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Home Local News Parliament Articles Speeches Richard Media South Norfolk Expenses Contact
| PFI company gets £95m as Norfolk & Norwich hospital struggles |
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He was speaking as the Commons public accounts committee today (Wednesday 3 May 2006) published a report on the refinancing of the Norfolk and Norwich PFI hospital by the PFI consortium Octagon Healthcare, which borrowed an extra £106 million at the time of the refinancing in order to triple its rate of return from 19% to over 60%. In the refinancing, Octagon Healthcare received an immediate £95 million cash benefit. The Norfolk and Norwich hospital, following advice from the Department of Health, only receives its share of the gains spread over 35 years in the former of slightly lower payments to the PFI consortium.
Mr Bacon, a longstanding critic of PFI and a member of the
committee, said: “This extra borrowing was not to build more wards or a new cardiac
unit. It wasn’t even for a bigger car park. The sole purpose of this
extra borrowing was to speed up the rate of return to the
investors”. “It is hardly surprising that people are sceptical of PFI when it produces outcomes like this. PFI has produced spectacular returns for investors but nurses and others hospital workers facing the sack will rightly feel very angry and will not understand how it has been allowed to happen”.
“The quality of advice from central government has been woeful.
While the investors took their £95 million cash benefit immediately
after the refinancing, the Department of Health advised the hospital
to take its share of the refinancing gains spread over 35 years, in
the form of slightly lower payments to the PFI provider. Yet given
the choice between cash now and cash later, most people wouldn’t
hesitate to take it now”. 3 May 2006
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| © Richard Bacon 2010 | |||||||