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Public spending on the NHS is due to fall as a proportion of gross domestic product, from a peak of 8% in 2009-10 to just over 6% in 2020-21.1 The proportion of NHS and foundation trusts in deficit rose from 10% in 2012-13 to 26% in 2013-14, highlighting the scale of the financial challenges facing NHS organisations.2 The payments that trusts are obliged to make under private finance initiative (PFI) deals are a source of budgetary pressure.2 By March 2013 a total of 121 PFI deals had been procured by NHS bodies in England, with an aggregate capital value of £11.8bn ($18.3bn; €16.6bn) and a projected cash cost to the NHS of £81.5bn, £70.1bn of which remained outstanding at that date.3 Two thirds of trusts with a deficit greater than £25m have a PFI deal.2Numerous calls have been made for PFI contracts to be renegotiated.4 Although there is limited scope to reduce the payments to PFI consortiums, NHS bodies normally have the right to terminate them for a price. Interest in the termination approach has grown among NHS bodies after the decision by Northumbria Healthcare NHS Foundation Trust to borrow money from a local county council to buy out the PFI contract for Hexham General Hospital. The termination was completed in October 2014, at which point the PFI was costing the trust approximately £8m a year and had a further 18.5 years left to run.3

Whilst the paper details significant concerns about the one star food hygiene rating, the cleanliness issues identified by the CQC last year and ongoing employee relations issues, there are also a range of ‘hard FM’ issue the Trust continues to push Carillion to resolve.

Since December 2011, Carillion have been in an industrial relations dispute with a Trade Union following concerns raised by housekeeping staff about holiday entitlement, working practices and other allegations. This dispute has resulted in a large number (circa 50) employment tribunal claims lodged against Carillion by their own staff. This process is still ongoing with currently no timescale for resolution and it is clear distraction from the day to day service we require and pay for.

The Trust has lost confidence in Carillion’s ability to resolve these issues and the Trust continues to pursue all means necessary to ensure they remain focussed on addressing them”

Significantly, the report also includes the following:

The report drives a coach and horses through the notion that private companies such as Carillion should have any role to play in the health service and is a damning indictment of the Private Finance Initiative

The Trust does not hold a contract with Carillion. Instead, through the PFI, Carillion are contracted to provide these services by Semperian effectively the ‘owners’ of the building under the PFI agreement.

This therefore means that Carillion’s failings are an issue not only for the Trust in how we protect patients and maintain the quality of patient care, but also for Semperian PPP Investment Partners who we pay for the hospital and to sub-contract the hard and soft FM services.

The ongoing problems we have experienced with Carillion and their inability to resolve some of the more long running issues therefore reflect poorly on both Carillion itself and Semperian.

Concerns about food hygiene and cleanliness, have posed a potential risk to patients, visitors and staff which is completely unacceptable. It is the view of the Executive Team that issues have not been taken as seriously as they should be by Carillion as resolving these outstanding issues is slow and any improvements made are not being consistently maintained.

The important point for the Board to focus on, is not simply this being a contractual issue between companies, but this is a fundamental issue of ensuring the quality of care and treatment we provide to patients is the best it can be. It is also a reputational issue for the Trust in so far as the continual issues with poor quality are adversely impacting on our reputation amongst patients and key stakeholders.

Despite senior meetings between the three main parties on these and other issues (the Trust, Carillion and Semperian PPP Investment Partners who contract Carillion) there remain serious concerns about Carillion’s ability to deliver services to the required standard.

There is clearly a risk to quality and safety which needs to be addressed and Carillion have not demonstrated the ability to adequately resolve any one of these major issues to the required standard, let alone all of them together.

The trust's forecasts for the next five years show a continuing deficit of £38m or more each year and a cash shortfall of at least £40m a year.

The Peterborough City Hospital PFI is costing £40m a year and has 31 years left to run but ending the arrangement would trigger a very substantial one-off payment, the CPT report concluded.

problems with PFI, including the costly contracting process and the prospect of little risk being transferred but high returns being enjoyed by  investors

excess profits being priced into projects

investors receiving eye-wateringly high rewards while taking ever decreasing risks

BC’s public private partnership program was based on the UK’s PFI program and has the same problems.

Last year, the government announced that more than 60 hospitals, run by 20 trusts, were facing financial difficulty because of PFI schemes.

£242 (about $387) for a padlock to be changed or £466 ($746) for a new light fitting

some of these contracts are 2,000 pages long

The problems uncovered by Channel 4 News range from the water supply to the fire safety system. And critics say those kind of problems are emerging up and down the country for this simple reason: the companies which are paid billions to build and maintain hospitals, schools and colleges are trusted to monitor themselves and report when things go wrong. But that doesn't always happen - because it can result in big financial penalties.

The Queen Elizabeth was a project run by Balfour Beatty Workplace, which was sold to the French energy giant Cofely last year.

