§ Dr. Brand
To ask the Secretary of State for Health what studies his Department has undertaken on the outcome of the contracting out of NHS trust non-clinical services to private sector providers; and what assessment he has made of(a) those studies and (b) the experience of contracting out for the PFI programme. 
§ Mr. Milburn
National Health Service trusts have supplied the NHS Executive with information on the outcome of market tests. In the areas covered by compulsory market testing (cleaning, catering and laundry services) about 30 per cent. of contracts by value have230W been awarded to commercial contractors. Overall some 86 services have been market tested and about half by value have been awarded to commercial contractors. A review of the operation of the market testing policy is currently being undertaken by Departmental officials. In drawing up our programme for the review of Private Finance Initiative we have taken into account the experience of market testing in the NHS.
§ Mr. Milburn
In my answer to my hon. Friend the Member for Slough (Fiona Mactaggant) I announced my intention to review the 43 major acute sector Private Finance Initiative (PFI) schemes in the National Health Service. I have today arranged for copies of the full results of the review to be placed in the Library. I have also written to all Members and stakeholders in health PFI, enclosing copies of the results. Fourteen major acute schemes have been selected, representing almost £1.3 billion of new capital investment in NHS hospitals.
The review was undertaken by officials and all schemes were graded according to three criteria: (i) their service need; (ii) status—how far and well negotiations have progressed and (iii) "PFI ability"—how well the scheme fits with the PFI process and hence its likelihood of delivering a successful outcome.
This process was both fair and open. Officials from the Department shared with the trusts the criteria against which the projects were judged and their relative markings. I, and my right hon. Friend the Secretary of State for Health as far as the schemes in the Northern and Yorkshire region are concerned, examined the gradings and the reasons why officials recommended schemes either be included or excluded. We also received representations from many Members.
The 14 schemes which most successfully met the three criteria will be asked to continue with their PFI proposal, with the objective of reaching an early and acceptable financial close over the next 18 months. A complete table listing all the scores, along with a note explaining the criteria, has been placed in the Library. We have instructed officials to prepare programmes and milestones for every successful scheme. The schemes will be subject to the normal rigorous approval processes and any of these 14 schemes that subsequently fail to deliver to time or price will be cancelled.
Those schemes not selected will be asked to cease any further action on their contract. They should stand down their partners if they have selected one and cancel all tendering procedures.
Any trust or consortium whose scheme has to met the three criteria and which wishes to make representations to the Secretary of State should do so within the next 10 days. Otherwise such trusts should now take steps to stand down their partners or cancel the tendering procedure.
Those schemes not selected will be eligible for consideration as part of a national capital prioritisation exercise by the NHS Executive's Capital Prioritisation 231W Advisory Group. This group will review major acute schemes for health service need and will recommend those which should go forward either as part of the next tranche of PFI schemes which we plan to announce in spring 1998, or for funding from the public sector capital that is available.
The exercise did not consider the schemes affected by the London review which is due to report in the Autumn. These schemes are also listed in papers deposited in the Library.
The longer term review of the PFI product and process will report its recommendations later this year. This will look to consolidate the improvements in the PFI begun with this prioritisation exercise.