Hospital spending on private finance schemes is increasing at an alarming rate, a new report suggests.
Repayments on private finance initiatives (PFI) has increased by almost £200 million in two years, according to a new report by the Nuffield Trust.
In 2009/10 NHS trusts in England spent £459 million repaying PFI debts. But by 2011/12 the figure soared to £628.7 million as more of the schemes were completed, according to the think tank's report.
The stark rise represents an average increase of 18% a year. Last year, South London Healthcare NHS Trust became the first trust to ever be put into administration after struggling with crippling PFI repayments.
The new report states that PFI debt interest payments have become "a particular burden" to some trusts. For seven trusts, the interest payments make up more than 5% of total revenue.
The report shows that for South London Healthcare NHS Trust, interest payments now account for 6% of spending in 2011/12.
But, worryingly, two trusts paid a higher percentage of their total revenue on such payments - at Dartford and Gravesend NHS Trust, PFI debt interest payments accounted for 7.9% of spending and for Sherwood Forest Hospitals NHS Foundation Trust the figure stood at 7%. The report also states that trusts in London spent £143.9 million on PFI repayments in 2011/12, five times more than spending in the South West of England.
PFI schemes, first introduced in 1992, let the private sector finance the design, build and operation of hospitals, which are then leased back to the NHS.
Dr Mark Porter, chair of council at the British Medical Association, said: "The Nuffield Trust report provides further evidence of the significant financial pressures that NHS organisations are facing. Our concern is that the quality of care - which is what matters above all else - is not sacrificed in the drive for greater efficiency."
A Department of Health spokesman said: "NHS trusts are being helped to manage their contracts and identify where savings can be made to reduce the burden of PFI costs. The savings achieved will be available to be reinvested in frontline services."