Govt told to cover 'excess' PFI costs

The Department of Health should provide additional funds for PFI repayments at the bankrupt South London Healthcare NHS Trust, its Special Administrator has said.

In the administrator’'s first draft report into the trust – which was placed into the Regime for Unsustainable NHS Providers in July – he suggests the government should provide annual support to two of the trust’s six PFI contracts.

Under the proposals, the health department would provide direct support to cover the “excess” costs of the PFI contracts for the Princess Royal University Hospital and Queen Elizabeth Hospital, which the administrator notes have been recognised as costing “substantially more” than had they been financed through a traditional public procurement.

The report added that a detailed analysis of the costs of the PFI contracts to the trust will be included in the final report, due early next year.

Meanwhile, the administrator supported the potential use of a private sector partner to run the Princess Royal University Hospital as a franchise, in an approach similar to that used at Hinchingbrooke hospital in Cambridgeshire.

However, the report currently favours an acquisition of the hospital by King’s College Hospital NHS Foundation Trust.