THERE is no doubt that many hundreds of hospitals and schools would not have been built without private finance initiatives.

PFI was a Conservative policy adopted by Labour when it came to power in 1997 and sees public buildings constructed, financed by loans from private investors.

In theory, PFI makes sense.

In practice, it has saddled hospitals and schools with repayments that would make the most ruthless loan sharks blush.

Worcestershire Royal Hospital is a prime example.

Worcester was desperately in need of a new hospital as the 20th century came to a close.

The ageing Royal Infirmary was no longer fit for purpose.

So a PFI contract was signed in 1999 and the new hospital opened in 2002.

It cost £82 million to build.

But the latest estimate of repayments to the investors who loaned the cash over a 30-year deal stands at £852 million. That figure is not a misprint.

The cost of the WRH to taxpayers is 939 per cent more than the hospital cost to build.

Another 10 hospitals could have been built for the money the WRH will eventually cost the public purse. It is a dreadful deal and we cannot think of a worse example of bad value for money in the public sector.

The £852 million cost is, of course, just an estimate.

With 19 years remaining on the PFI contract for the hospital it could end up being even more.

After all, the estimated repayment has increased by £132 million in just 14 months.

We would be amazed if anyone is still willing to defend the WRH deal.