The Department of Health has confirmed the existence of a surprise £300m fund for capital projects that some trusts had seven working days to apply for - and others have still not been told about.

Projects must have a value of at least £5m and be started this year, with the DH asking for submissions by next Thursday (12 January).

The £300m fund was confirmed after HSJ obtained a copy of a letter sent by NHS London to primary care trust clusters, trusts and foundation trusts on 23 December asking for applications.

HSJ spoke to finance directors at five trusts in other regions of England, none of whom had heard of the fund. However, there are indications the strategic health authority clusters were aware of it.

A DH spokeswoman yesterday confirmed health secretary Andrew Lansley had authorised the fund. Earlier that afternoon the department had said: “Nothing formal has been issued by the Department of Health on this matter.”

The total amounts to 6.7 per cent of the DH’s £4.5bn capital budget for 2011-12.

The letter said: “We understand DH is more likely to favour larger value projects. The schemes need to start in 11-12 and finish by the end of 12-13. 

“Schemes with greater spend in 11-12 are likely to be looked upon more favourably.”

It added: “Although the Treasury is not keen on bullet payments into PFI schemes, if there is a strong value-for-money business case behind this they can be put into the mix for consideration.”

The letter in London was sent to chief executives, finance directors and deputy finance directors on 23 December.

The decision has angered some who said the deadline of today for applications set by NHS London was too tight.

One director told HSJ: “Get your bids in by 6 January for schemes that must be over £5m, preferably spent by end of March? Has someone suddenly found an embarrassment of riches?

“We haven’t seen this kind of thing in about 10 years. The ‘use it or lose it’ at short notice mentality went away for a long time. Seems it’s back.”

A senior figure at a consultancy said the move was probably a move to head off “embarrassment ahead”.

“It will be awkward at a time when people are being told how tight finances are,” he said, adding it had been common in times of growth but was “unusual” now.

The letter sent to London trusts said: “NHS London anticipates being able to secure £75m for London organisations following a bidding process.”

It anticipates confirmation of which bids have been successful from the DH by the end of January.

In a statement sent on Monday afternoon a DH spokeswoman said: “Thanks to good management of central capital budgets, we have idenitified capital funding which could be made available to the NHS. We are now in discussions with the NHS to see how it could best be spent.

“However, no decisions have been taken and no deadlines established at national level. Further announcements will be made when the best possible use of this capital funding has been identified.”