Additional £9m PFI bill for Kirkcaldy hospital

Kirkcaldy’s Victoria Hospital could cost NHS Fife £9m more than originally anticipated when it was built.

Victoria Hospital, Kirkcaldy
Victoria Hospital, Kirkcaldy

Across the country the NHS face a hefty bill to pay for private firms financing, building and maintaining its hospitals – including here in Fife.

The Victoria Hospital was built with a capital cost of £170 million. However, latest figures show the cost of the hospital has spiralled, with the estimated whole cost of the project becoming £9m more expensive.

This increase is because the original cost projections factored in inflation at 2.5 per cent, when this has actually been higher than that figure.

So by the end of the 31-year contract, according to the figures received by the JPIMedia investigations team through a Freedom of Information request, NHS Fife will have had to pay £887.5 million for the hospital.

The health board also faces paying an estimated £5.6 million more than previously estimated for the St Andrews Hospital and Health Centre project, which was also built under the private finance initiative, for the same reason.

When asked if, at a time of widespread cut-backs to spending, these PFI deals represented value for 
money, Carol Potter, NHS Fife director of finance, said: “Consort Healthcare was awarded the contract to build phase 3 of the Victoria Hospital, Kirkcaldy and the facility was handed over to NHS Fife in December 2011.

“The Consort consortium designed, built, financed, and operates the phase three facility. In return the NHS Fife Board pays an annual fee to cover both the capital cost, including the cost of borrowing, and maintenance of the hospital over the life of the contract.

“NHS Fife has mechanisms in place to ensure that the contractual obligations are delivered and that the contract provides best value for money.”

A JPIMedia investigation revealed earlier this year that across the UK, the cost of private finance initiatives had risen by billions of pounds more than the original expected costs.