The National Health Service (Private Finance) Act 1997 (c 56) enabled NHS trusts to borrow money or rent out property in loan agreements with the private sector, to expand their facilities or build new buildings. As it enabled a major kind of private finance initiative, it has been highly controversial.

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Section 1^[1] provides:

1 Powers of NHS trusts to enter into agreements

(1) The powers of a National Health Service trust include power to enter into externally financed development agreements.

(2) For the purposes of this section, an agreement is an externally financed development agreement if it is certified as such in writing by the Secretary of State.

(3) The Secretary of State may give a certificate under this section if—

(a) in his opinion the purpose or main purpose of the agreement is the provision of facilities in connection with the discharge by the trust of any of its functions; and

(b) a person proposes to make a loan to, or provide any other form of finance for, another party in connection with the agreement.

• UK enterprise law