AN investigation by The Shuttle into the cost of providing a new hospital in Worcester in 2002 has shown it is contributing significantly to the financial plight of Worcestershire Acute Hospitals NHS Trust.

Private Finance Initiative (PFI) contracts signed by the trust meant it borrowed £107,897,000 from PFI provider Catalyst to pay for the construction and maintenance of Worcestershire Royal – which cost £82 million to build. The debt will be repaid over 30 years.

At the beginning of 2012 – 10 years after the hospital opened – £89,640,000 was still owed but John Rostill, previously the trust chief executive, said last year the deal would end up costing taxpayers a total of £720 million.

The trust told The Shuttle it was not having a material impact on its activities but Wyre Forest MP Mark Garnier disagreed.

According to the trust, five per cent of its £320 million budget for 2012/13 – £16 million – will be swallowed up by the PFI deal’s costs.

That figure is disputed, however, as a House of Commons Health Committee document from January, 2010 shows the 2009/10 payment was £24.6 million.

The issue has resurfaced since NHS Worcestershire launched a joint services review, which says the trust needs to save £50 million.

It also comes as South London Healthcare NHS Trust is reported to be in danger of going bust, mainly over a PFI contract for two hospitals, Initially the cost was £210 million but it will pay a total of £2.5 billion.

Mr Garnier, a member of PFI Rebate, which aims to recoup £500 million nationally from existing PFI contracts, said: “It is significant. It is skewing the thought process going into everything we do.

“It causes an issue when saving money because when you have a badly written contract, part of your costs are to serve a badly written contract.”

Chris Tidman, trust director of resources, said: “The overall impact of this on our current financial challenges is not material.

“While it is acknowledged PFI has not always offered best value, an independent review of the scheme confirmed it is well managed and we renegotiated £750,000 of savings last financial year. The larger challenge is managing increasing demand for healthcare within a budget unable to grow at the same pace.”