More than 60 hospitals cannot afford the rising cost of private finance initiative schemes and are being left "on the brink of financial collapse", according to the Health Secretary.







Andrew Lansley said he has been contacted by 22 NHS trusts which claim their "clinical and financial stability" is at risk because of the spiralling cost of PFI contracts.



Under the schemes, which were expanded by the previous Labour government, private capital is used to fund public infrastructure projects such as schools and hospitals.



The public sector body then repays the private firm with interest over an agreed time period and in some cases the costs of maintaining the buildings.



However, the trusts say they are now unable to pay for their schemes - believed to be worth more than £5.4 billion in total - because the payments of their "NHS mortgages" have inflated during the recession.



Mr Lansley told The Daily Telegraph: "Over the last year, we've been working to expose the mess Labour left us with, and the truth is that some hospitals have been landed with PFI deals they simply cannot afford.



"Like the economy, Labour has brought some parts of the NHS to the brink of financial collapse. Tough solutions may be needed for these problems, but we'll help the NHS overcome them. We will not make the sick pay for Labour's debt crisis."



According to reports, Buckinghamshire, West Middlesex Barts and the London, Oxford Radcliffe, North Bristol, St Helens and Knowsley, and Portsmouth are just some of the trusts in difficulty.



The Department of Health is expected to detail plans to resolve the problem in coming months after meeting with executives whose trusts are in difficulty.



Proposals are expected to include the renegotiation of PFI contracts and cost-cutting.



Earlier this month the powerful cross-party Public Accounts Committee, which scrutinises Government spending, said taxpayers should get a "much better deal" from the schemes than they currently did.



The Commons Treasury Committee has also said PFI deals are not value for money, with the long-term costs significantly higher than conventional government borrowing.



It urged ministers to use them "as sparingly as possible" until new rules are in place.



The Treasury has pledged to find at least £1.5 billion of savings across the operational PFI projects in England, with the coalition committing to reforming the system.



In total the UK has around 700 PFI contracts. The initiative was introduced by John Major's Conservative government in 1992 as a way of enabling private investors to take on the financing, construction and operation of infrastructure projects.

PA

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