Top PFI players have denied that the government’s hospital programme is on hold.
A senior PFI source close to the Treasury rejected claims that a review was being undertaken, after news last week that the Department of Health had asked Barts and the London NHS Trust to reconsider the £400m St Batholomew’s hospital scheme. The trust met on Tuesday and resolved to stick with the current plans.
The source added that the department’s decision did not indicate a more general move towards smaller PFI projects. He said: “Barts was always going to be the largest of the healthcare PFIs so by definition any other PFI is going to be smaller. If there were a move towards smaller projects, the M25 PFI would not have just gone to the market – that’s worth £1.5bn.”
Sources in the finance community said that a shift to smaller hospitals was expected, but this was not linked to PFI financing. One source said: “The government is looking at deals that are big and ugly and need closing on £700m or £800m and are asking if they really need those hospitals.”
Another added: “The issue around hospitals is, from a clinical point of view, whether capacity is of the right type and in the right place.”
The government is looking at big, ugly £700m or £800m deals
PFI health sector source
Mowlem and Bouygues are waiting on a decision on the £200m Torbay hospital project in Devon, which is expected soon.
A decision on which contractor would be given the contract had been scheduled for 15 December but is now expected at the end of the month.