Revealed: The £100m a year cost of private finance deals to NHS Lothian

High cost of finance terms is sucking essential funding from our local health services

Lothian’s health service is in desperate need of capital investment to upgrade infrastructure which is often outdated and inadequate to meet the needs of modern healthcare.

But the high cost of funding many of the projects in Lothian over the past two decades is catching up with us, with around £2 million of NHS Lothian cash being lost every week to repayments of expensive Private Finance Initiative deals - that’s money used to pay for treatments, and for the doctors, nurses, and other health workers who provide them.

In essence, successive Governments have repeatedly asked our health service in Lothian to raise finance for these vital projects by borrowing against all of our futures. And borrowings have to be repaid.

The extent revealed by an Edinburgh Inquirer FOI request has caused two of the most influential health organisations representing doctors and nurses to raise concern that it is adversely affecting patient care and safety.

Investment is needed; but how do we pay?

The need for investment in our health infrastructure is evident in the scope and scale of three proposed major new build projects paused by the Scottish Government because of a lack of funds; a new Edinburgh Cancer Centre; a new treatment centre at St John’s in Livingston; and a replacement for the Princess Alexandra Eye Pavilion.

We’ve already highlighted them, and in particular we highlighted the enormous need for the new £1 billion Edinburgh Cancer Centre and the new treatment centre at St John’s Hospital which is essential to start tackling waiting times that are breaking record levels.

All three projects are needed. But, as and when they do come back onstream, how much will they then cost and how will we pay for them? Because make no mistake, our cherished health service is not free. We all pay for it as we are able to, through our taxes, so it will be there when any one of us needs it. So will the Scottish Government, this time, use our tax to provide significant direct funds?

Or will NHS Lothian, already the worst-funded health board in the country per capita, be forced yet again to go down the more expensive route of private finance initiative-style borrowing? It is a route we have been channeled down more often than other boards.

Today, let us tell you why that matters. NHS Lothian has had around a dozen PFI funded projects – ranging from the Royal Infirmary of Edinburgh to local health centres. And through a Freedom of Information request we have learned the associated costs of servicing and maintaining the contracts is sucking up to £100million a year from NHS Lothian’s revenue budget.

Broadly speaking, that’s enough to pay the annual salaries of more than 3000 qualified nurses, or in terms of doctors more than 2000 hospital registrars with two years of experience.

There are, of course, unavoidable costs in borrowing money to pay for a building, and then paying for its maintenance. But the very high level of PFI costs have come under increasing scrutiny.