PFI hospital provides apt setting for Labour launch

So Gordon Brown chose to host his manifesto launch at a brand new hospital. A tangible exposition of the difference 13 years of New Labour has made to the country.

A hospital that you haven’t yet paid for, but your grandchildren most certainly will.

The new Queen Elizabeth Hospital is part of the University Hospitals Birmingham NHS Foundation Trust, and its space age facility will open in 64 days time, around the time when George Osborne hopes to be delivering his ’emergency Budget’.

There will be thirty theatres, the largest critical care unit in Europe, and a helipad for the war-wounded. A monument to New Labour, possibly opened in a new Conservative era.

But it’s also the second largest PFI hospital.

That means a hospital that is worth £627m will cost a stream of payments starting at £47m this financial year, going up in cash terms every year for 35 years stretching all the way to the last payment of £108.8m in 2044/45. (Coincidentally the year that I might be able to collect my pension, aged 68).

A total of £2.6bn in cash terms over the next four decades. A piece of public investment that is clearly indicated as ‘off balance sheet’ in the official Treasury spreadsheet.

Not one penny of direct exchequer funding has gone into this hospital so far (bar project costs).

This is the Private Finance Initiative, conceived on the basis that the private sector could borrow more cheaply than the public sector (untrue).

It was propagated as a means of getting round the tough limits on investment spending in 1998/99 with basically Enronesque off-balance sheet borrowing.

And so it was hugely expanded, helped along by the likes of Sir Peter Gershon (Britain’s foremost adviser on public sector waste, now responsible for two of the four pages sustaining George Osborne’s fiscal projections) to the point where in the NHS alone the Liberal Democrats received a Parliamentary answer showing the NHS is facing a £63bn cash bill in the coming decades for PFI hospitals worth £11bn.

So the reality of the Birmingham super hospital where Gordon Brown chose to seek his election, is yes, it is a rather apt symbol of New Labour’s 13-year tenure.

But not necessarily in the way the prime minister means.