The Royal Infirmary of Edinburgh: a case study on the workings of the Private Finance Initiative

Abstract

An examination of documents released under FOI legislation relating to the contract for a UK hospital PFI project enables a large number of problems to be identified in the procedures which led to the PFI contract. These problems relate to the nature of the risk transferred and to the assumptions made in assessing value for money and affordability. The authors suggest there is a need for much better training of those involved in PFI bids, and much more effective central scrutiny of deals as they are being struck to prevent further poor value PFI contracts. The analysis should therefore be of use to public sector bodies and researchers appraising future contracts. The findings of this research have wider implications than in the field of PFI.

Acknowledgements

Our thanks are due to Professor Allyson Pollock of the Centre for International Public Health Policy at the University of Edinburgh and to Howard Mellett, Professor in Accounting, Cardiff Business School, for their comments on the article in its draft form.

Notes

* At the time when negotiations for the NRIE were proceeding, the responsible government department was the Scottish Office, the department of the secretary of state for Scotland. The body commissioning the hospital was the Royal Infirmary of Edinburgh NHS Trust, now part of NHS Lothian.

Additional information

Notes on contributors

Margaret Cuthbert

Margaret Cuthbert is a member of the Public Interest Research Network at the University of Strathclyde.

Jim Cuthbert

Jim Cuthbert is a member of the Public Interest Research Network at the University of Strathclyde.