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Hospitals May Face Funds Crunch

Patricia Hewitt, the Health Secretary of the UK has imposed a review with regard to the country’s largest hospital rebuilding project. //This move has raised doubts as to whether the private finance initiative (PFI) of the Labor Government aimed at modernizing the NHS will be put into operation.

The financial viability and the purpose to be served by the £1 billion plan has been questioned by Ms Hewitt. The original plan involved the rebuilding of the St Bartholemew and the Royal London hospitals. The hospitals in the country are experiencing difficulties with regard to the large annual costs while servicing 25 years to 40 years PFI deals. The guaranteed incomes of the hospitals are also in doubt as a result of the new payment-by-results policy.

The larger the PFI schemes, the greater will be the financial burden, according to Professor Chris Ham of the Birmingham University. The NHS Trust insists that the project is a viable one in spite of Ms. Hewitt’s reservations. The PFI programmes are being reviewed to ensure that there is value for money, which does not mean that PFI hospital projects are being frozen. The scale of the debts that the trusts will run into has been questioned by the Commons Public Accounts Committee in the country. The Queen Elizabeth Hospital Trust is already reported to be technically insolvent as a result of its debts. The country’s community hospitals provide better services than its mega-general hospitals, according to reliable sources.

Construction firms like the Skanska AB in the UK will also be affected as a result of the doubts expressed by the Health Department. The PFI deals will also be affected by the 'payment by results' system. A spokesman from the Health Department has confirmed that the hospital PFI projects are not being frozen.

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