Labor MPs Demand Reeves Halt NHS Private Finance Plans Amid PFI Concerns
london – September 24, 2025 – A group of labour MPs are urging Shadow Chancellor Rachel Reeves to abandon plans to utilize private finance for new NHS facilities, voicing fears of a repeat of the costly and controversial Private Finance Initiative (PFI) schemes. The call comes as its revealed firms have already been handed £6 million to advise on using private funds for NHS clinics, according to reporting by The Guardian.
The MPs’ concerns center on government exploration of public-private partnerships (PPPs) for funding the construction of NHS facilities, including neighbourhood health centres (NHCs), as outlined in the UK infrastructure strategy and the 10-year plan for health. Critics argue that previous use of private finance, even on smaller projects, has proven to be worse value for taxpayers than larger-scale PFI deals, and NHCs are likely to fall into that category.
The PFI model,widely used between the 1990s and 2010s,allowed private companies to finance and build public sector infrastructure,with the public sector then paying them back over long periods. While intended to bypass upfront costs, PFI schemes ofen resulted in significantly higher overall costs due to interest payments and inflexible contracts.
More than 50 academics,including Labour peer and accountancy expert prem Sikka,have already written to the Chancellor urging a halt to the proposals,advocating for funding public services thru direct taxation or borrowing. This stance aligns with the Labour party’s manifesto commitment from the recent general election, stating the NHS “will always be publicly owned and publicly funded.”
Shadow Health Secretary Wes Streeting has attempted to reassure MPs that any new private finance initiatives would be limited, targeted, and designed to avoid the pitfalls of PFI. Though, concerns remain about the potential for long-term financial burdens and reduced public control.
A government spokesperson stated the administration is “steadfast to shift health out of hospitals and into the community” and is exploring PPP models ”in very limited circumstances where they could represent value for money,” especially for primary and community health infrastructure and decarbonization projects. They added that future models would “build on lessons learned from past and current models.”
