The majority of the PFI funding is being directed at new hospital provision and the Government is making good progress towards meeting its target of 100 new hospitals by the end of the decade. A total of 78 hospital schemes are now operational and a further 32 are under construction.
Nevertheless, the delivery of individual hospital projects continues to suffer from protracted pre-construction delays.
In addition, many of the larger schemes in the programme have either been abandoned or have been substantially scaled back. Therefore the hospitals delivered to date have included more medium-sized projects than initially anticipated.
The Government is also increasingly using PFI to deliver improvement works to GP premises and the provision of one-stop primary care centres provided through the NHS Local Improvement Finance Trust (LIFT) programme.
So far 45 LIFT programmes have reached financial close.
Looking to the future, while work on existing major projects, such as London & Barts, should underpin sector output in the near term, the framework for the longer term has been set by the 2007 Comprehensive Spending Review (CSR).
Although the Department of Health is becoming increasingly concerned about the potential cost of many major hospital schemes proposed by NHS Trusts and has questioned whether they are appropriate to meet changing NHS practices, the CSR unveiled a 13 per cent average annual rise in Government capital funding over the next three years.