Procurement Professional is the official publication of CIPS Australasia

UK health service debt 'stems from badly drawn contracts'

19 Aug 2010

Source:  Supply Management

Poor contract negotiation has been blamed for the high level of debt repayments faced by the UK’s health service across 103 private finance schemes. Figures initially revealed by the BBC showed the NHS owes a total of £65 billion for new hospitals built under the private finance initiative (PFI), with some health trusts spending as much as 10 per cent of their annual turnover on annual repayments.

A spokesperson for the British Taxpayers Alliance said “These seem to have been badly negotiated and this is why the NHS faces these costs. A lot of the costs are hidden and not out there in the open.

“We want to see more transparency about how these contracts have been drawn up and exactly what the process is, so there could be more chance for a bit of competition and better value for the taxpayer.”

The NHS currently pays back £1.25 billion a year but this will rise to £2.3 billion by 2030, with a final payment being made in 2048.

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