Green Party

Greens call for rethink on N&N PFI deal

A Norwich councillor was today set to call on the government to buy out the controversial deal which financed Norfolk's flagship hospital during a speech in which he describes it as "like buying your house on a credit card".

In his deputy leader's speech at the Green Party conference in Hove, Nelson ward councillor Adrian Ramsay will say £217m could be saved over the next 30 years if the hospital is brought back under full public ownership.

As previously reported, the figures come from a study by economist Chris Edwards, who is a senior fellow at the University of East Anglia.

The Colney hospital is currently owned by the private company Octagon Healthcare and leased to Norfolk and Norwich University Hospital NHS Trust at a cost of £37.1m a year out of its £250m budget.

Mr Ramsay will say: "Funding new hospitals and schools through private finance initiative is like buying your house on a credit card, rather than getting a mortgage.

"Labour's short-term approach to the funding of public services makes us beholden to the private sector for decades to come.

"Under Labour's private finance initiative, our new schools and hospitals have cost much more than they should have done, and taxpayers' money is lining the pockets of private companies instead of improving public services."

The Green Party is calling on the government to buy back PFI hospitals around the country, which, in the Norfolk case, could be done despite the £300m penalty clause, according to Dr Edwards.

However, the figures used by the economist have been questioned by the National Audit Office.

In a letter to Dr Edwards, officials state: "Your analysis of the rate of return from buying back PFI contracts appears, however, to significantly underestimate the cost to the public purse of termination."

The letter says sums, such as financing breakage fees and compensation to the bondholders and equity shareholders, should have been included but Dr Edwards said that he used official figures from the Public Accounts Committee and added that if they are incorrect it should have been highlighted sooner.

While no one from Octagon Healthcare was available for comment, a spokesman for the hospital said buying out the PFI was not feasible and that overall quality of care had been judged by patients as among the best in the country.