PFI is the wrong method to build major hospitals, expert claims

PFI is the wrong procurement method for building new hospitals due to rapid changes in medical technology, a leading academic has claimed.

David Eaton, a senior lecturer at Salford University and qualified QS who wrote a report on PFI for the RICS last year, claimed PFI deals would always be subject to change due to the nature of medical practices. His claim came amid much uncertainty for hospital PFIs. The £1bn Barts and Royal London scheme, as well as projects planned for Birmingham and Colchester, are facing reviews by the Department of Health looking at value for money.

Eaton said: "Technology in medicine is moving so quickly, but PFI is not designed for short sharp shocks. That's what you tend to get in medicine. It's almost inevitable that you are going to get into problems with over-spending and renegotiations."

Eaton pointed to one completed hospital scheme where a whole suite of rooms needed to be re-designed due to the nature of the equipment changing radically in the years between design and construction. "That's always going to happen because medicine is advancing so rapidly," he said.

Eaton said the current Procure 21 programme used by the DoH for small hospital projects was more appropriate for larger schemes. "There's much more control over inputs and design in Procure 21."

Technology in medicine is moving so quickly, but PFI
is not designed for short sharp shocks

David Eaton, senior lecturer, Salford University

He said that PFI was ideal for other markets such as road and toll bridges but added that other sectors such as health and regeneration were more subject to "political manipulation" which could be detrimental to the contracts.

Eaton's Quantifying Quality report carried out studies on completed PFI projects.

The report called for changes to PFI including reimbursing losing PFI bidders' tender costs and improving how value for money is judged in schemes. A DoH review into the Barts scheme is due to be completed by next week. Contractor Skanska, whose team includes consultant Cyril Sweett, was due to press ahead with the project this year.