johnson, raise concerns about future capital funding and use of the private finance initiative.

The email written by Graham Eccles, leaked to and released by the Conservatives, said: "Capital expenditure for 2009-10 is likely to be slightly enhanced to what we have been used to, but is specifically for schemes that can be implemented quickly within year. Expect a capital desert in 2010-11.

"The bad news is around capital schemes that would have been PFIs. PFIs have always been the NHS's 'Plan A' for building new hospitals, especially as they used to be off-balance sheet.

"There was never a 'Plan B'. Now none of the banks have any money or [are] likely to have any for a few years, the absence of a 'Plan B' is going to cause a real problem in taking new hospitals to conclusion.

"I don't have any answers, but I do know that AJ has asked [NHS chief executive] David Nicholson to go away and think very hard about what happens next."

Really tight

On the subject of revenue funds, Mr Eccles said: "For 2009-10, for reasons you can work out for yourself, the situation won't be too dire.

"However, in AJ's words, '2010-11 and forward is going to get really tight'. Expect the worse and plan for it during the coming year, you can only then be pleasantly surprised if things turn out to be better than expected."

The Conservatives said government capital spending decisions had "contributed to the absence of a 'Plan B'".

Consequences

Shadow health secretary Andrew Lansley said: "Gordon Brown's economic mismanagement is going to have disastrous consequences for NHS patients.

"The credit crunch means that many new hospitals - meant to be built through PFI - won't be able to raise the necessary cash from the private sector.

"Even worse, Gordon Brown's cuts to the funds for new NHS buildings mean that there is no extra money if local health bodies are unable to raise funds from PFI - there is no 'plan B'.

"Gordon Brown's plan to spend his way out of recession by building new hospitals now looks as hollow as his claim to have 'saved the world' from economic disaster."

Read more

NHS managers doubt PFI schemes can be brought forward quickly enough to benefit from Treasury's "fiscal stimulus"

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