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Trust reveals PFI overspend

2nd November 2012

The cost of redeveloping a Nottinghamshire hospital under a PFI deal has soared.

Pound Sign

A PFI (private finance initiative) deal covering the period 2005-2043 for King’s Mill Hospital was originally for £976m but latest figures show that the cost has now more than doubled to £2.05bn.

The hospital is run by Sherwood Forest Hospitals NHS Foundation Trust, which has declined to comment in detail at this stage but it said that the issue was “complex.”

The figures were obtained by the BBC in a freedom of information request.

They show that the trust estimates the “mortgage” costs of paying back capital and other initial costs to be £738m, while the service costs over the period until 2043 have risen significantly from the original estimate of £193m to £1.26bn.

Conservative MP for Sherwood, Mark Spencer, described the situation as “completely bonkers.”

He said: “We need to find out who signed the deal and who was going through the small print and what they were thinking of when they signed the deal. We have a new chairman and we have to get behind him and sort out the mess.”

Public finance expert Malcolm Prowle from Nottingham Trent University said that in 2004, PFI deals were popular and there was a fear at the time that if hospitals didn’t get PFI deals, the project would not go ahead.

He added: “There was a lot of enthusiasm to make sure the PFI got through, if that meant understating some of the costs perhaps that tended to happen.”

 

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