NHS building and equipment contracts 'bring £831m profit in six years to firms'
Private firms with contracts to build and equip NHS hospitals have made £831 million profit over six years, according to new research.
A study by the Centre for Health and the Public Interest (CHPI) found the NHS will pay around £80.8 billion over the life of the private finance initiative (PFI) contracts, 92% of which are run by just eight companies.
The report by the think tank, which analysed Treasury and Companies House data on PFI schemes between 2010 and 2015, estimated the deficit for hospitals covered by the study would have been reduced by a quarter if the money paid out in profits had instead been spent on patient care.
The Government said less than 3% of the NHS budget was spent on PFI.
Labour leader Jeremy Corbyn has previously called for an end to the schemes and the party's Walthamstow MP Stella Creasy warned that debt owed on the contracts was "crippling" hospitals.
Analysis of 107 PFI contracts for which full data was available found pre-tax profits of £831 million for the companies behind the deals , while £480 million had been paid out in dividends to their investors, the CHPI said.
The pre-tax profit margin on repayments from two NHS trusts, Peterborough and Stamford Hospitals and County Durham and Darlington, was 38% over six years.
And NHS repayments over the next five years will generate £873 million in pre-tax profits.
The health service has a total of 125 PFI schemes - an alternative to public borrowing for major building projects that see NHS trusts make annual repayments over the length of the contracts, which have an average term of 31 years.
Eight firms are equity owners of the bodies set up to manage 115 of them, with investment firms Semperian (24) and Innisfree (19) and Barclays (16) operating the most, according to the CHPI.
The report's authors concluded: "The Government should reconsider its use of the Private Finance Initiative and consider using public borrowing to fund new capital investment in hospitals.
"This is likely to be much cheaper and will mean that less money for patient care will be wasted in payments to shareholders, which is particularly important when the NHS is going through the most austere decade in its history."
Writing in the Guardian, Ms Creasy said: " If Theresa May is serious about taking on the unacceptable face of capitalism, she could save Britain a fortune if she goes after the legal loan sharks of the public sector.
"For decades, governments of both main parties have used them for the simple but ultimately short-sighted view that it keeps borrowing off the books - helping reduce the amount of debt the country appears to have, but at great longer term expense.
"It's now painfully clear that the intended benefits of private sector skills to help manage projects have been subsumed in the one-sided nature of these contracts, to devastating effect on budgets."
Health minister Philip Dunne MP said: " Of the 125 PFI contracts reviewed in this report, 118 were negotiated by the last Labour government, which saddled the NHS with a crippling £80 billion of debt and costs our hospitals nearly £2 billion a year to service.
"This Government has refused to sign up the NHS and taxpayers to such appalling deals like Labour did, and has instead committed to increase the NHS budget by at least £8 billion per annum in this parliament."