Viability of PFI projects under scrutiny despite last week’s announcement of £1.3bn pipeline

A £88m PFI hospital project in Middlesex has been put on hold, one of a number potentially affected as healthcare trusts look to balance their books in preparation for full financial independence.

Contractors Sir Robert McAlpine, Balfour Beatty and Prospect Healthcare, a joint venture between Kier Project Investment and Innisfree, are in the running for the rebuilding of the Royal National Orthopaedic Hospital (RNOH) in Stanmore, Middlesex, which was to start |on-site in November 2013.

The trust said the dialogue stage with the three short-listed bidders will now not begin until September.

A spokeswoman for the hospital said: “The (RNOH) NHS trust’s redevelopment scheme has been delayed in agreement with the bidders. The delay is to allow time for the trust to consider … the outcome of a national review of a number of trusts that have registered with the health department that their PFI scheme may impact on their aspirations to become foundation trusts.”

Twenty-two trusts have registered issues with PFIs that may prevent them achieving foundation status. Five of these are under construction, and two, including Stanmore, are in procurement.

This is despite the fact £1.3bn of healthcare spending was identified by the government’s pipeline of construction work published last week. The viability of PFI projects is under scrutiny as acute care hospitals work towards a 2014 deadline to become foundation trusts. Those that are unable to demonstrate financial sustainability will have to merge with another trust, or sell, franchise or outsource operations to the private sector.

Matthew Custance, director of public sector healthcare at KPMG, said: “[The future of the project] depends on whether they can develop a plan for achieving foundation trust status with the PFI as it is. The project has been around a long time, suggesting a genuine infrastructure need.”

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