Worcester PFI report breathtakingly wrong

1 Jun 00
Worcestershire Health Authority has slammed an independent report into its Private Finance Initiative hospital project as 'breathtakingly inaccurate'.

02 June 2000

The authority accused local campaigners of attempting to 'scupper' the construction of a new infirmary in Worcester following claims that the cost of the project had spiralled out of control and would lead to cuts in NHS provision in the county (Public Finance, May 26–June 1).

Mike Ridley, the authority's director of finance and commissioning, said the report, compiled by researchers from University College London, was based on out-of-date and inaccurate information. He maintained that expenditure on the project had not escalated, although he conceded that the addition of 84 extra beds had added £13m to the bill.

Ridley said the final cost of the hospital, due to open in two years, will be between £90m and £95m. This compares with the UCL researchers' estimate that the bill for the scheme has risen from £49m in 1996 to £108m in 1999, an increase of 118%.

'We never considered that the PFI scheme would cost £50m,' Ridley told Public Finance. 'As in all PFI schemes, inflation, fees, equipment and financing need to be taken into consideration, plus the extra beds. The authors did not compare like with like.'

He also rejected local campaigners claims that the 'escalating costs' of the PFI were behind the closure of acute services at the Kidderminster hospital which, according to the report, will more than halve bed numbers in the county over the next two years. 'We are looking at a reduction in beds of between 10% and 20%, but we will be increasing investment in intermediate care. The important thing is that it will be a package,' Ridley said.

He added that the hospital's £15m deficit, also said to be adding to the PFI crisis, had now been cleared as a result of cost savings and additional government finance.

But Professor Allyson Pollock, co-author of the report, said the authority had still failed to answer the bigger question – how it was funding the 'major cost escalation' of the PFI project.

'The real story is that the authority doesn't have the income to pay for the new hospital,' she said. 'They have already taken out 200 beds from the Kidderminster hospital to help fund it, but there is still an affordability gap and for fewer services. They have also provided no information on how they will fund these extra intermediate care services.'

The local campaigners are to lobby the Commons over the bed closures at a national press launch of the report on June 6.


Did you enjoy this article?