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Last Updated: Tuesday, 11 September 2007, 16:23 GMT 17:23 UK
Hospital PFI costs 'set to soar'
building work
The NHS pays the building contractor over a 30-year period
The cost of private finance schemes to the NHS will spiral in the coming years, becoming an "albatross" around the NHS's neck, a study says.

The Edinburgh University report found when all 126 schemes are in operation by 2014 the repayments will rise to 2.3bn from the current 470m.

Researchers added the cost of projects had already started causing problems.

PFI projects have proved controversial as they effectively saddle the NHS with a mortgage to pay over 30 years or so.

As the PFI programme expands, the problems will become even more acute
Mark Hellowell, of Edinburgh University

Under the agreements, the private sector designs, builds and finances, while the NHS repay the costs plus interest over the following decades.

It comes at a time when the government is trying to move care out of hospitals and into the community by encouraging GPs to do work traditionally taken on by hospitals, such as diabetes care.

The report said there were 53 schemes in 2005-6 which cost the NHS 470m, but if all the planned 126 projects are given the go-ahead costs will top 2.3bn in seven years time.

Researchers said the NHS trusts with large schemes of more than 50m were confronted with payments which were more than their budgets earmarked for buildings.

Funds

The average shortfall was 4.4% and the researchers said trusts would end up dipping into their funds for services to cover this, compromising care.

Lead author Mark Hellowell, lead author of the research, said: "The payments to PFI consortia are an albatross for the NHS and are associated with service cuts.

"As the PFI programme expands, the problems will become even more acute."

The report highlighted the problems in south east London where local heath officials have highlighted PFI costs as the main contributor to debts of 180m last year at Bromley and Queen Elizabeth trusts.




SEE ALSO
PFI schemes 'to cost NHS 53bn'
27 Oct 06 |  Health
NHS cash 'wasted by PFI delays'
22 Apr 06 |  Health

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