A group of Members of Parliament (MPs) have urged Chancellor Rachel Reeves to abandon proposals to reintroduce private debt arrangements for the National Health Service (NHS).
At the Labour Party Conference, activists challenged MPs to uphold their 2024 election promise to maintain the NHS as a publicly owned and funded entity. Private finance deals, although helping the government adhere to fiscal regulations by keeping debt off the books, could burden NHS trusts with high-interest obligations for many years, akin to acquiring a new home through a payday loan, as described by campaigners to the Mirror.
The demonstration occurred ahead of Rachel Reeves’ keynote address at the Liverpool conference.
The final decision on whether to utilize a form of private finance scheme for constructing numerous new medical facilities across England will be made by the Chancellor in her Autumn Budget on November 26.
Cat Hobbs, the founder of We Own It, which orchestrated 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), introduced by the Conservatives and expanded during Tony Blair’s tenure through private finance initiatives (PFI), allowed the construction of hospitals without adding to the national debt. However, unlike government borrowing at lower rates, NHS trusts under PFI arrangements borrowed from private groups at significantly higher interest rates, yielding substantial returns for shareholders.
For instance, Barts Health NHS Trust in London is locked into a 43-year PFI contract that will require over £7 billion in repayments for assets valued at £1.1 billion. This pattern is mirrored at the Norfolk and Norwich Hospital, where repayments exceed the original PFI investment by 14.7 times. Servicing PFI debts can consume between 10% and 15% of a hospital trust’s budget.
The government is contemplating using a PPP approach to adhere to Rachel Reeves’ fiscal rules, including the stipulation that public debt must decrease relative to the economy within five years.
Activists holding placards challenged MPs outside the conference with a sign asking if they support Labour’s pledge for the NHS to remain publicly owned and funded. Twenty-seven Labour MPs signed the list reaffirming their commitment to this promise.
Cat Hobbs further stated: “Currently, NHS trusts are still burdened by up to 13% of their income on dated PFI agreements initiated under Blair. In some cases, this surpasses the hospital’s spending on medications. Most of these older PFI agreements have already covered the hospital’s cost but persist due to exorbitant interest rates. Private finance deals are highly inefficient, and if Rachel Reeves proceeds, she will heavily encumber the NHS.”
The NHS 10-year plan outlines the development of a business case for PPPs for neighborhood health centers, with a decision expected during the autumn budget. New PPPs, more limited than previous mega-projects, are being considered only where they offer value for