COUNCIL cash could be used to help hospital bosses faced with £53m PFI yearly repayments.

Private finance initiatives (PFI), help fund big public sector building projects, such as hospitals, which otherwise it would take years to raise capital for.

It means the private contractor can own the building for anything up to 35 years, while the public sector pays interest on the cost of construction, as well as paying maintenance costs.

The Oxford University Hospitals Trust (OUH) faces an annual bill of about £53m to fund repayments on the private loans taken out to pay for developments such as the Children’s Hospital and Oxford Cancer Centre.

The yearly amount does not just represent the cost of the building but also includes payments to the contractor to provide services such as security and maintenance for the buildings.

But under a motion tabled by Green councillor David Williams, Oxford City Council could use investment money to help the hospital out of ‘elements of the PFI contract’ .

He said: “PFI repayments have high interest on their repayment, some around nine or 10 per cent.

“Whereas we normally invest in Marks & Spencer or whoever, why don’t we invest in the local health care trust? We could help them out of certain sections of the PFI agreement.”

Mr Williams said Northumberland County Council had recently provided a loan to Northumbria Healthcare Trust to secure savings from its PFI contracts, helping buy out part of the contractual obligations.

Oxford City Council reserves annually reach about £2m.

If he can garner enough interest in his plan, Mr Williams said he would approach the county and district councils to see if they were willing to get on board.

Deputy council leader Ed Turner said it sounded like a good idea in principle. He said: “I will consult with the rest of the group and we will ask our officers to investigate.”

Last night the OUH said it had so far not been approached by any party regarding the plan and would not comment further.

PRIVATE FINANCE INITIATIVES Private Finance Initiatives (PFI) hand financing of large-scale buildings or infrastructure schemes, such as new schools and hospitals, from the Treasury to developers.

The company owns the building and leases it back to the public sector over a period of a minimum of 25 years.

The benefit to the public sector is that there is no up-front burden on the taxpayer. The benefit to the private sector is that the repayment interest rates are usually high.

Some companies charge interest rates of up to 70 per cent.

PFI projects include the £20m Oxford Children’s Hospital and JR West Wing, the Oxford Cancer Centre, and the Nuffield Orthopaedic Centre.