QEH Hospital - a victim of privatisation

THE DIRE financial crisis facing Woolwich's Queen Elizabeth Hospital (QEH) hit the national press headlines this week. Although "well managed" according to the guardian's sources the hospital is facing the biggest deficit of any NHS trust in England.

Roger Keyse

But the reasons for the hospital's difficulties aren't hard to find. The QEH was one of the first hospitals built using funds from a Private Finance Initiative (PFI) privatisation scheme - its doors opened in 2001. So it's locked into a 'deal' that costs it about Ł9 million more to run each year than if it had been built using money borrowed from the government!

QEH's financial position is also sharply worsened by the government's 'resource and accounting budgeting' system (RAB). Applying this bizarre and punitive set of rules massively added to the hospital's official deficit.

In the grip of this PFI and RAB straitjacket QEH's financial situation deteriorated rapidly. A deficit of Ł37 million is expected in 2006/7, its accumulated deficit is due to reach Ł65 million by the year end. Its Chief Executive concedes that in commercial terms the hospital is insolvent.

QEH's top brass acknowledge that government policies caused its deficits, nevertheless they pushed ahead with damaging cuts to try to balance the books. Ł11 million was slashed from this year's budget - 153 posts were axed and 29 staff lost their jobs. And now the trust chairman says the hospital faces another 'extraordinarily hard' financial year ahead. Further cuts of over Ł6 million are already planned.

Local people are angry at these attacks and at the news that a so-called Independent Sector Treatment Centre is being proposed in this area. This could further destabilise and undermine the QEH's financial position whilst making the private contractor involved millions of pounds in profits.

But the local campaign to defend the NHS is growing. A recent well-attended public meeting organised by Greenwich Keep Our NHS Public unanimously demanded the government fully fund the QEH's financial deficits.

Everyone saw that the NHS is under major attack just about everywhere - so the meeting also unanimously backed the call for a national demonstration, preferably on 3 March, and pledged to work for the maximum possible turnout from the area.

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In The Socialist 15 December 2006:

NHS Crisis: Turn anger into action