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Job cuts and the rising pay of doctors are plaguing the United Kingdom’s National Health Service. Also, nearly a third of health trusts are running deficits and some doctors are billing the service in excess of ₤250,000 (CAN$504,000) per year.

Fingers have been pointed at overstaffing and doctors’ billing practices. However, one of the fundamental causes of deficits and job cuts is the high cost of PFI (private financing initiative) hospitals.

So far, Tony Blair’s Labour government has done significant spin control to steer clear of the issue by detracting from the root cause: PFI hospitals eating up massive amounts of trust fund budgets.

Profit margins, maintenance fees, consultant fees and hidden costs are still sucking up massive amounts of public funding, but the Blair government has worked hard to hide those numbers.

A House of Commons debate on March 30, 2006, brought the hidden costs of PFIs into partial public view. Chief Secretary to the Treasury Des Browne admitted that if PFI spending were accounted for on the government books, it would be in breach of its own sustainable investment rules.

(Putting PFI spending) on the balance sheet would put the country in a position in which it could not meet the sustainable investment rule and thus could not invest further in public services and our infrastructure,” Browne said.

Government spending on PFI hospitals and other PFI schemes is mostly based on hiding costs rather than pursuing measured and sustainable investment in public services through publicly accountable government departments.

Once services are run for private profit, the quality of care is reduced and the public service ethos is replaced by a hard-nosed profit motive,” says UNISON, Britain’s largest public sector union. “It is about who makes the decisions about caring for your elderly relatives or your children’s education or housing the homeless: someone with their heart in the right place, or someone with an eye on the balance sheet.”

See this report for a closer look at the real costs of PFIs in the health care sector.

- with notes from The Guardian.