Dozens of Members of Parliament are urging Chancellor Rachel Reeves to abandon proposals to bring back private debt deals for the NHS. Activists confronted MPs outside the Labour Party Conference, demanding adherence to the 2024 election manifesto promise of maintaining the NHS as publicly owned and funded. Private finance deals are criticized for shifting government debt off the balance sheets but burdening NHS trusts with high long-term interest payments. This move has been likened to purchasing a new home with a payday loan.
The protest occurred just before Rachel Reeves delivered her keynote speech at the conference in Liverpool. The final decision on whether to employ a form of private finance scheme to finance numerous new medical centers across England will be made by the Chancellor in the Autumn Budget on November 26.
Cat Hobbs, the founder of We Own It, which organized the protest, expressed disappointment, stating that it would be a breach of the manifesto and the trust placed in Labour by voters. Public-private partnerships (PPPs) were initially introduced by the Conservatives and expanded by Tony Blair’s Labour government through private finance initiatives (PFI) to construct hospitals without increasing the national debt.
Unlike government borrowing at low rates, NHS trusts under PFI arrangements borrow from private consortiums at significantly higher interest rates, resulting in substantial financial burdens. For instance, Barts Health NHS Trust in London is locked into a 43-year PFI contract, expected to repay over £7 billion for assets worth £1.1 billion. The Norfolk and Norwich Hospital will repay 14.7 times the original PFI investment amount. The servicing of PFI debts can consume 10% to 15% of a hospital trust’s budget.
The government is contemplating using a form of PPP to meet Rachel Reeves’ fiscal rules, including the reduction of public debt as a percentage of the economy within five years. Activists displayed placards questioning Labour MPs’ commitment to the NHS manifesto pledge, with 27 MPs signing to reaffirm their support.
Bell Ribeiro-Addy, Labour MP for Clapham and Brixton Hill, emphasized the importance of protecting the NHS as a publicly funded institution. Ian Byrne, Labour MP for Liverpool West Darby, warned against repeating past mistakes with PFI, citing its negative impact on NHS funding.
Darren Jones, the chief secretary to the Treasury, defended the use of PPPs in England to expedite healthcare projects. Neighbourhood health centers are part of the Government’s Ten Year Health Plan to enhance community healthcare services and alleviate pressure on hospitals. These centers will offer a range of medical services, including doctors, nurses, dentists, pharmacists, counselors, physiotherapists, and job advisors.
