In 1948, the National Health Service (NHS) was created out of the patchwork of healthcare services previously provided on a limited basis by charities, mutual funds and local authorities to offer a comprehensive ‘cradle to grave’ service. Services would be integrated and planned on a regional basis and be available to everyone, free at the point of use and funded out of general taxation not social or individual insurance. The funding for the NHS would come from the ministry of health, but budgets would be held at regional level. The NHS would be structured as a public corporation, which owned its hospitals and equipment. By far the largest element in expenditure terms was to be the hospital sector, but at its inception, the NHS inherited an old and inadequate stock of hospitals unequally distributed around the country. The official historian of the NHS, Charles Webster (1988), called it a ‘ramshackle and largely bankrupt edifice’. The responsibility for financing its improvement and expansion would transfer from local authorities to the ministry of health and capital expenditure would be provided in the form of central government grants. Sixty years on, the situation is very different. The hospitals have themselves become business units or Trusts, providing healthcare on a fee per service basis paid on behalf of patients by the primary healthcare providers, now organised as Primary Care Trusts (PCTs), with their own budgets. In the context of capital expenditure, it is not the Minister for Health but the Hospital Trusts that are responsible for their capital investment programme. The predominant mode of financing new hospitals is the Private Finance Initiative (PFI), which has been used to launch what the government describes as the largest new building programme in the history of the NHS. Under PFI, a Hospital Trust commissions the private sector to build a hospital that will provide a specified level of activities, maintain it and operate all nonclinical services for a 30 year period, the precise requirements for which are