Call for more private cash in NHS

Kenneth Clarke, Chancellor of the Exchequer, will call for more private investment in the National Health Service at a conference next week that will review the first year of the Private Finance Initiative.

The conference will be told that infrastructure projects worth more than £2bn have been put out to tender to private companies and a further £15m of work is in the pipeline. In addition, the £3bn Channel Tunnel rail link is out to tender.

Mr Clarke plans a strong response to critics of the PFI, especially complaints that its projects are slow to get under way and are often investment risks for small firms. Construction firms have criticised PFI road-building projects as being suitable only for larger firms which can afford the long lead times.

Tuesday's conference will see publication of the first comprehensive list of PFI projects, and will show that more than three-quarters of them are for investments under £5m. This year will see a drive for more PFI funding after last year's ruling that all government departments must consider private investment for capital projects.

Mr Clarke wants to see more funds channelled into the health service, which has so far seen 62 PFI projects completed and has another 50 in progress. Total private investment in the NHS is £135m. However, the NHS consultancy Newchurch has drawn up a listof 500 potential projects - worth £1.5bn - suitable for private investment.

The PFI panel, chaired by Sir Alastair Morton, was launched in 1993 and has become a key part of the Treasury's strategy to cut public expenditure. On Tuesday Sir Alastair will announce that about three-quarters of the 680 new PFI projects to be taken forward will be NHS schemes.

Projects out to tender include four road-building schemes worth £370m, and two prison contracts worth £130m.