3. In order to ensure that the best use is made of scarce public funds to care for patients at a time of extreme austerity the NHS and the government should look at ways to curtail excessive profit-making from PFI contracts. The following strategies are available:
• Use public sector loans to buy out PFI contracts (11 PFI contracts have been bought out since the 1990s, including two NHS hospitals)
• tax PFI companies to recoup some of the excess profits which have been made;
• cap the amount of profit which can be made by a private company which has an exclusive public sector contract with the NHS;
• ensure that when PFI companies sell equity stakes in their contracts the profits made from the sale are shared with the NHS party to the contract;
• mandate greater transparency of equity sales to prevent the unnoticed consolidation of market power by a few investors, with the potential to reduce competition at the expense of taxpayers in future; and
• re-negotiate the contracts with the PFI companies to reduce the amount that the NHS pays.
4. Finally, as we have noted in a previous report, the government should reconsider its use of the Private Finance Initiative and consider using public borrowing to fund new capital investment in hospitals.2 This is likely to be much cheaper and will mean that less money for patient care will be wasted in payments to shareholders, which is particularly important when the NHS is going through the most austere decade in its history.