DH slashes £447m from hospital PFIs

Six scaled-down schemes get the go-ahead - but 11 other projects are still in limbo.

Six privately financed hospitals under review by the Department of Health (DH) since last January were finally discharged last week after radical surgery reduced their combined value by £447m (23%).

A further 11 schemes under review, none of which have been advertised, will receive their diagnosis by the autumn, a DH spokesman told CJ.

Meanwhile, other schemes remain in intensive care. Whipps Cross announced further delays to its hospital redevelopment plans this week, while the Trust struggles to fill a £24m black hole in its finances. The £300m scheme was shelved and then replaced with plans for a phased development after Balfour Beatty pulled out last year leaving Bouygues the sole bidder.

However, the Trust announced last week it had suspended work on the phased project until it completes a financial review at the end of the year.

The six hospitals given the green light last week, five of which already have preferred bidders on board, have all been downsized to varying degrees.

The £904m University Hospitals Leicester redevelopment has been shaved by £193m to £711m, while the £400m University Hospital North Staffordshire scheme has been cut to £272m. Equion is preferred bidder for both. The £187m South Devon Healthcare Torbay scheme is now worth £163m.

Walsall Hospitals NHS Trust's plans to redevelop the Manor hospital site have been reduced from £164m to £140m Skanska is preferred bidder. Balfour Beatty's £173m Salford Royal Hospitals redevelopment has been cut to £112m, while its £85m Tameside and Glossop Acute Services project has been sliced to £68m.

A further 11 hospital redevelopment schemes (see list below), announced by former health minister John Reid in July 2004, will complete their reviews by the autumn, said a DH spokesman.

PFI health contractors gave a mixed response this week to the news. "About time too," said one chief executive. "What took them so long?"

However, a PFI director commented: "Let's hope, now these six are through, this gives Trusts a common methodology to use to shunt the rest of these schemes through more quickly."

The 11 schemes still under review

• North Mersey Future Healthcare Project - £1bn
• Watford and Hatfield Hospitals redevelopment - £880m
• Sandwell and West Birmingham Acute Trust - £591m
• North Bristol and South Gloucestershire scheme - £310m
• Northwick Park and St Marks redevelopment - £305m
• Hillingdon Hospital redevelopment - £271m
• Leeds Maternity and Childrens Hospital scheme - £204m
• Papworth Hospital NHS Trust redevelopment - £148m
• Royal National Orthopaedic Hospital Stanmore scheme - £121m
• Southend Hospital redevelopment - £100m
• Taunton Surgical Centre - £75m

[Contract Journal, 23 August 2006, p 3]