THE SWINDON shambles is the latest episode in a saga which has effectively paralysed any large-scale hospital development since the introduction of PFI in 1994.
Even replacement ambulance radio systems costing £2- £3 million have become impossible to obtain, as the system grinds to a standstill. Computer projects have been halted. There is no easy escape. private partners, To press-gang Kenneth Clarke has NHS Trusts into inflicted drastic cuts in seeking private partHers. Chancellor government capital Kenneth Clarke has funding for the NHS. inflicted drastic cuts in government capital funding for the NHS.
But big companies have been understandably cautious about investing in cash-strapped Trusts.
The companies demanded new legislation which would effectivelv commit any future government to pick up the debts of a Trust which went bankrupt and thus guarantee their profits.
The new law was steamrollered through Parliament - but now city lawyers are worried that it still leaves loopholes which might leave companies vunerable if they invested in floundering Trusts and ministers refused to intervene.
Trusts are specifically debarred from mortgaging their assets, so they can only offer profitable deals to PFI companies by paying hefty annual fees to 'lease back new bulldings To press-gang NHS and buy privately-run Trusts into seeking services, or by handWing over 'surplus' land for development. Derek Smith, Chief Executive of King's Healthcare Trust in London told a recent conference: "PFI makes it almost impossible to do anything unless you have a large slab of land somebody wants to develop."
Big firms are also deterred by the costs of developing PFI bids. With extensive involvement of lawyers, accountants and Dlanners, each deal can cost companies at least £500,000.
One recent example. the proposed sale and lease-back of Coventry's Walsgrave Hospital, involves a contract running to 17,000 pages - just short of the size of Encyclopaedia Britannica.