Forty Labour MPs have written to Chancellor Rachel Reeves urging her to abandon plans to fund NHS buildings with private finance initiatives (PFI), warning that such schemes would saddle the health service with debt and offer poor value for money.
The MPs, including Cat Eccles, Clive Lewis and Rebecca Long-Bailey, said a return to the New Labour era of private funding for public projects would be damaging for trust in the government. In their letter, they argued that using private finance is more expensive than publicly funded alternatives and has contributed to crippling debts in the NHS, with 80 trusts still paying back a combined £44bn.
The MPs cited the Office for Budget Responsibility, which in 2017 described off-balance-sheet financing for public infrastructure as a 'fiscal illusion', and the National Audit Office, which found that PFI hospitals are 70% more expensive than publicly financed options. They noted that the government's infrastructure strategy and 10-year health plan mention exploring private capital for NHS facilities, including neighbourhood health centres, but said such small-scale projects represent even worse value.
More than 50 academics, including Labour peer Prem Sikka, have also written to the chancellor asking her to abandon the proposal and fund public services through direct taxation or borrowing. Health Secretary Wes Streeting has sought to reassure MPs that any new use of private finance would be limited and targeted, aiming to avoid past mistakes.
A government spokesperson said the government is exploring the feasibility of new public-private partnership models in very limited circumstances, such as for primary and community health infrastructure or decarbonising the public estate, and will build on lessons learned from past models.
