Private finance initiative

Editor—Smith voices concerns about the private finance initiative.1 The initiative is a procurement process. Many of his assumptions apply equally to traditional procurement. He did not highlight the advantages that can be realised from a new hospital. Through the private finance initiative, the public purse pays for this over several years in revenue payments, but traditional procurement would have increased capital charges and rates. Smith claims that reducing bed numbers is one effect of an unaffordable system. Not so. We in Hereford are implementing a county-wide healthcare system, not just running a new hospital. Our strategy embraces recent changes in technology and management, including better use of community facilities, improved links with social services, and more home care within an NHS led by primary care. Consequently, fewer beds are needed. However, we have not assumed we have got it right. We have planned flexibility by maintaining some beds in refurbished accommodation. We have quality new facilities and the flexibility to maintain services appropriately should other changes in health care occur. Service delivery is not reducing in Hereford. Clinicians have fully participated in developing our project, and clinical functioning is paramount. We are satisfied with the result. Smith discusses increasing private beds. We have no private beds. None are being planned to fund this project. He also raises the issue of secrecy and the nature of the planning process using bed numbers “without thought for the knock-on for other parts of the NHS.” This may be found to be so elsewhere, but in Hereford the scheme is part of a county-wide strategy. There was no closed decision making in Hereford. The full business case is in the public domain. Smith may be right that one day there will be a scandal, as there have been with traditional procurements. With the private finance initiative these risks are reduced by transfer to the private sector, which is best able to deal with them. Consider the advantages of the initiative. Our new hospital includes a new infrastructure for information technology and managed services for imaging and maintaining equipment. Our clinicians will work with the most modern imaging equipment throughout the lifetime of the contract. Imperfections in the private finance initiative can be reduced by learning from the pilot schemes. The initiative is the government's chosen means of redeveloping public facilities. It should not be assumed that just because the private sector is involved in a partnership with the NHS it is wrong.