Funding deal blamed for hospital cuts and closures

The Government's private finance initiative has led to widespread hospital bed closures and cuts in NHS services, the first academic study on the programme has found. Researchers said there was compelling evidence that the costs of PFI had contributed to falls in bed numbers.

A study published in the British Medical Journal found the project to redevelop the Edinburgh Royal Infirmary had failed to increase efficiency and led to a 24 per cent cut in beds in the Lothian area.

By 2001, admission rates in acute, surgical and intensive care specialties in Lothian had fallen far below those in the rest of Scotland, while the number of delays in sending patients home had risen 15 per cent above the Scottish average. Researchers said the costs of the PFI deal had stalled efforts to improve community care and led to patients being admitted later and staying in hospital longer.

"The effect on clinical activity has been a steeper decline in the number of acute beds and rates of admission in Lothian hospitals compared with the rest of Scotland," they said.

The Department of Health said the findings were non-sense and the Government was reversing a long- term decline in NHS bed numbers. A spokesman said the report was "based on a complete misunderstanding of the way the NHS works. Decisions about bed numbers are made before any decisions about how building a new hospital should be funded. The two things have no relationship."

But one of the authors, Professor Allyson Pollock, of University College London, said the study had been extensively reviewed and was based on official government figures. "This shows very clearly that PFI has a completely independent effect on bed closures because of its high costs," she said.

A spokeswoman for the public service Unison called for an independent inquiry into the effects of PFI.