Hospital scheme axed as costs soar

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A total of £23.4 million has already been spent on planning for the Leicester project, which was to be built under the private finance initiative (PFI) scheme.

The University Hospitals of Leicester NHS Trust (UHL) said the plans - for its three hospital sites - were no longer considered good value for money.

A nine-week review of the project was launched after costs for the scheme were put £210 million higher than an originally agreed £711 million.

The review, carried out by UHL, Leicester City Primary Care Trust and Leicestershire County and Rutland Primary Care Trust, the East Midlands Strategic Health Authority and the Department of Health, found that the final figure could go even higher than £921 million.

The trusts are now working with UHL and local stakeholders to review acute and specialist services, the UHL board said in a statement.

"UHL will also conduct a stock-take of the existing hospital estate and clinical service configurations to identify any areas that require short-term investment to improve them whilst this review takes place," it added.

"If there is the need to invest money following that stock-take, the Department of Health has made provision, if needed, for a substantial capital investment to support it."

A Department of Health spokesman said: "All trusts taking forward a major PFI scheme must ensure that their local plans provide value for money and are in patients' best long-term interests.

"University Hospitals of Leicester NHS Trust has today decided that, due to significant cost escalations, it will not be proceeding with the proposed scheme."