But things really came to a head this summer when the water supply was contaminated with chlorine on three separate occasions. In one incident it was 16 times higher than the limit recommended by the Drinking Water Inspectorate.

On August 4, high chlorine levels were first detected, and staff and patients were told not to drink tap water. They were given bottled water instead, and an internal investigation was launched.

On August 7, an email was sent to all staff stating: "Estates have been testing chlorination equipment at the Trust and have corrected the fault that caused higher than acceptable levels of chlorine to enter the drinking water. Water across all areas of the Trust has been tested, and it is safe to drink."

Cofely said in a statement: "We took action immediately and the problem was rectified on the same day." But this is just the latest in a series of problems we have uncovered at the hospital during a six month investigation. We have discovered crucial basic flaws in the design of the building which have made it difficult to maintain life-saving equipment.

Just two months before the hospital opened in 2010, Balfour Beatty management were clearly worried. One emailed: "I don't need to tell anyone of the implications of not being able to test them [the dampers] for what is now 2 years." In June, the month the building did open, another manager raised concerns the main hospital building was also affected. "I anticipate we will have the same issue on the main acute [site]".

One whistle-blower who worked for Balfour Beatty Workplace says staff were well aware of the issue. So was the hospital safe? The whistle-blower told me: "If you are not able to gain access to the fire dampers, in order to test them and maintain them then there is no way of telling whether they work correctly or not. So in the event of a fire there is no way to know."

the private sector expects to win £20 billion of business from the NHS, according to the corporate finance adviser Catalyst

a few gluttonous companies—Virgin Care, Serco, Care UK—have secured dominant positions in the market

The biggest privatisations are taking place in community health services.

Local NHS bodies have already been instructed to outsource 39 types of service. Dubbed the “39 steps to privatisation,” this covers everything from autism care to wheelchair provision.

privatisation favours a few big winners over the co-ops, charities and social enterprises

Many Hospital Trusts are being pushed to the financial brink by the disastrous legacy of the Private Finance Initiative (PFI)

In a first for the private sector, in February 2012 Circle took over an entire general hospital at Hinchingbrooke in Cambridgeshire. The hospital has since fallen 19 places in the patient satisfaction rankings and its finances have worsened, forcing Circle to ask for a bailout after just six months. Despite being prepared to make a potential 20 percent cut to the hospital’s workforce, and while mostly owned by investment funds operating out of tax-havens like the Caymen Islands, Circle nevertheless vaunts its friendly-sounding business model under which doctors and nurses are given part-ownership of the company.

another controversial aspect of the Health and Social Care Act—the ability for NHS hospitals to earn half their income from private patients

revealed a tragic case where a consultant left half way through a dangerous birth to carry out a private caesarean section. The baby later died.

many of the dominant players in the new market are owned by ruthless private equity firms

the collapse of the Southern Cross care-home company

All of this comes before the most high-profile part of the Health and Social Care Act has even been fully implemented—the replacement of PCTs with Clinical Commissioning Groups (CCGs)

largely unaccountable new groups, who will in turn outsource the work to privatised “commissioning support units”

Former NHS hospitals, free to generate half their income from private patients, will dedicate their staff and facilities to that end, making it impossible to monitor what is public and what people are paying for.

Billing, invoicing, marketing and advertising will add between 30% and 50% to costs compared with 6% in the former NHS bureaucracy.

some of HCA's American hospitals are under investigation for refusing care and performing unnecessary investigations and treatment, including cardiac surgery. A decade ago it paid the federal government $1.7bn to settle fraud charges, while former chief executive Rick Scott – now the Republican governor of Florida – managed to avoid prosecution.

Unitedhealth, which is currently providing services to the NHS, paid hundreds of millions of dollars in settlement of mischarging allegations in the US; Medtronic paid $23.5m for paying illegal kickbacks to physicians to induce them to implant the company's pacemakers and defibrillators; GlaxoSmithKline and Abbott paid $4.5bn in fines relating to improper marketing and coercion of physicians to prescribe antidepressants and antidementia drugs respectively. Novartis, AstraZeneca, Pfizer and Eli Lilly have all paid large fines for regulatory breaches.

The first Foundations were set up from the wealthiest, most successful hospitals, and have accumulated surpluses of £2 billion – while NHS hospitals which are not foundations face mounting financial problems. Now ministers want to let them make unlimited money from private medicine, while funding for NHS patients is being sharply reduced.

the damage done to hospital cleaning standards by Margaret Thatcher’s government putting cleaning and other support services out to tender in the 1980s

Two decades later hospitals are still struggling with the rising tide of infections and hygiene problems caused.

100 hospitals have been built since 1997 using the “private finance initiative”

Some early PFI hospitals have already paid back double the cost of the hospitals, but still have 15-20 years to pay. Many PFI hospitals are closing beds and wards in the new hospitals and sacking staff to cut costs: some need rescuing by government.

Now services in the English NHS could be opened up by the new government to competitive bids by “any qualified provider”. But the private sector will only bid for services where it is certain of a profit.