The government's LIFT programme was set up five years ago to help him. In fact it's made things worse. So how has LIFT gone so wrong?

This doctor's prefab surgery has no heating or air-conditioning. Recently, he had to hire workmen to clear away the animal faeces and rotting rodent carcasses beneath it.

Dr S Fox

Dr S Fox

Our taxi driver, who has been talking non-stop during the seven-mile drive from Wigan to Leigh, is stunned into silence when we pull up outside Foxleigh surgery. He looks from the building down to his map, but the sign above the door, though faded to a sickly green, clearly reads "Dr S Fox". The surgery is no bigger than a large site toilet and not much sturdier; in fact, the building resembles a grey oblong Wendy-house. It is surrounded by empty bottles of Vodka Ice, flattened Ribena cartons and cigarette packets. Viewed from another angle, it's a persuasive example of how a government initiative is failing to improve healthcare premises.

Dr Stephen Fox has been practising medicine out of this temporary building for almost 11 years. When he and his staff moved into "the shed" in 1995, he was told new premises would be available in 18 months. "We've heard every excuse under the sun," he says. "The primary care trust has such a tight budget that things keep being pushed back and back."

There was a glimmer of hope in 2001, when a flagship government initiative was launched. The PFI-style scheme, called LIFT, was designed to help PCTs to modernise clinics and GPs' surgeries. The idea was that they apply for start-up cash from a pot of £208m and then raise the remaining 80% from private investors. The initiative is like the hospital PFI programme on a smaller scale, and, like the hospital programme, it has attracted a lot of criticism.

Fox says: "LIFT has been totally totally useless. The system is unclear and everything takes so long." Given the state of his building, which is 15 m2 and has to accommodate himself, four part-time receptionists, two nurses and a chiropodist, it is not surprising that he is unimpressed. Recently, he had to hire a team of workmen to clear away the muck and debris underneath the surgery. He says action had to be taken because the stench of animal faeces and rotting rodent carcasses became unbearable. There is no central heating or air-conditioning. In winter, electric heaters have to be rotated around the consulting rooms and in the summer they are swapped for fans. One room is so small that for two people to sit in it, the door has to be kept open so that one can stretch their legs out into the corridor.

Given that Fox's surgery is such an obvious case for treatment, why hasn't LIFT supplied him with a shiny modern clinic in a smart new mixed-use development? The main problem is, as Fox says, that few people understand how the system works, much less how to work it for their own advantage. Nigel Watson is chairman of the Wessex Local Medial Committee. It is his job to advise doctors on the best way of exploiting LIFT. He describes the scheme as "a complete mess". Developers and doctors find procurement bureaucratic, expensive, lengthy and confusing. And because the process is so unwieldy, contractors are unwilling to risk their bid costs, particularly when what's at stake is a surgery the size of Fox's.

But problem goes beyond the procurement process. There is evidence that LIFT may have actually decreased Fox's chances of getting his new surgery. Fox says: "The PCT has got so little money as the government has channelled it all into LIFT, and I've given up on LIFT. It was set up to help people exactly like me but it has caused me more grief instead. It has absorbed all the money for development in this area and it has been almost impossible to get the new building."

The eye test chart

The eye test chart

Poor value for money

LIFT has been totally useless. The system is unclear and everything takes so long

Dr Stephen Fox

Serious problems have even emerged in supposedly successful LIFT projects. Dr Bhupinder Kohli, a GP in Newham, east London, was a fervent supporter of LIFT and his practice was the first to undergo the treatment in January 2001. Kohli was delighted with his building, until he found out what it was going to cost him. He calculated that a normal build would have cost £8 per patient, compared with £43 under LIFT. "The LIFT buildings are the most expensive in our local authority area per square metre," he says.

Kohli has also realised that the hidden costs of LIFT will haunt him for the duration of the 25-year lease. As the LIFT company has a monopoly over the upkeep of the building, it brings in the labour to carry out maintenance work and alterations. "I have been told that to get anyone in to do skilled labour will cost us £30 an hour plus VAT," says Kohli, adding that this is far more than he would pay if he procured the work himself. "My concern is that our lease lasts for 25 years and no building will survive that long without needing alteration. It's going to be costly and although I don't know how I'd have done things differently, I do regret doing them under LIFT."

The concerns over LIFT's value for money were exacerbated at a House of Commons public accounts committee meeting last November when Peter Coates, head of the Department of Health's finance division, confessed that he couldn't say for sure that the initiative was a good deal for taxpayers. When the committee chairman asked him to confirm that taxpayers were getting a good deal when private investors come away from each project with a 60% return, Coates admitted: "It is hard to defend such large returns."

The makeshift waiting room

The makeshift waiting room

LIFT's lack of bidders

LIFT's soaring costs are not just putting off GPs. As noted opposite, construction companies considering whether to invest in an NHS LIFT building are faced with the risk of losing up to £500,000 if their bid fails, and tying up management resources for up to 18 months while the candidates are longlisted, shortlisted and shortlisted again by the PCT.

This is a risk that most companies are not prepared to take; of course, small firms that do not have the funds to bid are non starters, no matter how potentially lucrative the final project. This means that LIFT has made the construction market less efficient by divorcing the work from a large number of small firms that used to regard it as their bread and butter.

Surgery Developments, a company set up to provide leasehold surgeries for GPs, is just one of many niche developers that have suffered at the hands of LIFT. Director Barrie Sheaff explains the negative impact the scheme has had on its business. "We are too small to bid for LIFT projects, so there is less work for us out there as PCTs can't really afford to fund builds outside of LIFT."

