NHS trust criticised for 'catalogue of mismanagement' over £411m PFI deal: Peterborough and Stamford NHS trust used 'hopelessly inaccurate' projections to sign unaffordable contract, auditors report
Mistakes and reckless misjudgment by a major hospital led to it signing an unaffordable PFI contract that has left it with the largest deficit in the NHS, a scathing National Audit Office report has revealed.
The government's spending watchdog blames the board of the NHS trust running Peterborough city hospital for going ahead with a £411m PFI scheme that has contributed to massive financial problems.
"A catalogue of mismanagement, poor procurement and inadequate external oversight has placed a stranglehold on Peterborough and Stamford NHS trust's financial future, rendering it totally incapable of balancing its books", said Margaret Hodge MP, who chairs the Commons public accounts committee.
The trust failed to recognise that the PFI deal, which saw services at three smaller hospitals merged onto one large, new-build facility, would involve huge costs for many years to come that it could not afford, the NAO says. It then compounded that error by not appreciating that other changes in its income and costs would threaten its financial position and "accepted unrealistic projections of future trust finances", it adds.
The costs of servicing the PFI deal were a key reason for the trust running up a deficit of £45.8m in 2011-12, which, at 22% of its turnover, was the worst recorded in the NHS. Its own projections, which Hodge dubbed "hopelessly inaccurate", envisaged a £500,000 surplus that year.
It is due to record a deficit of more than £50m in the current financial year and is one of seven trusts with unaffordable PFI debts to receive money from a special £1.5bn Department of Health (DoH) bailout fund to help keep them afloat.
"The trust's board failed in its duty to check whether its original and preferred plan for the hospital was affordable. It pressed ahead with an over-optimistic business case", added Hodge. "The trust was shockingly slow to recognise and respond to its deteriorating finances. Owing to its poor oversight, early warning signs slipped by unnoticed", added Hodge.
The NAO also criticises the DoH for not being sceptical enough about the scheme's affordability and Monitor, which regulates semi-independent foundation trust hospitals like Peterborough, for not ensuring that the trusts's financial performance was matching that detailed in its business plan.
The health union Unison estimates that by the time the trust has paid off the 33-year contract in 2043 it will have cost it a total of £1.96bn. It wants a public inquiry into why the scheme went ahead. "PFI is a complete and utter disaster for the taxpayer. The trust needs a huge injection of cash. It has a turnover of £250m but a projected deficit of over £50m. That's not sustainable", said Tracey Lambert, Unison's regional officer for health in the east of England.
A DoH spokesman said the Peterborough deal was "another example where PFI policy went badly wrong", though other problems at the trust had contributed to its terrible financial picture.
"The financial situation of the Peterborough city hospital is extremely worrying", said a spokeswoman for the British Medical Association. "We have long argued that PFI represents poor value for money for the NHS and that the inflexibility of repayment regimes under PFI can create problems." The Guardian
Mistakes and reckless misjudgment by a major hospital led to it signing an unaffordable PFI contract that has left it with the largest deficit in the NHS, a scathing National Audit Office report has revealed.
The government's spending watchdog blames the board of the NHS trust running Peterborough city hospital for going ahead with a £411m PFI scheme that has contributed to massive financial problems.
"A catalogue of mismanagement, poor procurement and inadequate external oversight has placed a stranglehold on Peterborough and Stamford NHS trust's financial future, rendering it totally incapable of balancing its books", said Margaret Hodge MP, who chairs the Commons public accounts committee.
The trust failed to recognise that the PFI deal, which saw services at three smaller hospitals merged onto one large, new-build facility, would involve huge costs for many years to come that it could not afford, the NAO says. It then compounded that error by not appreciating that other changes in its income and costs would threaten its financial position and "accepted unrealistic projections of future trust finances", it adds.
The costs of servicing the PFI deal were a key reason for the trust running up a deficit of £45.8m in 2011-12, which, at 22% of its turnover, was the worst recorded in the NHS. Its own projections, which Hodge dubbed "hopelessly inaccurate", envisaged a £500,000 surplus that year.
It is due to record a deficit of more than £50m in the current financial year and is one of seven trusts with unaffordable PFI debts to receive money from a special £1.5bn Department of Health (DoH) bailout fund to help keep them afloat.
"The trust's board failed in its duty to check whether its original and preferred plan for the hospital was affordable. It pressed ahead with an over-optimistic business case", added Hodge. "The trust was shockingly slow to recognise and respond to its deteriorating finances. Owing to its poor oversight, early warning signs slipped by unnoticed", added Hodge.
The NAO also criticises the DoH for not being sceptical enough about the scheme's affordability and Monitor, which regulates semi-independent foundation trust hospitals like Peterborough, for not ensuring that the trusts's financial performance was matching that detailed in its business plan.
The health union Unison estimates that by the time the trust has paid off the 33-year contract in 2043 it will have cost it a total of £1.96bn. It wants a public inquiry into why the scheme went ahead. "PFI is a complete and utter disaster for the taxpayer. The trust needs a huge injection of cash. It has a turnover of £250m but a projected deficit of over £50m. That's not sustainable", said Tracey Lambert, Unison's regional officer for health in the east of England.
A DoH spokesman said the Peterborough deal was "another example where PFI policy went badly wrong", though other problems at the trust had contributed to its terrible financial picture.
"The financial situation of the Peterborough city hospital is extremely worrying", said a spokeswoman for the British Medical Association. "We have long argued that PFI represents poor value for money for the NHS and that the inflexibility of repayment regimes under PFI can create problems." The Guardian
No comments:
Post a Comment