The Cost of Using Private Finance to Build, Finance and Operate Hospitals

Posted: 14 Mar 2008

See all articles by Jean Shaoul

Jean Shaoul

University of Manchester - Division of Accounting and Finance

Anne Stafford

affiliation not provided to SSRN

Pamela Stapleton

University of Manchester - Division of Accounting and Finance

Abstract

This article analyses the cost of using private finance to build hospitals under the UK government's Private Finance Initiative (PFI). Hospital trusts' annual payments to their private sector partners are higher than expected and are taking 11% of their budget. The additional cost of private over public finance for the first 12 hospitals is about £60M a year, which is 2025% of the trusts' income. PFI charges create budget inflexibilities and are increasing the pressure on the NHS to cut their largest cost: the jobs, working conditions and pay of their staff.

Suggested Citation

Shaoul, Jean and Stafford, Anne and Stapleton, Pam, The Cost of Using Private Finance to Build, Finance and Operate Hospitals. Public Money & Management, Vol. 28, Issue 2, pp. 101-108, April 2008, Available at SSRN: https://ssrn.com/abstract=1105562 or http://dx.doi.org/10.1111/j.1467-9302.2008.00628.x

Jean Shaoul

University of Manchester - Division of Accounting and Finance ( email )

Manchester
United Kingdom

Anne Stafford

affiliation not provided to SSRN

Pam Stapleton

University of Manchester - Division of Accounting and Finance ( email )

Crawford House
Oxford Road
Manchester M13 9PL
United Kingdom

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