1 Private Finance Initiative (PFI) hospital contracts are awarded and managed by local Trusts. The contracts use private funding to build and maintain hospital buildings. The contractor often provides support services, typically including cleaning, catering and portering, often referred to as hotel services.
2 The Department of Health (the Department) is responsible for approving new contracts with a capital value of over £35 million or those that are high risk. The Department also supports Trusts in negotiating and managing the contracts. The Department currently supports 76 such operational PFI contracts in England, costing £890 million a year.
3 The Department's accountability for the contracts depends on the type of Trust managing the contract:
a Thirty-nine per cent of the contracts are managed by Foundation Trusts (Foundations). Foundations provide NHS services but are independent of the Department. The Department cannot require Foundations to provide information or direct Foundations to take specific action. Each Foundation chief executive is directly accountable to Parliament as an Accounting Officer.
b Forty-nine per cent of the contracts are managed by NHS Trusts. These Trusts have not yet achieved Foundation status and remain directly accountable to the Department. The Department aims that all NHS Trusts obtain Foundation status by the end of 2013-14.
c Twelve per cent of the contracts are managed by Primary Care Trusts (PCTs). Some PCTs operate hospitals as part of their provider function. PCTs are formally accountable to the Department via Strategic Health Authorities.
We use the word Trust to include all three types of Trust.