Spiralling PFI costs ‘putting hospitals at risk’

NHS hospitals are facing spiralling and unaffordable costs because of the Private Finance Initiative (PFI), according to ministers.

The Department of Health has said that many NHS trusts are running into difficulties as their charges payable run into billions of pounds, with the future of some hospitals now at risk.

A total of 22 of these trusts have said they are unable to pay for their schemes, believed to be worth more than 5.4 billion pounds, because the payments have inflated during the recession.

Under PFI, private firms meet the cost of building hospitals and the NHS, then pays them an annual fee over 30 years.

Ministers said there are 12.6 billion pounds worth of PFI contracts in the NHS, with some trusts paying off the scheme until 2050.

Health Secretary Andrew Lansley said: "The truth is that some hospitals have been landed with PFI deals they simply cannot afford."

A Labour Party spokesman defended the PFI deals, saying the investment had been necessary "to replace the crumbling and unsafe buildings left behind after years of Tory neglect".