8. We have heard that LIFT has generated greater innovation in the health sector than PFI. Do you agree? Does the NHS LIFT partnership represent an improvement on PFI, albeit meeting a different set of needs?
There is very little evidence on the performance of LIFT. Ultimately, it stems from similar considerations to PFI-the absence of public capital. This gives cause for concern. We know from evidence given to the House of Commons Public Accounts Committee in 2005 that some GPs regard LIFT as a major call on NHS resources. For example, Dr Kohli, who runs a practice in Newham, stated to the committee that in his Primary Care Trust, two LIFT buildings served 8% of the population but consumed 33% of the premises budget. The opportunity cost of such a commitment is obviously very significant.
We also know from the NAO report (2005) that average rates of return on the equity component of the financing package exceed those of PFI. There are, in our opinion, some problematic elements of the LIFT approach. The model involves the creation of joint ventures which create clear conflicts of interest for PCTs. Trusts provide minority equity capital to put into the joint ventures with the private sector, which then have exclusive rights to provide all buildings needed by the PCT for a number of years. PCTs are thus the joint owners of organisations with which they then enter into contracts.
None of this provides conclusive evidence of LIFT's cost-effectiveness. However, it does demonstrate the importance of understanding more about LIFT's value for money. The Department of Health stated to the Public Accounts Committee that it was developing a mechanism for evaluating the model. It is unclear if this work has been completed, and this is something the Economic Affairs committee may want to pursue.