Hospital spending on private finance schemes is increasing at an alarming rate, a report by the Nuffield Trust suggests.
Repayments on private finance initiatives has increased by almost £200m in two years, according to a new report by the Nuffield Trust.
In 2009-10 NHS trusts in England spent £459m repaying PFI debts.
But by 2011-12 the figure soared to £628.7m as more of the schemes were completed, according to the think tank’s report.
The stark rise represents an average increase of 18 per cent a year.
Last year, South London Healthcare Trust became the first trust to be put into administration after struggling with crippling PFI repayments.
The new report states that PFI debt interest payments have become “a particular burden” to some trusts. For seven trusts, the interest payments make up more than 5 per cent of total revenue.
The report shows that for South London Healthcare NHS Trust, interest payments now account for 6 per cent of spending in 2011/12.
But, worryingly, two trusts paid a higher percentage of their total revenue on such payments - at Dartford and Gravesend Trust, PFI debt interest payments accounted for 7.9 per cent of spending and for Sherwood Forest Hospitals Foundation Trust the figure stood at 7 per cent.
The report also states that trusts in London spent £143.9m on PFI repayments in 2011-12, five times more than spending in the South West of England.
PFI schemes, first introduced in 1992, let the private sector finance the design, building and operation of hospitals, which are then leased back to the NHS.
Commenting on the report, Mark Porter, chairman of council at the British Medical Association, said: “The Nuffield Trust report provides further evidence of the significant financial pressures that NHS organisations are facing.
“Our concern is that the quality of care - which is what matters above all else - is not sacrificed in the drive for greater efficiency.
“Successive governments have pursued policies supposedly aimed at improving productivity by exposing the NHS to competition with the private sector.
“Yet this report finds that trusts in areas where there is less competition are associated with higher productivity.
“It is also clear that the financial burdens of PFI continue to create problems for many hospitals.”