PFI deal 'costs Middlesbrough hospital £57m per year'

The PFI deal for James Cook University Hospital is set to run for another 14 years

The cost of paying off the construction of a North East hospital under a private finance initiative has risen to £57m per year.

Building at Middlesbrough's James Cook University Hospital was completed in 2003 having been funded through a PFI deal agreed four years earlier.

South Tees Hospitals NHS Foundation Trust's contract with Endeavour SCH PLC is due to run to 2034 and cost £1.5bn.

Endeavour SCH PLC has been approached for comment.

The trust is paying £17.5m over and above what an equivalent Treasury-funded hospital would cost annually - enough to pay 600 nurses, the Local Democracy Reporting Service said.

PFI deals allow private providers to raise capital needed for major projects and run facilities once they are built, with the public body paying an annual charge to the provider until the deal is complete.

While it offers a way to raise funds quickly, such deals often lead to more expensive repayments in the long-term.

'Huge burden'

Middlesbrough's Labour MP, Andy McDonald, said the cost was a "perennial drag on the finances of the trust".

Simon Clarke, Conservative MP for Middlesbrough South and East Cleveland, believes the "huge PFI burden" facing South Tees is a matter of great concern and has written to the Chancellor Rishi Sunak and Health Secretary Matt Hancock about the issue.

Papers prepared for a governing board meeting last week stated the trust continued to have a "structural deficit" of about £25m, with excess costs from its historic PFI listed as the "largest single contributory factor" to its troublesome position.

Former chief executive Siobhan McArdle said finding further savings was "too great a challenge"

Last year the trust's chief executive, Siobhan McArdle, departed and told staff the organisation was "financially unsustainable" without a long-term recovery plan to deal with its debts.

A spokeswoman for the Department of Health and Social Care said it was "considering options to tackle the worst excesses" of PFI deals.