Forth Valley Royal Hospital could cost NHS £70m more than estimated

The impact of the government’s private finance initiative is not only being felt locally by Falkirk Council.

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

Forth Valley Royal Hospital was Scotland’s most expensive PFI scheme with a capital cost of £293 million.

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However, latest figures show the cost of the Larbert hospital has also spiralled, with the estimated whole cost of the project becoming £70 million more expensive since 2013.

Forth Valley Royal HospitalForth Valley Royal Hospital
Forth Valley Royal Hospital

This increase is because the deal has been linked to the retail price index for inflation, and this has been higher than expected in that period.

So by the end of the 32-year contract, according to the figures received by the JPIMedia investigations team through a Freedom of Information request, NHS Forth Valley will have had to pay almost £1.85 billion for the acute hospital.

The health board also faces paying an estimated £3.2 million more than previously estimated for the Clackmannanshire Community 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, a spokesman for NHS Forth Valley said: “The additional costs are due to annual rises in inflation linked to the RPI which applies to all PFI contracts.

“We benchmark the services covered by the contract against industry standards and review the services on a regular basis to identify any potential savings or efficiencies.”

The PFI contract for the 860-bed Forth Valley Royal Hospital was signed with Forth Health Limited – a special purpose company set up solely for the project by John Laing Social Infrastructure and The Commonwealth Bank of Australia.