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Private Finance Initiative

Volume 300: debated on Monday 10 November 1997

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To ask the Secretary of State for Health what assessment he has made of the revenue consequences of capital investments undertaken to date under the private finance initiative, listing all such schemes and the financing costs excluding any ongoing staffing costs; and if he will compare these costs with those pertaining under traditional public borrowing. [14031]

The amount paid to the private sector under Private Finance Initiative contracts will vary depending on the level and quality of service.The annual unitary payments for the two major acute sector PH schemes that have reached financial close are expected to be:

  • Dartford and Gravesham NHS Trust: £18.6 million
  • Carlisle NHS Trust: £10.9 million

The unitary payment is the cost of providing a fully serviced hospital facility. It includes elements of cost for the provision and maintenance of assets, the management of facilities, and financing. To be approved a PFI contract must offer better, or comparable, value for money to the publicly funded alternative.

To ask the Secretary of State for Health what has been the capital investment by the NHS in health care projects (a) in total and (b) within the Birmingham local authority area in each of the last five years up to and including 1996–97, and in each five year period since 1972–73 at actual and constant 1996–97 prices, separately identifying expenditure under the private finance initiative. [14030]

The table shows the total amount of publicly financed capital expenditure within the Hospital and Community Health Services in England and within NHS trusts and hospitals in the Birmingham area.

£ million
YearGross HCHS capital expenditure (cash)Gross HCHS capital expenditure (real terms1)Capital expenditure within the Birmingham area (cash)Capital expenditure within the Birmingham area (real terms)
1A consistent run of figures for HCHS Capital Expenditure for the period 1972–73 to 1977–78 is not available.
  • 1. Figures for capital expenditure within the Birmingham area are taken from NHS Executive Regional Office records and are not directly comparable with the England figures. Figures prior to 1993–94 are not readily available.
  • 2. Real terms figures have been calculated using the GDP deflator of 2 July 1997.
  • In addition the Private Finance Initiative has contributed an estimated further £55 million in each of the years 1995–96 and 1996–97. There are no completed PFI deals in the Birmingham local authority area.