Decades of debt fear on private finance hospitals

According to Treasury figures, the NHS still owes 58bn in England on 106 contracts for buildings constructed since 1999.

Health services face paying off the bill over the next 30 years on buildings which cost only 11bn when they were built.

The statistics are being highlighted by the Liberal Democrats, who claim the huge repayments will lead to cuts in vital services.

PFI buildings are privately owned but each year the NHS must make payments for the cost of building them as well as their ongoing upkeep.

The highest total bill for service payments in Yorkshire will be for the new cancer hospital in Leeds, which cost 265m to build but will require payments totalling 1.25bn until the costs are paid off in 2040-41.

A scheme to revamp hospital services in Wakefield and Pontefract is costing 353m. The first payment of 27m to pay off the sum is due in 2010-11 but overall the project will need 1.2bn in finance until 2039-40.

One of the earliest projects under PFI in Yorkshire was a landmark venture for mental health services in Leeds which will finally cost 360m on an initial investment of 47m.

Another early project to build Calderdale Royal Hospital in Halifax cost 65m but the final bill will eventually total a whopping 731m by 2031-32.

Other PFI projects in the region include two in Hull which will eventually cost 260m and one to build six primary care centres in Kirklees at a cost of 89m.

The scheme to rebuild Wharfedale Hospital at Otley, near Leeds, will cost 75m, the new Jessop Wing in Sheffield will run to a cost of 110m and reprovision of mental health services in Doncaster will hit 80m.

Liberal Democrat health spokesman Norman Lamb said: "These figures reveal the disastrous reality of Labour's stewardship of the NHS. We're entering into one of the most difficult financial periods in the NHS's history and this Government's legacy will be a mountain of debt.

"Despite the enormous amounts of money we owe for these hospitals, many of them will never end up in public ownership. Hospitals all over the country are mortgaged to the hilt and there are serious concerns that these repayments will lead to cuts in vital services."

Leeds Partnerships NHS Foundation Trust, which runs mental health services in Leeds, said the new PFI buildings replaced old

institutional facilities.

Annual payment costs, which this year totalled 9.5m, covered charges for building space, maintenance, non-clinical services and associated staff.

"We are extremely satisfied with the service we receive from our

current provider Equitix," said a spokesman.

"We are dedicated to ensuring that the buildings in which we provide our services are of the highest calibre to ensure the best possible patient care."

A Department of Health spokesman said: "All PFI schemes must demonstrate that they are good value for money and affordable when compared with the public funding alternative.

"Thanks to PFI, we have been able to undertake the biggest hospital building programme in the history of the NHS, opening the 100th scheme in October 2008.

"PFI payments involve not just the basic construction cost but also building maintenance and often support services such as cleaning, catering, and portering over the life of the contract."

Tories launched capital initiative

The first private finance initiative projects were approved by the Tories in 1992.

Under the scheme, new capital investment for public services is provided by finance raised through the private sector.

The remaining debt is paid off by the taxpayer over decades – usually around 30 years on NHS projects – through an annual fee to cover the original cost and continuing maintenance and upkeep of buildings which are leased to the NHS.

Supporters claim the approach lowers the long-term costs of projects and removes risks from NHS organisations as well as ensuring assets are delivered on time and to budget.