Two big hospital PFIs at risk

The future of another major hospital project has been left hanging in the balance after the NHS trust behind it admitted it could no longer afford the budget of more than £1bn.

The Department of Health is also reviewing the project to convert three acute hospitals into one complex in North Staffordshire, as well as a neighbouring scheme by the University Hospitals of Leicester NHS Trust. Both private finance initiatives (PFIs) need government approval to continue.

The University of North Staffordshire NHS Trust is holding talks about the cost of its £350m project with its preferred bidder, a consortium consisting of Equion - part of the PFI giant John Laing - Sodexho and Laing O'Rourke.

The scheme, which also includes the construction of a community hospital, was first agreed in 1999. The trust is due to pay between £52m and £53m a year over 30 years, a total of around £1.5bn.

But project director Andrew Underwood said: "We cannot afford it at the level that it's at. If you take an extreme point of view, anything can happen.

"But we believe we can make sufficient adjustments without undermining the project and will be able to go forward. If we could not, the project simply would not go forward."

A number of NHS trusts have been left with serious financial problems after changes to government policy and funding.

A DoH spokeswoman said: "We are having ongoing discussions with NHS trusts to make sure that schemes are fit for purpose and take into account current and future reforms when planning large hospital building projects, as well as reinforcing the need for proper financial controls.

"PFI will continue to deliver the biggest hospital building programme in the history of the NHS and be the principal method of delivering new infrastructure in the acute sector."

There was uproar when the £1.15bn St Bartholomew's and Royal London project was halted earlier this year. There were fears the much-needed revamp might be scrapped but last week the Government confirmed the project would go ahead, though to save money it would be done in more than one stage.