Figures obtained by the SNP show the NHS will have to pay over £1 billion in the next five years in payments for Labour’s PFI legacy.  The £1.01 billion of payments is revealed in information from the Treasury.

The cost of PFI contracts for the Edinburgh Royal Infirmary, Wishaw General and Hairmyres Hospital amounts to more than the capital cost of the projects themselves – with more payments in years after that as a result of Labour’s PFI and PPP deals.

Between 2010-11 and 2014-15

  • NHS Lothian will pay £228 million for Edinburgh’s Royal Infirmary – despite the capital cost of the hospital being only £206 million overall.
  • NHS Lanarkshire will pay £136 million for Wishaw General – a project worth £121 million and £106 million for Hairmyres, worth only £68 million.

SNP MSP Kenneth Gibson said:
“These new figures from the Scottish Parliament, based on information from the Treasury show the legacy Labour has left for Scotland.
“Over a billion of repayments in the next five years is a devastating hit to the NHS budget – particularly at a time when budgets will be under increasing pressure as a result of Labour’s economic mismanagement.
“PFI is typical of Labour’s irresponsible buy now, pay later approach to public spending.
“The NHS will pay more to banks in repayments over the next five years for three hospitals than those hospitals are actually worth. That is an example of the profligacy and incompetence that characterised Labour’s financial management and that Scotland’s public services are now paying for.
“After taking out repayment policies like this Labour has no credibility left on public spending and must answer to NHS staff and patients who are left facing up to Labour’s outrageous debts."

Yesterday the Scottish government announced a £300 million investment to deliver 35 new Scottish schools.  This will form part of a £1.25 billion Scotland's Schools for the Future programme launched as part of the Scottish Futures Trust.


# spagan 2010-06-03 20:11
This is the main reason why Health Boards are having to plan cuts in staffing.
A discredited Tory policy brought to Scotland by a discredited New Labour Chancellor.
The man who put the "F" in Finance, Lord Gordon Brown.
Slainte Mhor
# Clare 2010-06-03 22:00
Exactly Spagan. I wish Nicola had thought to mention it today.
# mato21 2010-06-03 20:13
I have just in the last hour emailed N.Sturgeon to ask why this scandal is not brought to the forefront of every answer to labours cry of cuts
# brusque 2010-06-03 21:22
And those are only 2 Health Boards. Highland Health Board will be paying for their new (10 years old now) Mental Health Unit for years, and even then it is only on a lease agreement. The company who built it can double the lease amount when the current lease runs out, or take back the buildings!
# brusque 2010-06-03 21:36
And not only that, but the New Hospital was built on land which already belonged to the Health Board, and they gave up land worth many millions in exchange for the company building the new hospital.

I'd love to know how many brown envelopes changed hands during those negotiations.

I could weep for all the money that Labour flushed down toilets; or lined their own pockets with. They should be run out of the country never mind office!
# m4rkyboy 2010-06-03 23:35
The new hospital in Larbert,is this a PFI funded project?Anyone know the budget?How much has it inevitably ran over?I cant seem to find this info anywhere
# DouglasDaniel 2010-06-04 01:13
I'll never be able to understand why anyone ever thought PFI was a good idea. Just like I'll never understand why people think public services run for private profit are a good idea. I can only assume that the massive fundamental flaws are deemed so obvious that no one bothers to bring them up, and so they get forgotten about.
# kevinad72 2010-06-04 11:06
PFI should be part of the national conversation, as it affects the people's sovereignty as much as anything else. There should be a detailed information leaflet to every household before the next election, explaining what this is as a matter of public information.
Douglas asks why. I suspect that a perusal of some of the practices common to Italian politics might provide some leads. Or what is the logical conclusion to the offers to 'lobby' of Byers, Hewitt and Hoon?
# Traquir 2010-06-04 13:47
And it gets worse -

'Equity of just £100 invested in rebuilding Hairmyres Hospital in East Kilbride is projected to earn £89 million in dividends over 30 years, while half a million pounds of equity in the new Edinburgh Royal Infirmary is expected to win dividends of £168m.'

Sounds like the Brit Nats need to report one of their 'Scottish' newspaper possessions for inadvertently slipping out the truth, rather that than the approved Brit Nat Labour Memo "PFI is wonderful, PFI is great - no problems here.". No reality here more like. "The great PFI swindle"

Also interesting to note that respected economists the Cuthberts did much of this analysis.

"Firm that hit the jackpot with PFI deals set to lay off" "CONSTRUCTION group Kier is set to re-ignite the heated debate over the financing of Scotland's public infrastructure projects this week when it confirms that it has pocketed GBP16.2 million profits from its role in building Hairmyres hospital in East Kilbride - from an initial investment of only GBP50."

"Leading economists Jim and Margaret Cuthbert have analysed details of the PFI scheme at Hairmyres for the Sunday Herald, and say that most of the gains stem from the initial financing deals, where Kier and Innisfree put up a total of GBP8.4m in subordinate debt, charged at a rate of return estimated at 18.8per cent annually. They believe the partnership will get a return of GBP145.2m on this debt over the 30-year life of the agreement"

My don't the comrades and their 'friends' do well out the of this Union arrangement. No wonder they don't want to give it up.
# Traquir 2010-06-04 13:52
Interesting to note that the Cuthbert's have established a website with much of their research which is well worth reading for those interested in the facts.

The basic point here is that the Cuthbert's want to prevent a repeat of the proven disaster which is Labour's PFI, and their detailed analysis shows what an utter scam it has been.

Scam / capital invested by companies / projected cash return

New Royal Infirmary, Edinburgh / £20m / £228m
County Hospital, Hereford / £9m / £92m
Hairmyres Hospital, East Kilbride / £8m / £145m
Council offices and car park, Perth / £2m / £31m
Eleven schools, Highland / £2m / £12m
James Watt College, Kilwinning / 0.7m / £9m
TOTAL / £42m / £517m see -

I wonder how many of the Labour comrades or the few Union worshipers have
had their snouts in the trough to get their 'fair' share of these obscene profits. Why can't Scotland just issue bonds like many other modern economies where truly fair interest
rates combined with tax incentives are a proven way to finance growth. The reason of course is that the controlling centre of the British Capital that is London will not willingly let
go any powers, especially the purse strings which represent how they can guarantee the ongoing subsidies that prop up the South East of England.
# hektorsmum 2010-06-04 15:55
Funny that, Yesterday morning Good Morning Scotland, the reason for cutting staff, PFI's. Last night 10.30 TV news, all to do with staff wages. Baron F anyone.

Yes Clare, I want to know why this was not put to the Labour Group also.
# Teri 2010-06-04 18:46
Remember also that many schools built under Labour were under PFI contracts. Education budgets suffer similarly to hospitals.
# Clare 2010-06-04 21:23
Bang on Teri. It is likely that ALL new schools built in the years between the Scottish Parliament being established and 2007 were completed under PFI. Education budgets will indeed suffer.
# 1scot 2010-06-06 16:14
I live in Renfrewshire and the previous Labour controlled council did the same. 3 new schools and an upgrade of another at a cost of 14 million a year.Most of this goes to the RBS, which is now owned by the taxpayer. Is there no way this could be stopped.Labour are an absolute disgrace. Watching Cunnunghame saying more nurses and less Nats made my blood boil. The BBC must be made to suffer.

You must be logged-in in order to post a comment.


Donate to Newsnet Scotland


Latest Comments