The private finance initiative is likely to be expanded further into primary and community care, the Department of Health reveals in its first capital investment strategy.

The document says that PFI in the NHS is 'about much more than just the big hospital projects'. The next challenge is 'to replicate the success of the major acute schemes in non-acute settings'.

Of 130 schemes being taken forward under PFI, 'the vast majority' cost between£1m and£10m.

The DoH is 'exploring the scope for PFI-type solutions... especially in those areas where it has proved difficult to improve the standard of existing premises'.

Pathfinder projects have been set up to develop models of procurement both for community facilities and 'batching of schemes to upgrade health centres and for energy-management systems'.

The strategy also outlines the prospect of single PFI contracts for a 'whole-health economy' cutting across boundaries of primary, intermediate and secondary care.

'This could lead to better co-ordination of services, more seamless care for patients and better value for money through economies of scale,' it suggests.

But Barry Elliott, finance director of Royal Hospitals trust, and chair elect of the Healthcare Financial Management Association, cautioned against 'the danger of locking the whole-health economy into a long-term financing agreement - possibly for as long as up to 30 years'.

He said: 'If the theory is that we might have some flexibility in between sectors, it is difficult to see how that would work.'

He expressed concern about how risk management could be carried out across a whole-health economy.

NHS Confederation policy director Nigel Edwards welcomed the strategy's 'recognition of the importance of local health economies'. But he called for 'further development and evaluation' of the flexibilities of PFI.

'We are sure the DoH will be taking steps to ensure the dangers of creating monopolies are dealt with,' he added.

Spending on the first two waves of major health service PFI schemes will total almost£2.2bn, the strategy says.

A breakdown of schemes agreed since May 1997 illustrates the scale of public-private partnerships, with£941m spent on those that 'have reached financial close' and a further£1.2bn planned for 'prioritised' schemes.

Over the same period, just£217m was spent on publicly funded schemes.

HSC1999/113:LAC (99)19 Capital Investment Strategy for the Department of Health.