§ Mr. DoverTo ask the Secretary of State for Health what plans he has to encourage financial institutions to participate in PFI projects with NHS trusts and to minimise the financial difficulties in doing so. [33028]
§ Mr. HoramMy right hon. Friend the Secretary of State for Health is committed to the private finance initiative in the national health service. The PFI offers investment opportunities to the private sector, while enabling NHS bodies to obtain best value for money for the taxpayer when developing capital schemes. Fifty-seven PFI projects—including four major district general hospitals—with a capital value of more than £500 million have been approved since the PFI was launched in November 1992. A further 40 schemes with a total capital value of about £1.5 billion are testing private finance options as part of the procurement process.
Officials in the Department of Health's private finance unit meet with financial institutions regularly to smooth the PFI process. Where potential difficulties have arisen action has been taken promptly. For example, the National Health Service (Residual Liabilities) Act 1996 which was passed in May this year and is now in force, makes it clear to financial institutions that, should an NHS trust be dissolved, whether as a result of financial difficulties or for any other reason, its liabilities will be transferred to the Secretary of State or to some other NHS body. Also, a potential difficulty with the availability of VAT refunds in NHS PFI projects was addressed recently by a new Treasury direction which came into force on 26 April.