Letters

I read with interest your news focus on the private finance initiative project in Worcester in HSJ ('Watch this space?', pages 10-11, 1 June) and would like to respond to all those health analysts who seemingly condemn PFI out of hand. PFI is a success in the NHS and will continue to be a major plank in the government's modernisation programme.

No-one could argue that PFI has been unsuccessful. Eighteen major PFI hospitals are currently being built, and Carlisle's new hospital opened its doors to patients last month. In total, 34 major PFI schemes worth over£3.6bn have been signed since May 1997, making this the biggest hospital-building programme the NHS has ever seen.

But is PFI a better way of getting a new hospital built than publicly funded procurement? The uncertainty about how much public capital would be available each year meant that, in the past, projects often had to be phased in over many years or scaled down. Even when projects did go ahead, they were often delayed and ran over budget.

The project at Guy's Hospital cost£155m more and took three years longer than planned. Compare that with Carlisle, which has been handed over several months early with liability for any cost increases absorbed by the PFI partner.

PFI consortia also take responsibility for design quality over the whole lifetime of the contract so that defects will be put right by the private sector whether that is in year one or year 25.Again, compare this with publicly funded procurement; the NHS is having to pay over£20m to rectify such faults at St Mary's Hospital on the Isle of Wight .

The usual argument is that the government borrows more cheaply than the private sector. Of course this is true, but it is not a fair comparison. PFI is not just about comparing the costs of construction but the whole package of benefits to be reaped through the synergies of design, construction and operation over the full 25 years of the contract.

In any case, the difference in borrowing rates is only 1 or 2 per cent and that within a small proportion of the total contract value - just over one-fifth on average.

Critics go on to argue that the private sector profits unfairly from PFI. They seem to forget it is often the very same contractors who would profit out of a publicly funded scheme.

PFI's opponents often say it cuts bed numbers. The number of beds is determined by commissioners as the best and most affordable way to deliver their local healthcare strategy well before any decision is made whether to fund the hospital through public or private funding.

But it is not just my word that PFI delivers. The National Audit Office examined the Dartford and Gravesham scheme. It found the scheme was likely to produce estimated savings of£5.1m compared to the publicly funded option.

So the critics have misunderstood or deliberately distorted the facts.

Why not let the facts speak for themselves?

Colin Reeves Director of finance and performance NHS Executive