The must-read stories and debate in health policy and leadership.
- Today’s new requirement: NHSI to require business cases for subsidiary companies
- Today’s special measures release: Trust exits financial special measures as deficit reduces
The steep interest charges that come with private finance initiative deals have long raised concerns in the NHS, but less is known about the inflation charges that many providers have to fork out.
For the first time, the RPI linked charges have been set out in detail by the Centre for Health and the Public Interest think tank, which has highlighted the “crippling” costs facing many trusts over the next decade.
For some providers, including Norfolk and Norwich University Hospitals Foundation Trust and Barts Health Trust, the inflation charges are actually larger than the interest element of their unitary payment.
Vivek Kotecha, a former manager at NHS Improvement who authored the report for the CHPI, told HSJ: “Linking their annual PFI repayments to rising inflation is crippling for trusts as their income does not rise by as much as RPI inflation.
“For PFI companies these inflation rises represent a great windfall: firstly, their income rises with RPI yearly, whilst the costs of providing services only rise with the far lower CPI measure of inflation, and secondly their loan repayments do not rise, but instead fall, with inflation.”
The think tank has outlined various options the government could take to ease the burden on trusts which are struggling with their PFI deals, and outlined the pros and cons of each.
With shadow chancellor John McDonnell proposing a large scale nationalisation of the contracts, the report could prove timely.
Filling the gaps
The global nursing shortage is one of the biggest concerns for NHS leaders, with frequent rota gaps presenting real challenges for patient care.
It was perhaps then inevitable that trusts would start stuffing the gaps with healthcare assistants instead.
The East of England was found to have the highest proportion of HCA staff in the country, with almost one in three staff in the region working as an assistant. It was found that the number of nursing vacancies rose by 46 per cent – which represented the biggest rise in any region.
HCA numbers in London also grew significantly. For example, in North Central and East London, HCAs employed by trusts increased by 18 per cent.
The danger here is that there is widespread evidence that substitution of registered degree nurses with less well educated or trained care staff does lead to increases in patient harm and mortality. This has been known for some time.