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Last Updated: Friday, 20 July 2007, 19:11 GMT 20:11 UK
Hospitals scrap 711m revamp plan
Leicester Royal Infirmary
The project aimed to refurbish many of the city's hospital buildings
The biggest hospital building project outside London has been scrapped due to spiralling costs.

The University Hospitals of Leicester Trust (UHL) has pulled the plug on its Private Finance Initiative (PFI) after a nine-week review of the project.

The trust had planned to spend 711m developing three sites in Leicester but the review showed costs would increase to an unaffordable 921m.

A total of 23m had already been spent preparing for the PFI scheme.

'Crunch point'

"The cost increase after the agreement reached last summer really brought the scheme to a crunch point," trust chief executive Peter Reading said.

"Seven hundred and eleven million pounds had been the level set at which the project was best value for taxpayers' money.

(This plan) was going to be the greatest thing in the world
Leicester East MP Keith Vaz

"Another 210m which was required to deliver the specified scheme meant this was no longer the case."

Spiralling construction costs linked to the refurbishment of many of Leicester's existing hospital buildings caused the project to become unworkable.

Leicester East MP Keith Vaz, who is calling for an inquiry into the decision to scrap the scheme, said the cancellation was disappointing.

"Someone has to take responsibility and it rests with the people who we pay vast amounts of money to to administer our health service.

"(This plan) was going to be the greatest thing in the world and now they tell us the figures just don't add up."

'Hugely expensive'

The trust originally outlined plans to revamp the Leicester General, the Royal Infirmary and the Glenfield with money from a PFI seven years ago.

"To commit ourselves now to a 30-year contract at 20m a year more than we can afford would mean we wouldn't be able to do other things," said Mr Reading.

But he added that the trust was still committed to investing in Leicester's hospitals.

Unison spokesman Andy Belfield said: "All of the PFI projects are like buying your house on a credit card - they are hugely expensive. They are a huge waste of money."

Zufar Haq, of Leicester Patients' Group, said: "It is very miserable news - after seven years it has been dropped. Seven years of promises."

But he added it was "a brave decision" to drop the plans because it "would have burdened the citizens with a huge debt".

Reaction to the decision to shelve the hospitals project

Developers have amassed substantial costs working on the project

Hospitals plans slashed by 160m
10 May 06 |  Leicestershire
Bailiffs collect NHS trust debts
06 Feb 06 |  Leicestershire
Trusts battle to lower 50m debt
27 Jan 06 |  Lincolnshire

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