A new £353 million hospital will deliver a “medical and economic” boost to the West Midlands after a PFI deal was reached.

The Chancellor of the Exchequer George Osborne has announced approval for the 670-bed Midland Metropolitan Hospital to be built on vacant industrial land in Smethwick.

The investment was welcomed by many, although there are some concerns about the private finance deal, with MP John Spellar (Lab Warley) saying he hoped lessons had been learned on private finance initiatives (PFI).

The 670-bed Midland Metropolitan Hospital will replace large parts of Sandwell Hospital and City Hospital in Winson Green when it is built in 2019, although some services will remain.

Mr Spellar told the Post: “This is vital for Sandwell and for the West Midlands. It is important from a medical point of view but will also be a huge economic boost to the area, using previously run down industrial land.

“We have to make sure that the health authorities ensure that local youngsters have the opportunity for training.”

Sandwell and West Birmingham Hospitals NHS Trust said it had begun the process of looking for a construction partner to build it as part of the governments revised PFI scheme.

Under PFI 2 guidelines the taxpayer takes a share of up to 49 per cent in new projects with the rest coming from private investors.

The Trust said £100 million of public money would be used to build the new hospital.

Graphic impression of how the Midland Metropolitan Hospital will look.
Graphic impression of how the Midland Metropolitan Hospital will look.
 

Mr Spellar added: “It depends if they have learned lessons from the past about PFI, when private companies enjoyed all of the benefits from an interest rates drop.

“They need to have learned from that experience, but the truth is many companies don’t necessarily own their offices – they’d be owned and managed by another company.”

Construction work on the hospital is expected to begin on a site at Grove Lane in Smethwick in 2016 and finish in 2019.

Mr Osborne said: “This ambitious package will ensure that patients across the West Midlands continue to benefit from access to world-class acute treatment and cutting-edge facilities.

“It is because of the difficult decisions we have taken as a government that we have been able to protect healthcare spending, and announce new facilities like the Midland Metropolitan Hospital.”

However, Ravi Subramanian, Unison’s West Midlands regional secretary, said: “While a new hospital is welcome because of the obvious benefits to health but also for the potential social and economic benefits it could bring.

“However, it is essential that George Osborne ensures it is properly funded and not just a pledge made by a government struggling to hold on to power as a general election draws ever closer.

“Under this Tory-led government we have seen maternity units closing their doors to women in Labour and waiting lists for routine operations break the three million barrier for the first time since 2008.

“Coupled with this the Tory government are showing signs of being ever increasingly keen to privatise our NHS.

“This is why it is essential that the building of any new hospital is fully funded and does not bring about a decline in other services or privatisation in other areas across the West Midlands.”