Second batch of hospitals on offer

The second batch, worth between £85m and £145m and due to be advertised next month, will include: a £35m scheme for Derby Mental Health NHS Trust to build a mental health unit and a learning disability centre; a £25m mental health unit for East Leicestershire Primary Care Trust; and the £25m, 20-bed in-patient mental health unit at South Holland Hospital for the United Lincolnshire Hospitals NHS Trust.

Under the batching programme, firms bid for only one scheme in the batch, to cut down bid costs and reduce procurement time. A schedule of rates is used to determine the costs of the other schemes in the batch.

The launch of a second batch will lift the Department of Health (DoH)'s batching programme out of the doldrums, following the failure of plans to launch a southern batch last year and the shelving of its northern batch this year, while Greater Manchester's Strategic Health Authority conducts a review of the region's healthcare provision.

Brian Banfield, of the DoH private finance unit, said: "The three schemes are all at Outline Business Case (OBC) stage and we are confident we can go to OJEU by the end of the year. There is also a major scheme in Leicestershire involving another two or three sites which is not at OBC level and which may or may not be added, depending on the speed at which we get the approvals through."

But the batch has already raised hackles among some PFI players who are accusing it of slowing down the flow of PFI schemes. One leading player said: "The South Holland deal had already advertised for advisors. Now it has gone back to the drawing board as part of a batch. How is this speeding up the delivery of PFI deals?"

Innisfree director Tim Pearson added: "We have always had misgivings about batching and these delays only confirm them."

John Harness, capital development manager at United Lincolnshire Hospitals NHS Trust, defended the Trust's decision. He said: "We see batching as a way of reducing PFI costs by sharing advisers and simplifying and speeding up the procurement process. Our scheme will not be delayed by this change of plan. In reality it may actually knock a month or more off the original timetable as well as reduce costs."

David Pitt, executive director for strategic development at Derbyshire Mental Health Trust, said: "Value for money is key to our decision. This method bears the PFI costs across three schemes and speeds up the process."

Pitt said the procurement process was expected to take 20 months.