Jimmy's gets 160 beds and pounds 50m of private cash

A pounds 50m private finance redevelopment of St James's Hospital in Leeds was given the go-ahead yesterday providing it with a new 166-bed paediatric wing, but also its first private beds for paying patients.

The scheme is the biggest NHS contract let so far under the Government's private finance initiative. It includes a "medipark" to attract pharmaceutical, bio-technology and equipment manufacturers, a 900-place car park which will help raise revenue, and an 80-bed patient "hotel" to which recuperating patients may be transferred.

The development is due to be followed by a string of other privately financed hospitals worth a potential pounds 1bn, including the pounds 35m 150-bed development at Chesham and Amersham announced by Kenneth in the Budget. They include a pounds 90m rebuild at the Swindon and Marlborough Trust and a pounds 100m project to provide a complete new district general hospital on a green-field site at Norwich.

John Horam, the junior health minister, claimed the initiative was "changing the face of hospitals up and down the country" by providing up-to-date facilities in place of ageing NHS buildings. All the clinical services of doctors and nurses would continue to be provided by the NHS, he added.

Harriet Harman, Labour's health spokeswoman, countered that the initiative was privatising the NHS, leaving the service "in hock" to the private companies who would build, own and run the buildings.

The new wing at Jimmy's is due for completion at the end of 1988 and will occupy a 13.5 acre site next to the hospital. The project is being run by a subsidiary of Medipark Ltd of which the leading members are Charterhouse Bank and John Laing Construction.

The 80-bed hotel, in which the NHS will "rent" beds as and when it needs them, will include a 35-bed private unit. It will be run by a private provider who has yet to be identified but who will pay a royalty to the hospital based on the number of patients treated.

A trust spokesman said the aim was to encourage hospital consultants who now operate privately elsewhere to use the facilities at Jimmy's - cutting their travelling time, making them more available to the NHS and providing the trust with extra revenue.

The trust claimed yesterday that private-sector involvement, including innovations in design and running costs, made the scheme pounds 5m cheaper to build and pounds 10m cheaper overall than its publicly-funded equivalent.

John Greetham, chairman of the Northern and Yorkshire region of the NHS, who initiated the project when chairman of Jimmy's, said: "The PFI is not a way of privatising the NHS. Far from it. The PFI actually protects the NHS's fundamental principle - providing health care based on clinical need free at the point of delivery - by finding ways of making quality health care more affordable."

Four hundred jobs will be involved in the construction phase of what is essentially a rationalisation of existing, scattered, paediatric services. It also releases part of the existing hospital for mental health care.

Mr Horam also announced a pounds 20m scheme to provide car parking and office accommodation at the Royal Berkshire and Battle Trust in Reading.