More than 60 hospitals can not afford the rising cost of private finance initiative schemes and are being left “on the brink of financial collapse”, according to the health secretary.

Andrew Lansley said he has been contacted by 22 NHS trusts which claim their “clinical and financial stability” is at risk because of the spiralling cost of PFI contracts.

HSJ originally reported on these 22 at risk trusts in April.

Under the schemes, which were expanded by the previous Labour government, private capital is used to fund public infrastructure projects such as schools and hospitals.

The public sector body then repays the private firm with interest over an agreed time period and in some cases the costs of maintaining the buildings.

However, the trusts say they are now unable to pay for their schemes - believed to be worth more than £5.4bn in total - because the payments of their “NHS mortgages” have inflated during the recession.

Mr Lansley told the Daily Telegraph: “Over the last year, we’ve been working to expose the mess Labour left us with, and the truth is that some hospitals have been landed with PFI deals they simply cannot afford.

“Like the economy, Labour has brought some parts of the NHS to the brink of financial collapse. Tough solutions may be needed for these problems, but we’ll help the NHS overcome them. We will not make the sick pay for Labour’s debt crisis.”

According to reports, Buckinghamshire, West Middlesex Barts and the London, Oxford Radcliffe, North Bristol, St Helens and Knowsley, and Portsmouth are just some of the trusts in difficulty.

The Department of Health is expected to detail plans to resolve the problem in coming months after meeting with executives whose trusts are in difficulty.

Proposals are expected to include the renegotiation of PFI contracts and cost-cutting.

Earlier this month the powerful cross-party public accounts committee, which scrutinises government spending, said taxpayers should get a “much better deal” from the schemes than they currently did.

The Commons Treasury committee has also said PFI deals are not value for money, with the long-term costs significantly higher than conventional government borrowing.

It urged ministers to use them “as sparingly as possible” until new rules are in place.

The 22 trusts whose PFI contracts are said to be putting them at financial risk have been identified as:

  • St Helens and Knowsley,
  • South London Healthcare,
  • University Hospitals Coventry and Warwickshire,
  • Wye Valley,
  • Barking, Havering and Redbridge,
  • Worcester Acute Hospitals,
  • Oxford Radcliffe and NOC,
  • Barts and the London,
  • University Hospitals of North Staffordshire,
  • Dartford and Gravesham,
  • North Cumbria University Hospitals,
  • Portsmouth Hospitals,
  • Buckinghamshire Healthcare,
  • West Middlesex University Hospital,
  • Mid Yorkshire Hospitals,
  • Walsall Hospitals,
  • North Middlesex,
  • North Bristol,
  • Mid Essex Hospital,
  • Maidstone and Tunbridge Wells,
  • Sandwell and West Birmingham,
  • Royal National Orthopaedic Hospital.

Topics