Alan Milburn, the Health Secretary, has announced an expanded role for the private finance initiative in the new programme of modernisation for the NHS.

Speaking at the King's Fund in London last week, Mr Milburn signalled greater co-operation between the NHS and private sector in providing "new innovative forms of intermediate care" for elderly patients who do not need acute hospital beds. This would lead to an end to the policy that has seen a dramatic decline in NHS beds over the past 40 years. There was "no reason" why the NHS should not collaborate with the independent sector in developing this care for patients said Mr Milner, adding that ministers would be consulting on that issue.

There will be a requirement for new hospitals and buildings as the Health Secretary confirmed: "In many cases we'll have to build new facilities. There will be a new role for private finance here although of course the care that is provided will be free."

Anna Lagerkvist