Executive summary

" PFI has a central role to play in modernising the infrastructure of the NHS -but as an addition, not an alternative to, the public sector capital programme." - The Prime Minister, September 2002.

1  It is government policy that some hospitals are going to be built and managed as PFI contracts, as additions to the conventionally procured hospital programme. This report examines one such PFI project to see the extent to which it has absorbed the lessons of previous reports by the Committee of Public Accounts which have been accepted by the government, and how value for money was established in this case.

2  In January 2001, the West Middlesex University Hospital NHS Trust (the Trust) let a PFI contract to a private sector consortium called Bywest (Figure 1). The contract is for 35 years and has an estimated net present value (NPV) of unitary payments of some £125 million. There is also the possibility of extending the contract term to 60 years. The contract requires Bywest to redevelop the Trust's site at Isleworth, West London and then to provide ongoing maintenance and facilities services.

3  We examined the extent to which this PFI contract is likely to deliver value for money and whether lessons had been absorbed from the earlier reports by the NAO and the Committee of Public Accounts on the contract for the Dartford and Gravesham P hospital1. The methodology we adopted for this study is set out in Appendix 1. In summary we found that:

■  This 35-year deal meets expected local needs, with some flexibility to address inherent uncertainties in wider long-term NHS plans;

■  In getting the best available PFI deal the Trust applied common sense and learnt from experience;

■  The Trust considered that the unquantifiable benefits of doing this as a PFI deal outweighed the disbenefits.

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1  The PFI Contract for the new Dartford and Gravesham Hospital: NAO Report HC 423 1998/99; The PFI Contract for the New Dartford and Gravesham Hospital: PAC Report HC 131 1999/00.