PFI contract reviews to save £26 million

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Plans to deliver £26 million savings across the 28 existing Private Finance Initiative (PFI) projects in NHS Scotland have been announced by Health Secretary Alex Neil today.

Today’s announcement is ‘the starting point’ of the Scottish Government’s drive to improve the cost effectiveness and transparency of PFI contracts.

The savings, which will be made over the remaining contract lifespans, will be put back into frontline services by the NHS.

They include a range of measures such as the use of LED lighting, which will alone save £56,000 a year through improved energy efficiency and reduced lifecycle maintenance costs.

Health boards will be supported to build on these saving by a national efficiency team, made up of finance and procurement experts.

The team will work with board to find new and innovative ways to save money and will drive these forward across the country.

Mr Neil said:

“Costly PFI contracts signed before 2007 have put considerable strain on the public finances in Scotland.

“That’s why we have ended use of PFI. Instead we have led the way in the UK by introducing the Non-Profit Distributing (NPD) model as a replacement for financing infrastructure.

“Unfortunately some health boards remain locked into long-term contracts with operators.

“That is why the Scottish Government is making every effort to ensure that taxpayers get full value for money by finding savings from PFI by tackling wasteful practice.

“We need to be tough with the PFI suppliers to deliver these savings, but we have a duty to the people of Scotland to do so. Our new programme has already identified £26 million in savings – but I determined this will simply be the starting point. Our new central team will be closely assessing contracts and ensuring we exploit every single avenue to save money.

“Not only will this protect the public purse, but it will also reduce costs so that we can continue to protect vital front line health services and deliver the best possible care for patients.”