Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to the newest version of your browser.

Your browser appears to have cookies disabled. For the best experience of Construction News, please enable cookies in your browser.

Welcome to the Construction News site. As we have relaunched, you will have to sign in once now and agree for us to use cookies, so you won't need to log in each time you visit our site.
Learn more

NHS struggles with PFI repayments

Hospitals built through the controversial Private Finance Initiative have left the NHS with a staggering £65 billion bill, it has been revealed.

Figures obtained by the BBC show that “mortgage” repayments demanded by the scheme account for in excess of 10% of the turnover of many trusts.

The project allows private companies to use their own money for the construction and maintenance of hospitals. Health trusts pay back the cash over 30 years.

The agreement means that 103 hospitals worth a total of £11.3 billion when they were built will collectively repay in excess of £65 billion, at a current annual rate of around £1.25 billion - to increase to £2.3 billion in 2030. The extra cost is understood to have come from additional fees such as maintenance, cleaning and catering.

Nigel Edwards, director of policy at the NHS Confederation, which represents trusts, said: “They were planned for a different world. I’m sure that in some cases people feel their hands are tied.”

A Department for Health spokeswoman said: “In many cases, repayments include not only the initial capital cost and financing charges, but also all ancillary services like cleaning, portering and building maintenance costs over the life of the contract.”

Hospitals under the PFI scheme will not make their final repayment until 2048.