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The crux of it is...
A Hospital Trust agree to a PFI (Private Finance Initiative) with a private investor;
The investor provides the Trust with money to build a new hospital, buy new equipment, rennovate buildings etc.
The Hospital now effectively 'rents' the building, equipment etc. from the PFI company, and pays it back over a period of time (e.g. 50 years).
That's basically it - it's just like getting a very wealthy partner, but then having to buy them out. It gets complicated and creates problems though as a PFI typically has a commercial interest of some kind though (e.g. it may be a building firm, or a firm of accountants). If the PFI was, say, McAlpine Builders, and the hospital Trust decided it wanted to build a new ward, it couldn't go to Joe Bloggs Builders down the road who'll do the job for �20,000. Instead, it has to use the PFI's choice (since it's their money that's paying for it) - which will typically be, guess who, Robert McAlpine.
A Hospital Trust agree to a PFI (Private Finance Initiative) with a private investor;
The investor provides the Trust with money to build a new hospital, buy new equipment, rennovate buildings etc.
The Hospital now effectively 'rents' the building, equipment etc. from the PFI company, and pays it back over a period of time (e.g. 50 years).
That's basically it - it's just like getting a very wealthy partner, but then having to buy them out. It gets complicated and creates problems though as a PFI typically has a commercial interest of some kind though (e.g. it may be a building firm, or a firm of accountants). If the PFI was, say, McAlpine Builders, and the hospital Trust decided it wanted to build a new ward, it couldn't go to Joe Bloggs Builders down the road who'll do the job for �20,000. Instead, it has to use the PFI's choice (since it's their money that's paying for it) - which will typically be, guess who, Robert McAlpine.
Simplified version
1. Health service get in financial trouble
2. Health service asks willing companies to build hositals
3. Willing company says yes and builds it
4. Company rents it back to Health service
5. Company charges extra for any maintenance or changes
6. Company makes a fortune over 5-50 years
7. Health service get in even more financial trouble
8 Government blames the last lot for all the debt
1. Health service get in financial trouble
2. Health service asks willing companies to build hositals
3. Willing company says yes and builds it
4. Company rents it back to Health service
5. Company charges extra for any maintenance or changes
6. Company makes a fortune over 5-50 years
7. Health service get in even more financial trouble
8 Government blames the last lot for all the debt
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