NHS trusts spent close to a half a billion pounds on interest charges from private companies for private finance initiative (PFI) contracts last year – equivalent to the salaries of 15,000 newly qualified nurses. Hospital groups spent £2.3bn on legacy PFI projects in 2020-21, of which just under £1bn went on costs for essential services such as cleaning and maintenance. A third of the remaining PFI spend – £457m – went purely on paying off interest charges. PFI is a method of funding infrastructure projects such as NHS hospitals, which uses private funding to pay for upfront costs such as design, construction and maintenance. These costs are paid back over many years to the companies that financed the project – often banks and construction firms. Hospital trusts pay firms each year in a unitary payment, which is written into the contract. The government decided to stop any future PFI deals in 2018, after the collapse of Carillion, which was the main provider for two major hospital PFI contracts. The then chancellor, Philip Hammond, said: “I have never signed off on a PFI contract as chancellor, and I can confirm today that I never will.” A total of 101 NHS trusts are still on the hook for just under £50bn in future unitary payments, despite severe upcoming budgetary challenges, according to a Guardian analysis of hospital trust accounts. The figures reveal that four trusts saw more than half of their total PFI unitary payment going purely on interest to private companies. About 58.3% of all the money that Mersey Care spent on PFI was interest in 2020-21. That was followed by Northumbria healthcare (53.4%), Alder Hey children’s trust (52.9%) and Sussex Partnership (51%). David Rowland, the director of the Centre for Health and the Public Interest, said: “For those trusts with a PFI hospital, the high costs of these schemes will continue to be a major drain on their budgets. This is at a time when they are making planned cuts of £12bn a year and expect to have to meet an additional £6bn of costs next year due to inflation. “Despite the pressure on NHS trusts to make cuts, under the 25-year-long contract, PFI companies and their shareholders have been given a watertight guarantee that they will receive payments and a return on their investment. In short, expenditure on staff, equipment and other capital projects can be cut by a trust, but not their PFI payments. “In addition, under the PFI contracts the NHS trusts, not the private companies, bear the risk of high inflation – which means that the payments to PFI companies may increase substantially as the retail price index rises. The rise in inflation will consequently not dent substantially, if at all, the profits of PFI companies.” Dr John Lister, a health policy academic and member of Keep Our NHS Public, also warned of the consequences of inflation for PFI payments. He said: “The NHS is at the peak of payments for PFI hospitals in the next couple of years, with some contracts running through to 2048. But the problem this year and next is that the rapid increase in inflation will further increase the cost of unitary charge payments which are linked to RPI. “Some trusts are already looking at increases of millions on their annual payments, which will continue to the end of the contract, in addition to soaring energy prices, drug costs and other non-pay items.”