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It appears that the United Kingdom is having doubts about the future of hospitals built with private money.

Citing the need to review “affordability, value for money and need”, Britain’s health secretary, Patricia Hewitt, has delayed signing off on a £1.15-billion privatization scheme to refurbish the country’s oldest hospital, London’s St. Bartholomew’s, and its neighbour, the Royal London.

Construction on St. Bart’s, the biggest private finance scheme (PFI) ever undertaken by the National Health Service, was to have begun already. Construction crews have been on site every morning, waiting for word, only to leave at night without accomplishing any work. Each hour of inactivity costs taxpayers another £25,000 or £600,000 a day, according to the hospital trust and developers.

Elsewhere, regional health bosses are due to carry out reviews of a half - dozen forthcoming PFI projects in the coming months. The government’s sudden change of heart raises doubts about the future of the other 47 PFI hospital projects in the pipeline.

There are £12 billion worth of hospital PFI schemes waiting for final sign-off, but the Department of Health has indicated its future program for PFIs will amount to £7to £9 billion, making the privateers very nervous.

Under British PFI schemes, touted by the Labour government as the “third way,” private companies build hospitals and public NHS trusts repay them over 25 to 40 years. However, concerns have been raised about so-called “payment by results.”

This is a controversial new funding system whereby hospitals receive money per patient treated, instead of a lump sum, making it difficult to predict income from year to year, especially given the current shift away from hospital care to community services and outreach clinics. Under payment by results, more NHS trusts may struggle to meet PFI costs. Already, one in four trusts failed to balance the books last year.

Then there was the recent fiasco surrounding the Queen Elizabeth Hospital in London. In December 2005, this flagship PFI, which opened with great fanfare in 2001, declared itself technically bankrupt, citing crippling PFI debt.

Among other PFI hospitals on hold:

  • Building of a £500-million hospital in Birmingham to replace two aging hospitals is stalled. The hospital is waiting for Department of Health and Treasury approval.
  • A local health trust was informed before Christmas that the Department of Health and the Treasury were reviewing a £291-million PFI scheme to transform the Hillingdon Hospital in northwest London into a modern establishment.
  • The Plymouth Hospitals Vanguard PFI project is under review. The scheme involves the building of a £200-million centre for non-emergency patients and the redevelopment of the Derriford Hospital.