The NHS body was due to pay £2m a year for the next two decades to the private firm that built West Park Hospital in Darlington, County Durham.
But after reviewing the costs, Tees, Esk and Wear Valleys Mental Health Foundation Trust decided to take advantage of a break clause in the deal.
It paid £18m upfront to get out of the PFI contract 23 years early, but it now owns the hospital outright and expects to save £14m over the course of the deal once maintenance and inflation is taken into account.
The move, disclosed in the Health Service Journal, comes after The Daily Telegraph uncovered evidence that hospitals are closing accident and emergency departments in order to pay the interest on PFI deals for new buildings. Some PFI hospitals – built and run by private firms and effectively rented back to the state – will end up costing taxpayers more than 10 times their capital value.
“We concluded that the best option was to exercise what exists in the PFI projects, which is a clause called ‘voluntary termination’,” said Colin Martin, Director of Finance at the Tees, Esk and Wear Valleys trust.

Now why didn't they do that sooner if it was going to save money?

Now why didn't they do that sooner if it was going to save money?

Dunno, but the article implies that this was some sort of 'switch point' in the deal - maybe the actual cost of the hospital build had been recouped by the PFI company and the trust had a clause allowing them to opt out of the purely maintenance part of the contract as long as they paid the PFI company a set amount as compensation.

You'd assume the PFI company would be happy to accept that - they'd get their profit up front rather than having to wait for it. Especially given the fact the PCTs are all going to be dissolved soon, they might have been left with a PFI contract with a PCT that didn't exist any more and who knows if whatever replaces the PCTs would be willing to stick to the PFI contract at all..

(God, public finances really are three letter acronym hell..)

Jon