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Hospitals 'Face Collapse Over PFIs', Says Andrew Lansley

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ANDREW LANSLEY
PA

More than 60 hospitals cannot afford the rising cost of private finance initiative schemes and are being left "on the brink of financial collapse", according to the Health Secretary.


Andrew Lansley said he has been contacted by 22 NHS trusts which claim their "clinical and financial stability" is at risk because of the spiralling cost of PFI contracts.


Under the schemes, which were expanded by the previous Labour government, private capital is used to fund public infrastructure projects such as schools and hospitals.


The public sector body then repays the private firm with interest over an agreed time period and in some cases the costs of maintaining the buildings.


However, the trusts say they are now unable to pay for their schemes - believed to be worth more than £5.4 billion in total - because the payments of their "NHS mortgages" have inflated during the recession.


Mr Lansley told The Daily Telegraph: "Over the last year, we've been working to expose the mess Labour left us with, and the truth is that some hospitals have been landed with PFI deals they simply cannot afford.


He told BBC Radio 4's Today programme that hospitals would not be allowed to collapse financially, he said, adding that the 22 trusts affected had a PFI commitment for £5.5 billion.


"My point is that we have looked since the election and are working together with individual trusts to arrive at a place where they are financially, and in terms of the quality of their services, sustainable for the future. We can only do that if we work closely with them."


The Department of Health said there are £12.6 billion of PFI contracts in the NHS, with some trusts paying off the scheme until 2050. It added that the Government was making an independent assessment of PFI schemes.


The 22 trusts whose PFI contracts are said to be putting them at financial risk have been identified as: St Helens and Knowsley, South London Healthcare, University Hospitals Coventry and Warwickshire, Wye Valley, Barking, Havering and Redbridge, Worcester Acute Hospitals, Oxford Radcliffe and NOC, Barts and the London, University Hospitals of North Staffordshire, Dartford and Gravesham, North Cumbria University Hospitals, Portsmouth Hospitals, Buckinghamshire Healthcare, West Middlesex University Hospital, Mid Yorkshire Hospitals, Walsall Hospitals, North Middlesex, North Bristol, Mid Essex Hospital, Maidstone and Tunbridge Wells, Sandwell and West Birmingham, Royal National Orthopaedic Hospital

Around the Web

Private finance initiative - Wikipedia, the free encyclopedia

PFI costs 'put hospitals at risk'