EC Harris welcomes white paper plan to scale back health sector PFIs

EC Harris has welcomed the government's white paper on reforming the NHS, issued last week. The planned reforms include cutting £3-5bn from PFI spending and overhauling the LIFT programme. Investment will move away from large acute hospitals towards more local facilities The white paper also proposes that 50 community hospitals be built, worth around £50m each.

Val Clinton, partner at EC Harris, said she approved of the proposals: "Services that are being run through hospitals could be provided locally by being moved from the acute sector to primary care centres, such as GP surgeries."

Clinton also backed plans in the white paper to use LIFT-style funding models, despite widespread criticism of LIFTs for taking too long to reach financial close and costing bidders as much as £500,000 each.

"The costs are higher than with other routes, such as PFI, at the earlier stage but this balances out later," she said, adding that while LIFT schemes took twice as long as PFI projects, the trade off was that several projects are carried out at once under LIFT arrangements.

Clinton said a major benefit of funding multiple schemes this way was that if only two out of three schemes were profitable, those two could support the building and running of the third scheme.

Lift costs are higher than with other routes, such as PFI, at the earlier stage but this balances out later

Val Clinton, partner, EC Harris

She added that LIFT companies were subject to a suitably "vigorous" selection process.

Clinton said it was hard to compare the PFI with LIFT companies within the healthcare sector since while a PFI funds the construction of a facility only, a LIFT company funds the building programme then goes on to run the facility.

EC Harris has doubled the turnover and staff of its healthcare arm in the past 12 months. The healthcare team is working on 190 schemes around the UK with a combined value of over £500m.

The arm now employs 11 people, five of which are in Birmingham, four in London, one in Leeds and one in Manchester. Clinton plans to recruit up to four further staff for the London and Birmingham offices. She also revealed plans to merge with a five-strong company in London specialising in private and acute sector whole life procurement and facilities management.