Trusts 'shell' bed space to keep grip on PFI approval

The process - known as shelling - cuts the annual charges the trusts pay the PFI developer as some areas are not fully fitted out, reducing both initial cost and ongoing facilities management charges.

Trusts say they are using shelling to build in flexibility in using the space. The Department of Health confirmed that it was concerned over the affordability of the schemes and said that shelling was 'an appropriate solution to this concern'.

Involved are Barts and the London trust, where 181 beds out of 1,248 will be shelled; University Hospital Birmingham foundation trust (108 out of 1,213); and St Helens and Knowsley trust (100 beds).

Mid Essex Hospital Services trust, whose PFI plan is awaiting approval, is also expected to have some shelled space but says this was planned from the outset.

Some trusts only introduced the idea of shelling when the DoH was reviewing the plans - potentially too late to redesign the hospitals with fewer beds without a long delay.

A DoH spokesperson said: 'Barts, St Helens and Birmingham were clear that they could afford the costs of the PFI scheme. However, the department was concerned at the overall proportion of trust income being taken up by PFI payments and the local implications of this.

'Use of shelled space was an appropriate solution to this concern since it allowed the trusts to retain the option to extend the scheme should demand require it, whilst avoiding commitment to long-term payments in advance.'

Barts and the London has reduced its unitary charge by£9.4m by shelling. It will still have to pay£98m a year.

A spokesperson said: 'We are working closely with clinicians and healthcare partners to identify how this capacity can best be used to meet changing patterns of healthcare provision.'

Trusts need to make a business case for bringing the extra capacity into use, which normally requires government approval. Although trusts escape some of the costs of running the beds until they open, they still incur the cost of building the extra space.

Unless this can be put to good use, it will not contribute income towards the annual charge.

The DoH says shelling has partly been justified by the uncertainty in patient flows and pathways created by NHS reforms. But it says it 'has only really been practicable in or near the largest inner city environment, where patients flows and activity and demand for acute services is that much more difficult to predict'.

Birmingham city council's NHS overview and scrutiny committee chair Deirdre Alden said: 'This is disappointing for local people. If you need the beds, you need the beds.'