Birmingham Trust Faces Action over Alleged Breach of PFI Rules

By Ward, Seamus | Public Finance, June 30, 2006 | Go to article overview

Birmingham Trust Faces Action over Alleged Breach of PFI Rules


Ward, Seamus, Public Finance


University Hospital Birmingham Foundation Trust might be punished after allegations emerged that it had committed to spend more than £100m on construction before it was authorised by the Treasury.

In April, the Department of Health and the Treasury gave the green light to the trust's £559m Private Finance Initiative to build a 1,200 bed 'super hospital'. Although the Treasury backed the deal, it has now emerged that it had concerns about the trusts governance arrangements.

Des Browne, then chief secretary to the Treasury, wrote to the DoH alleging the trust had pre-empted the Treasury's approval process (which is required for all PFI schemes worth more than £100m) by committing itself to more than £100m of construction work on the new hospital. …

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