Colin Reeves asserts that bed numbers in new hospitals are determined by commissioners well before a decision is made on whether to fund the hospital through public or private funding.

He forgets to mention government guidance on the 'strategic outline case' (SOC) which covers capital investments over£25m. This requires health authorities and trusts to show they can afford to use private finance for new building projects. Any HA considering a new hospital has to devise a strategy, including future hospital size and capacity, around the constraints of PFI costs.

Birmingham HA recently consulted on a strategy that includes a new PFI hospital. The HA made it clear it would have to release savings, not only for reinvestment but to meet the costs of the PFI. As a result, it is carrying forward proposals to develop cheaper 'new models of care' that will reduce acute inpatient care and generate£50m in savings from hospitals across the city.

In south Birmingham, the new hospital is allowed to keep the savings - it faces an annual availability charge of£25-30m compared with the£6m capital charge it pays now. Investment in primary and community care will have to come from annual growth allocations.

Given the SOC guidance and its consequences for HA strategies, it is disingenuous of Colin Reeves to suggest that the size and bed capacity of new hospitals has nothing to do with PFI.

Ursula Pearce Chair South Birmingham CHC 1997-2000