The head of a leading trade body has warned that proposals to put variations to PFI health contracts out to tender may deter contractors from bidding for projects.

Mark Fox, chief executive of the Business Services Association, said: “The government should be careful of adding additional burdens to existing contracts or potential disincentives to private companies participating in the public sector.”

Under the proposed policy, alterations valued at £100,000 or more on Department of Health projects will be put out for competitive tendering. 

The government’s move is a response to a National Audit Office report that was critical of the cost of making changes to PFI schemes.

The Business Services Association represents companies including Kier, Amey, Mitie and Interserve who provide business and outsourced services in the private and public sectors.