All over the region gleaming new hospitals are being built with private funds - but are we simply storing up financial problems for the future? Health Correspondent Barry Nelson weighs up the arguments about the Government's Private Finance Initiative

IT was four hours before the nurse noticed the patient had died. The man, a terminally ill patient in his 40s, had been calling for assistance for ages but she was just too busy looking after all the others.

"He wasn't shouting, and everyone else was, and so I just didn't have time. There were four staff, two qualified and two assistants on for 32 patients and two of them were casual bank nurses. That's normal now. It's against everything you are trained to do. I came into nursing because I wanted to look after people."

This eye-witness testimony by a senior nurse at the new University Hospital of North Durham is anonymous because she didn't want to get into trouble.

Another unnamed nurse at the Durham hospital told a reporter: "I keep having to say, I'm sorry, you'll just have to wait. I've got three urine bags under my arm already and I'm trying to do the drugs, your bag will have to wait. Every day you say to yourself, God, what if that was my mum or dad."

These interviews, arranged by the health union Unison, highlight the stresses and strains experienced by front-line NHS staff trying to cope with ever-growing demands from an ageing population.

But according to Unison, the unhappy situation at the new £96m North Durham hospital is the direct consequence of the Government's controversial private finance initiative (PFI).

PFI has almost become a swear word in "Old Labour" circles, standing for what is seen as a creeping privatisation of public services.

Invented by the Conservatives in 1992, as a way to reduce the size of the public sector, it involved inviting private companies to pay for new infrastructure and then leasing it back to the public sector for a set period of time.

When Labour came to power in 1997 the new government seized on PFI as an ideal way of improving public services without increasing public spending. A way of spreading the cost of investment and making private construction companies carry the risk of running over budget.

But Unison, along with a number of academics, believe that PFI is a dangerous Trojan Horse, allowing the private sector a foothold in public services and diverting taxpayers money into the pockets of shareholders.

While it delivers shiny new hospitals in the short-term, the union argues that PFI saddles local health authorities and NHS trusts with a crippling burden of debt which inevitably results in cuts in services.

Built to replace the out-dated Dryburn Hospital, the impressive and well-equipped new hospital in Durham has too few beds to cope and within three months of opening is already putting out feelers to a private hospital group to see if a partnership can be forged to increase numbers.

To Unison and ideological opponents of PFI the capacity problems encountered at UHND highlight the folly of privately funded NHS hospitals. The union commissioned academics two years ago to rubbish PFI - and they came up with the goods, claiming that NHS trusts seeking to fund new PFI hospitals are inevitably trapped into a vicious circle of reducing costs to keep private shareholders happy.

But the Government argues that the controversial scheme is the quickest and most practical way to get desperately needed new hospitals up and running in areas which have been starved of good new health facilities for years.

Steven Mason, the tall, softly-spoken acting chief executive of North Durham Health Care Trust, has the responsibility for running the new Durham hospital.

For him the hotly disputed issue of PFI is irrelevant, arguing that the fact that the hospital was designed with too few beds is more a reflection of NHS fads and fashions rather than any deliberate desire to reduce costs.

The idea that PFI has forced him to cut the numbers of qualified nurses on his wards is firmly rejected, pointing to a recent independent staffing audit which concluded that the number of nurses at the hospital is roughly in line with similar NHS trusts elsewhere in the country.

But Robin Moss, the passionate, outspoken regional health spokesman for Unison who has called for a public inquiry into the way the Durham and Carlisle PFI hospitals have been funded - and the consequences of that funding for the quality of health care delivered to patients - has do doubt that PFI is to blame for the nurses' ills.

"PFI is a really bad deal for patients, an appalling situation for staff and a disaster for the people of Durham and Carlisle," says Mr Moss, who is based at the Unison regional office in Newcastle.

"I dread to think what will happen in the winter if this hospital cannot cope with demand in the summer. These hospitals have been sold to their local communities as state-of-the-art facilities, which will meet all their health needs. What has been revealed are almost mirror image stories from both hospitals of sloppy build and design faults, resulting in appalling conditions for patients and staff, the inability of staff to cope with care demands because of cuts in staffing levels that were made to be able to afford the cost of private finance, bed cuts, long waits for beds and care and, in both places, proposals to build new private hospitals on the sites of the new PFI hospitals."

For Mr Moss, what is worse is that the current situation was foreseen, not only by Unison, but by Durham MP Gerry Steinberg and even doctors employed by the trust.

Recently, the reality behind those warnings was confirmed by a County Durham and Darlington Health Authority report which predicted that a lack of beds meant that the gleaming new hospital would be unable to meet targets on waiting lists, surgery and accident and emergency waiting times.

In his view the Government should mount a public inquiry to investigate the circumstances surrounding the decision to build the hospitals with private money and the consequences which have flowed from that decision.

He also hopes that the House of Commons Health Select Committee pays particularly close attention to the two Northern hospitals when the MPs begin their own investigation into PFI funded hospitals later this year.

On the face of it, reports of teething problems at the new hospital, which have appeared in the national press, suggest that the new hospital is veering from crisis to crisis against the contentious backdrop of PFI.

But the hospital management say most of the allegations either have no foundation or are practical problems which can be quickly alleviated.

"We are unusual because of PFI. A lot of the operational pressures are being blamed on private financing but in reality it is because demand for health care is going up," says Mr Mason.

"Irrespective of whether the new hospital was privately or publicly funded we would be having the same discussions right now about how we are gong to bring down waiting times to the level set out in the NHS National Plan for 2004," he says.

Options include a separate unit on the site, which could be funded through PFI or through the public sector; an extension to the new hospital or a link-up with the private sector.

"We would have to take a detailed look at all the figures to find the best value for money," says Mr Mason.

When an extra eight beds open at the end of August the current pressures should ease slightly but the answer is undoubtedly to expand the unit's overall bed capacity.

Unison's call for a public inquiry cut no ice with the Department of Health's press office last night.

After seeing an e-mailed copy of Unison's press release on the Durham trust a press officer said: "The call for an inquiry is absolute nonsense. PFI has allowed the NHS to mount the biggest and fastest hospital building programme in decades. We are building more than 60 new hospitals and every project is over £25m. We are talking about more than £6bn here."

While the battle over PFI rages, it will be ordinary patients who will discover for themselves the reality behind the rhetoric.