WORCESTERSHIRE'S privately financed flagship hospital at Worcester is costing the health trust £22 million a year.

Health boss, John Rostill, said the PFI method of funding was the only way such huge capital developments could be undertaken.

Furthermore, when the "mortgage" is repaid in another 27 years, the county will own a brand new hospital - because part of the contract includes the updating and renewal of equipment every five to seven years.

"Through PFI, the country has seen the biggest hospital building programme ever," said Mr Rostill, chief executive of Worcestershire Hospitals NHS Acute Trust.

"A lot of the problems of the past have been in trying to provide 21st century treatment in 19th century hospitals."

He denied that the additional payment which the trust had to make when bed occupancy levels went higher than 90 per cent was a burdensome surcharge but, rather, covered the extra cost of consumables like meals and laundry at the Worcestershire Royal and amounted to around £600,000 a year.