Labour Rebellion Over NHS Funding Model
Labour MPs are mounting significant opposition against Health Secretary Wes Streeting's controversial proposal to use private capital for building neighbourhood health centres across the NHS. The rebellion comes as concerns grow about repeating what critics describe as the mistakes of previous private finance initiatives.
The Payday Loan Comparison
Johnbosco Nwogbo, lead campaigner at We Own It, has drawn a stark comparison between the proposed funding model and a family using payday loans to purchase a home. While acknowledging that buildings would be constructed, he warns that the ongoing financial burden would force trusts to make damaging cuts elsewhere, potentially affecting patient care directly.
The concerns are amplified by Rachel Reeves's limited fiscal flexibility. Experts doubt that NHS budgets will increase sufficiently to cover inflation, the healthcare demands of an ageing population, and potential drug price rises. Adding private finance debt repayments to this mix could create an unsustainable financial pressure on health trusts.
Historical PFI Problems Resurfacing
Research highlighted by campaigners reveals that some NHS trusts currently spend more on annual PFI debt repayments than on patient medications. A new briefing from We Own It examines various private finance models and concludes they all damage NHS finances in the long term.
Campaigners argue that Streeting's proposed model would likely produce similar negative outcomes to previous PFI schemes, despite any modifications intended to improve the approach.
Alternative Funding Solutions Proposed
Opponents of the private finance plan point to several alternative funding methods that could support NHS capacity investment without resorting to private capital. These include:
Recovering wasted public funds from COVID contracts, building on Reeves's demonstrated ability to claw back misspent money. The same approach could potentially be applied to historic PFI deals that continue to burden the NHS.
Introducing VAT on private healthcare, a policy previously supported by former Labour leader Neil Kinnock. This measure could raise approximately £2 billion annually for the health service.
Nwogbo emphasises that Streeting and Reeves have viable alternatives, stating that choosing private finance represents a political decision rather than a financial necessity.
The Case For Private Investment
Not all voices in the debate oppose private finance involvement. Lord Hutton, former Labour cabinet minister and chair of the Association of Infrastructure Investors in Public Private Partnerships, defends the record of previous PFI schemes.
He points to National Audit Office findings that PFI projects were typically delivered on time and within budget. The schemes also secured long-term maintenance commitments, protecting NHS facilities from future cost-cutting measures by chancellors.
Hutton highlights the success of the NHS Lift programme, which included public sector stakes and delivered 350 health centres in some of Britain's most deprived communities. He warns that ideological opposition to private finance could leave patients waiting in crumbling, overcrowded buildings for years to come.
The Construction Timeline Contrast
The debate features striking comparisons between different approaches to hospital construction. Under PFI arrangements, 90 hospitals were rebuilt in less than a decade, generally providing good value for money.
In contrast, the current non-PFI hospital building programme, announced six years ago, won't see most construction begin until 2032. This significant timeline difference adds weight to arguments that private finance can accelerate vital healthcare infrastructure development.
As the debate intensifies, the government faces difficult choices between rapid infrastructure delivery through private funding and maintaining complete public control over NHS assets and finances.
