DH review dissects Equion health PFIs

Radical surgery to two of Equion’s PFI hospitals will see huge chunks of new-build work sliced off both schemes and large amounts of refurb grafted-on following a cost-cutting Department of Health (DH) review.

The results of the DH’s review into the £800m University Hospitals of Leicester (UHL) NHS Trust’s redevelopment and the £400m North Staffordshire Hospitals PFI scheme are expected later this month.

Equion is preferred bidder on both schemes in consortium with Serco and Laing O’Rourke at Leicester and with Sodexho and Laing O’Rourke at North Staffordshire.

The bad news for UHL is that its scheme will be cut by up to £200m. The good news is it will not lose one of the three new-build hospitals in the scheme, as first feared.

A spokesman said: "It is still a three-site solution, but we have had to cut our cloth accordingly."

Leicester General will now get £100m towards developing its planned care and rehabilitation site. However, plans to develop new operating theatres have been cut in response to the policy shift in delivering healthcare locally. Both the Royal Infirmary and the Glenfield hospital will see a substantial increase in refurbishment work rather than new build.

UHL NHS Trust chief executive Peter Reading warned: "This does not mean we are out of the woods yet, or that it is a done deal."

At North Staffordshire, the first phase, worth £55m, will be taken out of the PFI scheme and delivered using public money via the ProCure 21 programme. Laing O’Rourke is expected to obtain this contract as an extension of other ProCure 21 work it is carrying out for the Trust.

Meanwhile, large chunks of the privately-financed second phase have been cut, including the outpatient block. This will now be moved into existing buildings which will be extensively refurbished. Plans for a three-tiered carpark have been aborted in favour of four ground-level car parks.

Equion managing director Richard Weston said both schemes were getting "tremendously good value" and that "enormous efforts" had been made to drive out any extraneous costs while still meeting the healthcare needs of the local community. He added that "discussions are ongoing around the appropriate recovery of any abortive costs".