Page last updated at 15:51 GMT, Monday, 1 June 2009 16:51 UK

PFI hospital 'costing 20m more'

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Hospital's 20m extra cost claim

A Norfolk hospital is costing the taxpayer nearly £20m a year more than it should, a report has said.

The Norfolk and Norwich University Hospital was built under the private finance initiative (PFI) - which brings private money to public projects.

The report says it would be cheaper in the long run to bring it back into public ownership.

The hospital disputes some of the figures in the report and says there is nothing new in the research.

The report by Dr Chris Edwards, a fellow of the University of East Anglia, says the hospital, which opened in 2001, is currently due to cost more than £800m in rent to the end of the contract in 2037.

'Savings possible'

The hospital could save £19m a year if the private owners were bought off, it says.

Dr Edwards said: "Taxpayers could save £217 million if the PFI at the Norfolk and Norwich University Hospital (NNUH) is bought out. It has been an incredibly profligate way of funding an undersized hospital at great cost to the public, providing massive, excessive profit to the private sector.

"Buying a hospital on PFI is like buying a house on your credit card. There is every reason to suppose that the NNUH is not unique, given that the private sector's cost of capital is double that of the public sector."

'Nothing new'

A spokesman for the hospital said: "The research is unfortunately factually inaccurate in a number of regards and covers issues that have already been thoroughly scrutinised time and time again.

"This research adds nothing new. The option of buying out the PFI scheme is simply not feasible.

"Given the sums of money the government is committing to supporting the wider economy and banking sector it is extremely unlikely that the money is there to pay off any PFI scheme."

He added: "NNUH is delivering very high standards of healthcare for the public locally."



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