Private hospital funding risky: Labour

NDHB chief executive Nick Chamberlain. Photo / Northern Advocate

The Labour Party has slammed plans by Northland District Health Board to look at private funding for a new multi-million dollar building at Whangarei Hospital, saying taxpayers will be left with a lingering debt if the deal goes sour.

But the DHB says it won't go into any such deal if there was not a significant saving or there is any financial risk to the organisation.

The health board is exploring plans to build an office block, possibly up to three storeys high and costing less than $10 million, to bring the 300 staff it has working at seven different sites around Whangarei onto the main hospital campus.

NDHB chief executive Nick Chamberlain said the organisation leases 4700m2 of mainly office space at seven sites in Whangarei at a considerable cost. Various options were available in terms of how they finance a new building. These include: entering into a public private partnership (PPP) deal - where a private sector partner funds and builds and the DHB is the tenant - and sale and lease back where the DHB pays for construction, sells the building to a third party and remains as the tenant.

But Labour's Health spokeswoman Maryan Street said she was opposed to any PPP or sale and lease back arrangements for hospitals and would get rid of any such deals, should Labour be elected into Government.

"It's red flags up in the Labour Party when PPPs are mentioned in the health sector, largely because of the experience in the UK where these things have been disastrous," Ms Street said.

"Basically when it's been done in the UK health system the health authority is the one that ends up with the lingering debt." She said another concern would be that the private partner may insist on having a certain amount of access to the building, thereby limiting the amount of time it could be used by the DHB.

Ms Street said a private partner would not get involved for altruistic reasons, but to make a profit. She raised the possibility that any public land that could be alienated through a sale/lease agreement could be subject to Treaty of Waitangi issues.

But Mr Chamberlain said the PPP would preserve capital for clinical services, and result in a lease arrangement of office space which is no different to the DHB leasing current space, except that it would achieve a significant saving in current office lease costs.