Public Private Partnership and Barts Health

I have received the following email.

Dear Daphne,

This is an extract from the minutes of the Barts Health NHS Trust Board Meeting held in public on 7th January, 2015:

Questions and comments were invited and received from members of the public and the questions were duly answered by members of the Trust Board as follows:

It has been calculated that over an 8 year period Capital Hospital Limited made a profit out of the Barts and The London PFI of £150 million, while the Trust’s Board Assurance Framework recognises PFI inflationary cost pressures as an “increasing level of challenge to the long term financial sustainability” of the Trust. What does the Board intend to do to address this?

Mr Dalal, Chair of the Finance and Investment Committee, noted that the original PFI contracts could not be renegotiated. Options to mitigate the impact could include additional central support, particularly given the difference in costs associated with the PFI methodology compared with direct funding.

He suggested that, although this discussion needed to be taken forward with the Department of Health, the Board’s view had been that a prerequisite of any discussion would be the need to demonstrate effective management of other aspects more directly within the Trust’s control.

Unfortunately, progress on this had been difficult due to the weaknesses in financial controls highlighted in recent board reports. These issues would, however, need to be addressed as part of the Trust’s trajectory towards foundation trust status.

I thought the above may be of interest to you and your readers, given the plethora of Private Public Partnerships being considered now. It raises awareness of the considerable profit the private sector can (and actually does) make from PPP deals in the health sector.

Unfortunately for the Trust, at that meeting it forecast a £93 million deficit by the end of the financial year, with the real possibility of needing to opt for a government bail-out.

As an aside, it is normal practice for all NHS trusts to open the first part of the board meeting to the general public and the press, and to allow them to raise any questions/issues they may have.

At the conclusion of this open part of the trust board meeting, a lawful resolution is usually tabled whereby representatives of the press and other members of the public are excluded due to the confidential nature of the business about to be transacted. They then publish the trust board meeting minutes on their website.

This is known as transparency.

The extract also clearly highlights the importance of having an in-house management team with the appropriate level of skills and planning expertise, to ensure that effective and high quality contract management and monitoring-control systems are implemented over the life of the contract term with the private sector.

This is called meritocracy. Employing ‘people of trust’ will not cut it.