The future of Private Finance Initiative (PFI) schemes in the health sector is now on firm ground as minister of health Alan Milburn has given the go-ahead to 12 projects, worth a total of £1.3bn, to upgrade facilities in the National Health Service.
Fourteen schemes in total have now been approved, two of which are already in progress. They were whittled down from a total of 120 being considered at the time of the General Election, 43 of which were entered for review by the Government.
Despite the radical cut in the number of schemes, Labour's commitment to the principle of PFI in the health sector was never in doubt. When it came into office it pushed through the NHS (Private Finance) Bill, designed to meet the concerns about trusts becoming insolvent.
"Future schemes will depend on how these 12 succeed," said Lawrence Bruce, a partner at Beachcroft Stanleys, which is involved in 35 PFI projects altogether and three of the health projects. "There was a risk that they could have been killed. But it is quite sad when you see the state of some of these places. There clearly is a need and where else would the Government get the money?"
Arthur Lovitt a partner at Pinsent Curtis, which is involved in five of the approved schemes, said: "I sympathise with the idea of getting a few going and doing them right, rather than doing everything at once. But the Government is committed. It wants to get bulldozers on the ground."