PFIs ‘safe’ despite NHS trust administration

16 July 2012 The two PFI contracts at the centre of the South London Healthcare NHS Trust are unlikely to be affected despite the trust being effectively put into administration.
Last week, Health Secretary Andrew Lansley announced the trust is being put into the Regime for Unsustainable NHS Providers, which will see a Special Administrator assuming full control of the trust.

The administrator will now undertake a report, to be published by mid-January, with recommendations from that report then being implemented from next year.

However, concerns that the administrator could suggest tampering with or undermining the two PFI contracts have been allayed, as he has already suggested any changes to those contracts would be up to central government and not the trust itself.

Experts also suggested the government is unlikely to allow the public sector to default on its PFI repayments, not least because of the impact that would have on investor confidence in the market at a time when the government is trying to engineer a new model for private investment.

“They would be facing litigation from the private sector, compensation claims, and a whole sea of trouble, frankly,” said one lawyer.

Another pointed to the NHS Act 2006, which makes it likely that either a neighbouring health authority or the Health Secretary himself will take responsibility for the PFI repayments.

This page was last updated on:
23 October 2014.

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