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Letter: Funding hospitals

Sir: In reporting the Government's announcement of six new hospitals with Private Finance Initiative funding worth pounds 650m (8 July), Jeremy Laurance repeated some common misconceptions.

It is not true that PFI schemes will cost more than publicly funded hospitals. Well-established techniques of financial appraisal are used to ensure that schemes are only approved if they offer value for money. It does not make sense to compare, as some commentators do, the initial capital cost of the publicly funded scheme with the total cost of a PFI scheme without taking into account the fact that the PFI contract will include the costs of maintenance and essential services.

Nor is there any evidence that PFI schemes must lead to reduced bed numbers. The bed numbers in almost all of the first 15 major PFI schemes prioritised since May 1997 will be the same as if the project had been publicly funded. On occasion, any new hospital may have fewer beds than its predecessor, simply reflecting changing clinical needs or the rationalisation of outdated or multi-site hospitals. This is not driven by PFI.

PFI has played a crucial role in the development of the largest ever hospital building programme. This government has made it work and at the same time is introducing important new safeguards for staff. It would be a shame if a flawed analysis of its operation cast doubts on its value.