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New PFI: first projects revealed

A £325 million boost for a state of the art hospital in Birmingham and the Ministry of Defence’s basing strategy are among the schemes set to benefit from a new PFI, CN can reveal.

The Sandwell and West Birmingham Hospitals NHS Trust is working with the Department of Health to assess the suitability of private finance 2 (PF2) to deliver the multi-million pound injection. The total expected cost of the new hospital in Smethwick is £484m.

This will enable consolidation of services from multiple sites and reorganisation of activity between hospital and community settings.

CN also understands that the Treasury is also working with the Ministry of Defence as they finalise their basing strategy and infrastructure investment plans for a more cost effective estate that meets ‘Future Force 2020’ requirements.

They are looking at how much of this investment – including construction and maintenance activity – can be delivered through PF2.

The first confirmed programme under PFl is the £1.75bn privately financed element of the Priority School Building Programme (PSBP).

The Treasury and the Department for Education have been working together closely in the development of PF2.

CN also revealed today that a centralised procurement unit is also being set up for the Department for Education, to ensure a swift and more efficient procurement, with similar units mooted for the Ministry of Defence and Department of Health.

The longer term ambition is to see a dedicated procurement unit in future to act across departments.

In the meantime, projects that are not procured within the 18-month deadline revealed today will lose their funding and see it allocated elsewhere.

The Birmingham hospital will replace the old Victorian buildings at City Hospital and the facilities at Sandwell Hospital that are not fit for modern healthcare. 

The newest parts of City and Sandwell Hospitals (the Birmingham Treatment Centre at City and the Emergency Services Centre at Sandwell) will become part of community hospitals that will remain on the existing sites.

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