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BMA says cash is being diverted from other parts of NHS to meet shortfall Doctors' fury as PFI hospital costs soar

THE BRITISH Medical Association (BMA) has criticised the government for bailing out contractor-led consortiums working on privately-financed hospitals.

A hard-hitting report from the doctors' association said the average cost of 14 jobs in the first-wave of PFI healthcare proposals has soared by 72 per cent during procurement.

The study said the Department of Health is compensating for this rise by pumping-in £220 million of public cash which is being taken away from other parts of the NHS.

Allyson Pollock, co-author of the report, said: 'Outline business cases for these schemes were supposed to establish exactly what local health authorities could afford. But they have only had small increases in funding recently, so how can they afford these price rises?'

All 14 pathfinder schemes have been hit by price hikes. The BMA study said the cost of a scheme in Swindon has risen from £45 million in the outline business case to £145 million.

The new Labour administration reviewed the PFI healthcare sector and gave 14 schemes the go-ahead in July, but only deals at Dartford & Gravesham and Carlisle have been approved.

The remaining 12 schemes are on hold because private sector backers are worried they will not see a return on their investment.

Schemes in danger are believed to include Durham, Hereford and Norwich & Norfolk.

These fears are being underscored by the government's decision to bankroll schemes deemed ''unrealisable'' under the PFI.

Only last month, a £73 million proposal in Reading got Treasury backing - despite Lovell spending £750,000 working up a PFI bid.

Government ministers are considering plans for a £300 million super hospital in London which would kill off a number of PFI projects in the capital.

A private consortium led by consultant Ove Arup and McBains Investment Management is behind the Millennium Hospital proposal.

The scheme would replace the following hospitals: Elizabeth Garrett Anderson; Middlesex; Nervous Diseases; St Bartholomews; Tropical Diseases; University College; and Whittington.

A number of these have advanced PFI proposals with decisions due in the New Year.

Amec is preferred bidder on one of the schemes under threat.

But David Hudson, managing director of McBains, said: 'There are only two or three contractors who could do this job and, as we are in direct competition to the Amec scheme, it would be politic to invite them to bid.'