The PFI debt that has led to the hospital trust’s finance woes was inherited when Huddersfield Royal Infirmary was merged with Calderdale Royal in April 2001.
Just a few months later it was reported that the cost of the new hospital at Salterhebble had already sky-rocketed way past its 1998 estimate.
In August 2001 the consortium that built the hospital, admitted that costs had already tripled from an estimated £34m to £103m.
Plans to build a new Calderdale Royal Hospital emerged in 1994 and a scheme to use PFI was first mooted prior to Labour’s general election win of 1997.
The deal itself was signed in 1998 by Health Minister Alan Milburn on behalf of the Department of Health, who at the time boasted of the government’s programme to “modernise the National Health Service” by providing new facilities.
In 1999, Ken Clarke, former Chancellor in John Major’s Conservative government, was quoted in the House of Commons taking credit for launching the huge hospital building programme, saying it was “entirely the result of flow through” from the previous government.
Kevin Rowles, an economics expert at Huddersfield University said: “PFI schemes were the flavour of the month in the early 1990s and were then extensively used by Gordon Brown as Chancellor.
“It was a way of using private finance to fund major improvement projects in the public sector, such as hospitals, schools and prisons.
“It is like a mortgage a very expensive one.
“With a hospital PFI deal, the NHS will not own the hospital but will lease it back from investment companies, banks and financiers.
“The repayment terms are very high and it is difficult to end a PFI deal.”
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Documents show the trust pays its PFI obligations to Calderdale Hospitals SPC Ltd, formerly Catalyst Healthcare Ltd.
At the time of the agreement Catalyst Healthcare was a consortium of construction company Bovis, RCO Holdings plc, British Linen Bank and the French bank Société Générale
Currently, its registered trading address on Companies House is given as the Manchester offices of Lend Lease.
Lend Lease is an international property and infrastructure group that runs buildings across the world, including Britain’s biggest shopping centre Bluewater. It has also worked on the redevelopment of the World Trade Centre, destroyed on 9/11.
The latest accounts show Calderdale Hospitals SPC Ltd made £2.8m profit in 2014.
The Examiner attempted to contact Lend Lease but no one was available.
