HL Deb 03 July 1997 vol 581 cc44-5WA
Baroness Hilton of Eggardon

asked Her Majesty's Government:

Further to Baroness Jay's Written Answer of 10 June, (col. WA 69), what plans they have for the Private Finance Initiative in the National Health Service.

The Minister of State, Department of Health (Baroness Jay of Paddington)

In my Answer on 10 June I announced our intention to review the 43 major acute sector Private Finance Initiative (PH) schemes in the National Health Service. We have today arranged for copies of the full results of the review to be placed in the Library. My honourable friend the Minister for Health (Mr. Milburn) has also written to all Members and stakeholders in health PH, 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 of Health shared with the trusts the criteria against which the projects were judged and their relative markings. My honourable friend the Minister for Health and my right honourable 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 partner if they have selected one and cancel all tendering procedures.

Any trust or consortium whose scheme has not 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 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.