23. A recent study42 concluded that soft services provided by PFI hospitals are more costly and at a lower quality than non-PFI hospitals. The study cites an unpublished report by the National Audit Office (NAO), compiled in 2007, that compared the cost and quality of security services; linen and laundry services; portering and cleaning services in the first wave of PFI hospitals and non-PFI hospitals, and showed that all four services were cheaper and of better quality in non-PFI hospitals. Security cost £3.13 per sq m in PFI hospitals compared to £3.03 in non-PFI hospitals. Linen and laundry services had a cost of £8.44 per sq m in privately financed hospitals, but only £7.64 for those where procurement was traditional design and build. The cost for cleaning services was £22.77 per sq m in PFI hospitals and only £20.47 in the others. Cleaning services were highlighted as poor and more expensive, with 41% of clinicians reporting that the level of service was "poor" or "very poor".
24. The most corrosive effect of PFI comes from its huge cost. In 2008 a study by the Manchester Business School43 concluded that the additional cost of private finance for the first 12 hospitals was about £60 million a year, which is 20-25% of the Trust's income, creating serious budget inflexibilities for the Trusts. The higher costs of PFI often lead to affordability gaps, which have to be met by the public purse. This in turn puts pressure on jobs and the quality of services and have a knock on effect on non-PFI services.
25. UNISON's report Reclaiming the Initiative-putting the public back into PFI (June 2009) looked at how billions of pounds of public money have become locked into financing expensive PFI schemes. It warned that the Government has committed taxpayers to a bill of more than £217 billion in "user charges" for PFI schemes with a capital value of just £64 billion, between now and 2033-34. Public funding and ownership could save as much as £3 billion per year. There is also evidence that when services come up for review they are adjusted upwards. In 2007 a Public Accounts Committee report cast doubt on the competitiveness of PFI reviews and showed that 2benchmarking and market testing" prices during the contract increased prices by up to 14%.
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42 Centre for International Public Health Policy, August 2009, The experience of the private finance initiative in the UK's National Health Service, Moritz Liebe, Professor Allyson Pollock.
43 Public Money and Management, April 2008, The Cost of Using Private Finance to Build, Finance and Operate Hospitals Jean Shaoul, Anne Stafford and Pam Stapleton.