1.25 The Trust is entitled to make payment deductions for unsatisfactory service performance. As this was the first PFI hospital contract to be let there was, at that time, no standard payment mechanism for the Trust to follow. However, the Trust's contract correctly provided for the amount of the deduction to increase in line with the seriousness of the incident and for the possibility that deductions in respect of a particular service could be made up to the full amount of THC Dartford's normal charges for that service in any month.
1.26 Over the four years that the hospital has been in operation there have been relatively few lapses in performance. The Trust's records show that up to July 2004 there were 24 examples of FM services being below minimum standards. These are detailed in Appendix 5.
1.27 The Trust made financial deductions totalling £18,691 in respect of 15 FM service events (equal to 0.1 per cent of the payments the Trust has made for these services of around £25 million). THC Dartford was liable for deductions of £8,411 for the other 9 events, but these were offset in full by credits acquired from previous good performance, and were not made.
1.28 The credit system, which allows THC Dartford to carry forward performance above the minimum standard for three months, is intended to incentivise THC Dartford to strive for above satisfactory performance. There is, however, also a risk with this system that, having built up credits, the providers of services can afford to let standards slip, as they will not suffer deductions. Such credit arrangements are no longer recommended under the NHS's current standard payment mechanism.