UK - NHS plan for new form of PPP falters

A NHS plan, published in 2000, outlining a new type of PPP is faltering as banks are refusing to invest. The scheme was planned to redevelop 3000 health properties and create 500, one-stop primary care centres by 2004 using £1bn of private money. Three years on from these proposals only one scheme has reached financial close.

Problems surrounding the scheme have forced some banks to cut back their investments, others have withdrawn completely. Richard Tierney of BDO Stoy Hayward, said: "It is clear that many banks, even those that are comfortable with PFI, are reluctant to get involved in LIFTs on the current terms. They can see a lot of risks in the initiative, and banks don't like risk. The lack of progress on LIFT is a matter of real concern”

Whilst many projects have got as far as preferred bidder stage this does not reflect the problems that are clearly prevalent. This is because the bank signature is not required up to this stage. It is only needed to get the project to financial close. As it stands only the £55m East London & City LIFT, where merchant bank Babcock & Brown is the private partner, has reached financial close