£70m grant lined up for Leicester hospitals

A £70m grant to patch and mend Leicester's three hospitals is in the pipeline just weeks after the local NHS trust was forced to scrap plans for a £711m privately financed hospital redevelopment project. The deal was scrapped after costs soared to £921m.

The money, which the Department of Health is expected to agree by October, will be used to upgrade Leicester Royal Infirmary, Leicester General and Glenfield hospitals.

In the same week, local MP Keith Vaz said he will ask the Public Accounts Committee to investigate the £23m of costs accrued by the Trust over seven years on the failed Pathway Project.

He said: "This is a huge amount of taxpayers' money and I am writing to the Public Accounts Committee asking for an investigation. This project has been mishandled and people have been misled."

Preferred bidder Triskelion - a joint venture between John Laing, Laing O'Rourke and Serco - is also understood to have accrued costs of around £20m.

The consortium declined to comment, but a source said: "The failure of this scheme is down to the Trust. Triskelion is asking for its costs to be reimbursed."

The source added that the scheme's spiralling costs were due to the Trust underestimating the cost of refurbishment work outside of the PPP. They also blamed local politics for the ill-conceived scheme. "The scheme was too big but each of the three hospitals had a local MP fighting its corner so political pressure meant all three were included."

A University Hospitals of Leicester NHS Trust spokeswoman said: "Our commitment to investing in these hospitals hasn't changed, but it has to be at the right price."