Seven NHS trusts given cash to pay PFI hospital costs
By Richard Johnstone | 6
Seven NHS hospital trusts
are to be given a government bail-out of £1.5bn to meet payments due under
Private Finance Initiative contracts.
Health Secretary Andrew Lansley
announced that the trusts had demonstrated that they would not be able to meet
the annual payments without extra help.
The trusts, which include
hospitals in south London, Essex, Peterborough and St Helens, will be given the
support over the 25 years left of the contracts to ensure they remain
Lansley said the funding
would ensure the hospitals were able to maintain and improve the care they
Under the PFI schemes, which
were often used by the last Labour government, hospitals were constructed and
financed by private contractors. The trusts would then pay back the cost of the
hospitals, as well as maintenance charges, over a typical period of 30 years.
Last October the government reported on 22 NHS trusts experiencing financial
difficulties as a result of the PFI payments. The payments award was set up in
response but trusts had to meet four criteria to be eligible for the cash.
These include that their problems were exceptional and that they had a clear
plan to manage their resources in the future beyond the historic payments.
Lansley said that the
funding for the seven trusts that met the criteria would begin in April. The
financial support would be given in a transparent and open way and would
demonstrate clearly that the organisations would otherwise be financially
He added: ‘The NHS is
delivering great results for patients but we know that a small number of NHS trusts
with PFI arrangements have historic problems relating to these arrangements
that make it very difficult for them to manage financially.
‘Today’s announcement is the
latest stage in a programme of work we began in 2010 to identify and tackle
financial problems at local level in the NHS. In the past, local trusts have
received extra funding on the quiet in order to avoid embarrassment. We have
already signalled that we are determined to end these backroom deals by
bringing greater transparency and openness to the process.’
The trusts that qualified
for funding are: Barking, Havering & Redbridge NHS Trust; Dartford &
Gravesham NHS Trust; Maidstone & Tunbridge Wells NHS Trust; North Cumbria
NHS Trust; Peterborough & Stamford Hospitals NHS Foundation Trust; South
London Healthcare NHS Trust; and St Helens &Knowsley NHS Trust.
Last year the government launched a
pilot to examine ways of cutting the costs of the PFI schemes. One of the sites
included was the Queen’s Hospital in Romford, part of the Barking, Havering &