Plans to replace 'abysmal' buildings housing mental health services in Leeds have finally got the go-ahead almost a decade after the closure of the sites was first proposed. The £47m deal is the largest ever private finance initiative for mental health services.

Consultation on the closure of High Royds Hospital - a 375-bed grade II listed Victorian building which once housed 2,500 patients - and the Roundhay wing at St James' Hospital, began in 1991.

Leeds Community and Mental Health Services Teaching trust was left in financial chaos after Northern and Yorkshire regional office stopped£8. 3m of annual 'excess costs funding' in 1997, when the units had been due to close.

A full business case for the new buildings was eventually put to the NHS Executive in 1998, only to be rejected on the grounds that the land values were too low. The trust re-submitted its case in April, hoping to sign within six months.

Richard Mindham, Nuffield professor of psychiatry at Leeds University and a consultant for the trust, said he was very pleased. 'It has been a long wait, ' he said.

But he warned that the bed provision plans might still not be adequate to meet current need.

Leeds community health council chief officer Colin Perry also welcomed the news.

'It's great. The replacement of these unacceptable and outdated facilities is long overdue. '

But he admitted that the development had been complicated by the trust's then£12m underlying deficit, now reduced to£6m.

Robert Cooper, finance director for Leeds health authority, last year told HSJ that the trust had used the withdrawal of regional excess costs funding as a 'very convenient cloud' hiding broader issues of financial management.

Since then, trust chief executive John Oldham has taken early retirement.

But a trust spokesperson said: 'I'm not aware of these criticisms having anything to do with the chief executive going. '

Under the£47m deal with Bradford and Northern Housing Association, there will be nine new units around the city, offering 380 beds.

These include acute units at St James', Leeds General and Seacroft hospitals, a rehabilitation unit, two 20bed units for elderly people, a child and adolescent unit, forensic unit and intensive care unit.

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