Batched hospital plan is casualty of red tape

The flagship £500m Salford, Thameside and Bradford hospitals batched PFI project has ground to a halt, following a decision by Manchester's Strategic Health Authority to investigate the scheme's affordability.

The delay to the scheme, known as the "northern batch", deals a severe blow to the DoH's batched PFI programme, which was developed specifically to speed up the delivery of the government's PFI hospitals programme.

Earlier this year planning problems forced the DoH to scrap plans for a second "southern" batch of three hospitals in the South of England.

Manchester's Strategic Health Authority said the review was prompted by concerns about the balance of funding between the acute and primary care sectors in the region.

A spokesman told CJ: "We are reconfirming the scope of the scheme before we go to market."

The review is expected to be completed by the end of the year.

A senior official at the DoH private finance unit confirmed the delay, but said the review was "procedural".

He added that the department is confident the northern batch will go ahead and insisted the batched PFI programme is viable. He confirmed that the southern batch was now defunct, but said: "We are putting together plans for a batch of three mental health units in the Midlands with a value of around £40m each."

The three shortlisted bidders for northern batch, Catalyst (Bovis), Equion and the Balfour Beatty-led Consort, declined to comment on the delay.

However, sources close to the bidders say there is a great deal of anger and frustration. One said: "This shows the amount of power strategic health authorities have over the centre. It is ironic that while the DoH is desperately trying to speed up the process, the localities and their red tape procedures are ensuring it all stays as time-consuming and expensive as ever."

Another said: "We are all geared up and ready to go and now we have to redeploy the team. Is it any wonder they can't get enough bidders for these schemes? This will guarantee even less interest in any future batches."

Health minister John Hutton launched the batched PFI programme last year in a bid to cut down excessive bid costs and to address the problems of capacity in the PFI sector.

The batched deals see bidders designing and bidding competitively for the principal hospital in the batch, with the successful bidder then awarded a framework deal encompassing the other hospitals.

The northern batch consists of the £173m Salford Hospitals scheme as the principal hospital, the £85m Thameside Hospitals scheme and the £227m Bradford Hospitals project. The southern batch was to include the £175m Tunbridge Wells scheme, and the £102m East Kent Hospitals schemes.