THE multi-million pound rebuild of the Royal National Orthopaedic Hospital could overload the organisation with debt, the health secretary has said.
The much-needed £61million redevelopment is the smallest of 22 Private Finance Initiative (PFI) projects where the trusts responsible told the Government meeting the contractual yearly repayments would be "an issue".
Health secretary Andrew Lansley said: "We've been working to expose the mess Labour left us with, and the truth is that some hospitals have been landed with PFI deals they simply cannot afford.
"Labour has brought some parts of the NHS to the brink of financial collapse. Tough solutions may be needed for these problems."
The first phase of rebuilding the Royal National Orthopaedic Hospital (RNOH), a specialist neuro-musculoskeletal hospital in Brockley Hill, Stanmore, is expected to begin in 2013 after the hospital trust recently shortlisted three preferred construction partners.
Harrow Council granted in March 2010 an extensive for outline planning permission for new 159-bed in-patient accommodation and an imaging department to replace Second World War-era temporary buildings that have long exhausted their lifespan.
A Department of Health (DoH) spokesman said: "Concern about the PFI issues facing these trusts is not an attack upon the hospitals, but a recognition, based on what they themselves have told us, that a review of their case should be done so those cases where solutions may need to be found could be identified."
In asking the DoH for permission for the PFI scheme, it assumed the so-called unitary charge - the annual mortgage repayments due to the commercial financiers - would be 10.2 per cent of its budget against a Government ceiling of 15 per cent.
It said at that time it was "confident" that "improved productivity" would help find enough money to cover the unitary charge in ongoing years.
Following Mr Lansley's comments, the hospital trust said: "The RNOH has a fully approved Outline Business Case for phase one of its redevelopment of the Stanmore site. We are currently in the procurement phase of this PFI project.
"We are working with NHS London and the Department of Health to continue to assure ourselves as to the affordability of our plans prior to reaching financial close on the development."
