A significant rebellion is brewing within the Labour party as MPs forcefully reject Health Secretary Wes Streeting's proposal to use private capital for building new NHS facilities.
The Core of the Controversy
Backbench Labour politicians are pressuring Chancellor Rachel Reeves to completely abandon plans that would involve private finance in the construction of neighbourhood health centres. The opposition draws a stark comparison, suggesting that using such funding would be like a family resorting to a payday loan to buy a home – securing an asset but sacrificing essentials to service the debt.
Critics argue that given the Chancellor's limited fiscal flexibility, the NHS budget is unlikely to see annual increases sufficient to cover inflation, the healthcare demands of an ageing population, and potential rises in drug prices. Adding a new private finance debt burden to this mix, they contend, will inevitably force hospital trusts to cut corners on the one thing they can control: patient care.
A Legacy of Debt and Alternative Solutions
Johnbosco Nwogbo, a lead campaigner for the group We Own It, points to alarming research showing some NHS trusts already pay more in annual repayments for existing Private Finance Initiative (PFI) deals than they spend on medicines for their patients. A new briefing from his organisation outlines how various private finance models damage NHS finances, warning that any new scheme proposed by Streeting would be no different.
However, the debate is not one-sided. Lord Hutton, a former Labour cabinet minister, defends the record of PFIs. He argues that, given the current fiscal rules, health centres simply won't get built without private investment. He cites National Audit Office findings that PFI projects were typically delivered "on time and on budget" and ensured long-term maintenance, protecting buildings from future cost-cutting.
Lord Hutton highlights that 90 hospitals were rebuilt under PFIs in less than a decade, a stark contrast to the non-PFI new hospital building programme announced six years ago, where most construction is not scheduled to begin until 2032.
Political Choice Over Financial Necessity
Opponents of the private finance plan insist that alternatives exist. They suggest the government could claw back funds from historic PFI deals or introduce VAT on private healthcare – a policy once supported by Neil Kinnock that could raise an estimated £2 billion.
The central argument from critics like Nwogbo is that the hands of Streeting and Reeves are not tied. If they proceed with resurrecting private finance within the NHS, it will be seen not as a financial necessity, but as a clear political choice, one that many within their own party are determined to fight.
