The previous Government planned to increase spending on the NHS in England next year by £775 million. That would have meant a reduction in real terms. Labour promised at the general election that NHS spending would grow in real terms year on year. We are keeping that promise. Next year's total increase of £1,775 million amounts to real-terms growth of 2.35 per cent.—more than the real-terms growth in the last two Tory years put together.
Nevertheless, next year's settlement is very tough. It will, however, be augmented by the savings that we intend to make by reducing bureaucracy, waste and fraud. I look forward to working with NHS staff to do that and to improve patient care at the same time. That is what NHS staff and patients want. It is what the taxpayer wants and it is the Government's job to help to achieve it.
Part of the Government's contribution is to ensure that NHS staff have decent, well-equipped hospitals in which to work. The previous Government decided that new hospitals should be built using private sector money under their private finance initiative which was first announced in 1992. Under the Tories, all hospital building schemes had to be PFI tested. Little or no advice was issued to trusts, which were allowed to go their own way. Advisers and consultants were recruited as and when the trusts felt like it. No effort was made to establish whether the legal status of the trusts met the needs of private sector partners.
Tory Ministers trumpeted the success of the PFI. Hospital building schemes were announced, re-announced and announced yet again. The Tories talked a lot and they spent a lot—30 million quid on consultants. But even now—five years after the PFI was launched—not a single PFI-financed hospital has been started. Not a brick has been laid.
When we took over in May, we were pledged to sort out the mess. That is another election promise which we have kept. The Tories talked about building hospitals; we will actually get them built.
I asked the Minister of State, Department of Health, my hon. Friend the Member for Darlington, to sort out the mess and he has done so. After a great deal of hard work by my hon. Friend personally and by officials in the Department of Health, the NHS Executive, the regions and the trusts, some order has been established. Priorities have been thrashed out and decisions have been taken. As a result, we were able to announce last Thursday a £1.3 billion hospital building programme—the biggest ever programme of new hospital building.
The programme includes the following 14 hospital projects: Norfolk and Norwich, Dartford and Gravesham, North Durham, South Buckinghamshire, Calderdale, Carlisle, Hereford, Wellhouse, Worcester, Bishop Auckland, South Manchester, South Tees, Swindon and Bromley. We expect building on all 14 new hospitals to begin within the next 18 months. Some will commence as soon as the National Health Service (Private Finance) Bill is enacted.
Progress will be strictly monitored to ensure that the schemes are delivered to price and on time. I realise that those involved in schemes that lost out in this round will be disappointed, but, as things stood, everyone was losing out. The whole system was in shambles. There were no national priorities and no national criteria. No decisions were taken.
We have selected the schemes that contribute most to the health needs of their locality and can be expected most rapidly to provide affordable, value-for-money new hospitals. Schemes that have not been given priority in the review will now be considered as part of a national capital investment programme involving public and PFI-funded projects. Some may be given the go ahead by next spring. The PFI will augment the Treasury's capital allocation for the NHS of £1.35 billion in 1998–99 and £1.39 billion for 1999–2000.