North East taxpayers facing a £4.3bn hospital bill

Aug 14 2010 by William Green, The Journal

TAXPAYERS face a £4.3bn bill for North East hospitals built under deals with private companies.

NHS trusts are paying eye-watering sums under the Private Finance Initiative (PFI), according to Government figures.

Under PFI, private companies win contracts to build and maintain new hospitals with the NHS paying off the “mortgage” over around 30 years. The value of the 12 PFI projects in the region has been estimated at £818m, according to Treasury figures covering schemes signed off up until February this year.

Hexham General Hospital is one of those built under the scheme. It is valued at £54m but total PFI payments amount to £252.55m.

Retired Northumberland GP Steven Ford, who stood as a candidate for Hexham in the last general election, said: “We have all been robbed if we end up paying six times the assets value. We have been done.

“Basically, it is an absolute political Arthur Daley job. The Labour Government put most of it in place and should have seen it coming, but probably didn’t have the competence. But don’t forget that PFI is a Conservative idea.”

Paul Dunn, director of finance at Northumbria Healthcare NHS Foundation Trust, said: “Hexham District General Hospital passed the national guidance for value for money for Private Finance Initiatives before the contract was agreed.

“The costs include the full life-cycle costs of the building and its entire maintenance, so that it will be delivered back to Trust ownership in pristine condition at the end of the 30-year contract.

“The contract does allow for the debt to be refinanced and as and when the economic climate and market conditions allow we will seek to refinance in conjunction with the PFI provider.”