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PFI deals under fire

The BBC reports that a political row has erupted over the legacy of PFI for the health service, sparked by news that one hospital trust faces insolvency.

South London Healthcare, a merger of three hospital trusts, is spending 14% of its income on repayments to a private finance initiative (PFI) and the government blames this on a PFI scheme signed off under Labour’s watch.

The government could appoint an administrator within weeks and the move raises the prospect that other trusts could follow in its wake.

There are another 20 trusts that have declared themselves financially unsustainable in their current form.

Andrew Haldenby, from the think tank Reform, told the BBC that some other PFI schemes had delivered good hospitals and good value for taxpayers. But he warned that difficult decisions about the numbers of hospitals in England could not be postponed.

"One infive hospitals are in real financial difficulty. Every hospital - even if it is in the black right now - needs to be looking really hard at this. Although we are talking about South London today, every NHS Chief Exec needs to be looking at this today."

Labour has accused the government of "losing its grip" on NHS finances and wasting billions of pounds on an NHS reorganisation which is "opposed by patients and health professionals".