Newspaper article Evening Gazette (Middlesbrough, England)

HOSPITAL DEAL TO COST Pounds 1BN; the Debt Owed by Tees Trust for Building and Maintenance TRUST OWES Pounds 1BN

Newspaper article Evening Gazette (Middlesbrough, England)

HOSPITAL DEAL TO COST Pounds 1BN; the Debt Owed by Tees Trust for Building and Maintenance TRUST OWES Pounds 1BN

Article excerpt

Byline: NEIL MACFARLANE ;SANDY McKENZIE

A TEESSIDE NHS trust owes almost pounds 1bn for a hospital over the next 30 years thanks to a private finance initiative (PFI).

The money is owed to private companies brought into build and maintain facilities at the James Cook University Hospital in Middlesbrough.

One Teesside MP today denounced such PFI deals as a waste of public money.

Cash-strapped South Tees Hospitals NHS Trust recently announced a pounds 600,000 deficit in this year's budget - brought about by rising costs in agency fees, drugs and interest owed under the PFI contract.

The deal with contractors Endeavour SCH and Carillion was signed in August 2003 and will run until 2033.

TRUST OWES pounds 1BN From Page One The total cost comes to an estimated pounds 911.8m. Figures released after a Gazette freedom of information request show that the Trust now owes pounds 129.6m as a principal debt repayment, plus a further pounds 147.7m in interest - which could rise even further with inflation. Another pounds 476.8m - or pounds 21.3m a year - is owed to pay for service fees covering catering, laundry and maintenance services. The contract also includes a "lifecycle commitment" worth pounds 157.7m - which the Trust says is a contract to "keep the building maintained to an acceptable standard". Ian Swales, the Liberal Democrat MP for Redcar, criticised the previous Labour Government for saddling the NHS with huge debts from public-private projects. "PFI has left the NHS, and many other areas of public services, with massive debts and commitments that the previous Government tried to hide," he said. "These costs will be there for generations. "There are three parts to setting up a new hospital: financing; construction and services. Why anyone imagines that they can get the best deal by wrapping all three together is beyond me. …

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