An unpublished report into private finance initiative hospitals has highlighted the problems trusts face in performance managing and enforcing contracts.

An unpublished report into private finance initiative hospitals has highlighted the problems trusts face in performance managing and enforcing contracts.

The National Audit Office report - now released in draft form after a Freedom of Information Act request - highlights the need for more benchmarking information and closer monitoring of planned maintenance work and urges more flexibility in contracts to allow for changing national initiatives.

The NAO commissioned the report in 2005 but the project was cancelled last year without a report being issued. The NAO said the evidence collected was 'too mixed and not sufficiently conclusive to justify a report to Parliament on the value for money'.

But its release would have. been politically embarrassing for the government, which was already reviewing other PFI deals to ensure they were affordable. The report says:

  • 13 of the 19 first-wave PFI hospitals were operating at occupancy rates higher than the NHS target level of 85 per cent. This is partly because of unrealised assumptions about changes in patient care;
  • 15 of the 19 trusts felt restricted in their ability to get value for money on small infrastructure changes. There was a particular issue with the costs and time taken to do minor works such as putting up shelving and notice boards. One hospital needed 1,600 'minor works variations' in two years, costing an average of£750 a time;
  • 12 out of the 19 hospitals felt the level of financial deductions they could impose for poor performance was not enough to motivate the companies to change;
  • cleaning and portering costs were higher at PFI hospitals and were seen as being lower quality;
  • linen and laundry costs were also higher, but on some measures were seen as being of higher quality. Security costs were lower.

But the report concludes that value for money was similar between PFI and other procurement routes, and the hospitals were mostly delivered on time and within budget.

A Department of Health spokesperson said: 'The DoH has never disputed that there were start-up problems at some PFI schemes, most of which have now been addressed. But the point of this report was to compare their overall performance against what had previously been the norm in the NHS.'