Will Durnham, director of construction company CMS Bath, says bidding for a LIFT scheme can have a big effect on a company's accounts. "We bid for a LIFT project and lost and the financial loss was huge. You need to put a lot of thought into bidding when the stakes are so high, and make sure you can afford it - whatever the outcome."

I don’t know how I’d have done things differently, but I regret doing them under LIFT

Dr Bhupinder Kohli

Much larger firms have also got burnt. John Frankiewicz, operating officer at Willmott Dixon, says bidding for LIFT projects has cost the company hundreds of thousands of pounds each time. And even successful bidders think the process needs to be changed. Alan Hope, the chief executive of contractor Midas, won a LIFT scheme in Plymouth; however, he says there is definite room for improvement. "It was certainly more expensive to bid for than a normal construction project and it would be better if the private sector didn't have to invest so much at risk before they know if they have even got a project."

Critics say introducing simple changes to LIFT would help to reel in at least some of the discouraged GPs and developers. Richard Nugent, president of the Institute of Healthcare, Energy and Estate Management and a former architect, says the procurement process could be speeded up if the PCTs were better informed. "They have not been equipped to act as proper informed clients. Ultimately, this is still a contractor-client relationship, and so far that relationship is not being effectively managed," he says.

Not enough money in the pot

But educating PCTs on PFI and their role as clients will cost money that is not available. The fundamental problem with LIFT is that the government has not invested enough money in it. Mike Nightingale, chairman of Nightingale Associates, is a LIFT supporter, but even he agrees that this is a fair criticism. "The procurement process is very complex and PCTs need more guidance," he says. "There is not enough money, support or management. Central government ought to realise how complex the process is and see that PCTs would benefit from more financial help."

Although a separate £108m development fund is given to regional health authorities, this is spread out over a huge geographical area and most PCTs never see a penny. Health experts such as Dr Laurence Buckman, deputy chair of the General Medical Committee, say it is unacceptable that only 120 out of the 306 PCTs in the UK have benefited from the £208m LIFT allowance.

Buckman says: "LIFT needs more money. Once funds are divvied out among PCTs there isn't enough to go round." Given the limited funds available to PCTs it makes sense for them to focus on practices with more staff and patients to try to maximise the amount of people who benefit from the LIFT allowance. The trouble is, the smaller surgeries and developers are losing out.

Fox has just managed to arrange for his surgery to be rebuilt without using LIFT and says it was an uphill struggle to get any funding. The situation got so desperate in early 2004 that Fox circulated a petition, calling for money to be made available for the build, which was signed by more that 900 patients and Leigh residents. He teamed up with his local Labour MP, Andy Burnham, and together they presented the petition to the chief executive of Ashton, Leigh and Wigan PCT.

His efforts were rewarded in mid-2005, when the PCT agreed to take on the head lease of Fox's new building. The lease was signed just before Christmas and the first bricks are now in place on the site. The work is going ahead only because Fox went directly to a local developer, Charter Medical. Pete Wilson, head of contractor services at the Ashton PCT, says although he is unable to divulge exactly how much it will cost them to pay Fox's rent, it is a significant amount of money. But he adds that Fox's new building is a one-off, and unless more money is made available by the government no other surgeries in the area will receive this kind of funding: "I can't see that happening again in the foreseeable future," he says.

Sitting in his minuscule consulting room, Fox says LIFT needs to "stop messing about" as it is severely affecting GPs across the country. "The whole situation is ridiculous. I have been let down by LIFT. Why are GPs always given such a raw end of the deal when 90% of all patient contact happens in primary care?"

Ominously, the government's flagship education initiative, Building Schools for the Future, stems from the same model as LIFT. If history goes on repeating itself, it will be at the taxpayers' expense.

LIFT: How it should work, and why it doesn’t

What is NHS LIFT?
LIFT was introduced in 2001. The scheme was set up to identify the worst healthcare premises in Britain and rebuild or renovate them.But the initiative is not universal and a number of surgeries across the UK, particularly the smaller ones, are not receiving the help and funding that they need.

How does it work?
LIFT is effectively PFI for doctors. The government has put £208m into the scheme and expects primary care trusts to raise the remaining £800m from private investors – usually construction companies supported by banks. GPs have to relinquish control over their premises and enter into a 25-year contract with the investors.

How do private investors bid for a LIFT project?
The primary care trust receives funding from the government and puts together an advert for the proposed schemes in their area. The advert is placed in the European Union’s Official Journal. PCTs can expect up to 50 or 60 responses and the negotiation and procurement process will then take more than 18 months as bidders are longlisted and shortlisted. Once a final decision is made, the winning bidder will be officially incorporated into what is known as a LIFT company. The private sector partner will have a 60% stake in the company, the PCT will own 20% and the government will own the remaining 20%.

If LIFT is so unwieldy, why don’t GPs use other methods to develop their buildings?
They used to. Before the new GP contract came into force two years ago, GPs would pay for the construction or alteration of their surgeries by taking out a bank loan. There was a clause in the old contract that meant the NHS had to pay GPs what was called “notional rent”. GPs who owned their own premises were reimbursed what they would be paying if they were renting NHS-owned premises and GPs would use these notional rent payments to pay off their bank loans. When the new contract came in, this clause was changed and the rent payments are no longer guaranteed. GPs can now not guarantee they will be able to pay off their bank loans.

Can GPs just approach developers directly and cut LIFT out?
With difficulty. LIFT has absorbed most of the cash allocated to health premises development and without funding from the PCT or a bank loan, GPs are finding it almost impossible to work around the situation.