£466 million Future Hospital budget "excludes important items"

Tuesday 18 April 2017

Cost estimates for the building of the £466 million future hospital fail to include a number of “important items” including the demolition of redundant blocks and a potential car park extension.

The findings come as the result of a Corporate Services Scrutiny Panel report published last week, which showed that the multi-million build cost - £392 million plus a £74 million “risk allowance” - would exhaust the States’ “borrowing” capacity if funded, as planned, through a bond.

Comparisons with nine other similar UK hospital construction projects revealed Jersey’s Future Hospital to be at £5,030 per metre squared – the third most expensive option and £505 more than the average spend per square metre.

But these figures did not take into account the expense needed to extend Patriotic Car Park to accommodate more patients, visitors and staff, even though the Panel was told that part of the funding was expected to come from the Hospital budget in a hearing with the Minister for Infrastructure.

Demolition of the redundant 1960s and 1980s blocks facing the Parade following the new build’s completion was not accounted for, as well as the leasing costs for the planned new off-site catering facility and the costs of rehousing health staff accommodated in Westaway Court with a third-party provider.

Funding for the 287-bed new Hospital is set to appear on the States agenda today, with the Corporate Services Scrutiny Panel arguing that it should instead be financed through the States’ so-called ‘rainy day fund’ rather than through borrowing, which could be derailed by the effects of “Brexit and the US political scene”.

The Panel’s advisor, Opus Corporate Finance, wrote: “The future for the States of Jersey must be considered more uncertain now than at any time in the last seventy years.”

Deputy John Le Fondré, Chairman of the Panel, commented: “We have released our report in time to give States members the ability to review our conclusions, before the debate on the 18^th of April. This report... gives [States] Members an important opportunity to decide which funding mechanism is in the best interest of the Island and future generations in this time of economic and external political uncertainty.”