“Foolhardy” to claim new hospital plan will be cheaper than old one, says Minister

Monday 30 January 2023

It would be “foolhardy” to give a definitive guarantee that the new multi-site plan for upgrading the island’s health facilities will cost less overall than the previous £800m Overdale project, according to the Treasury Minister.

Deputy Ian Gorst made the comment at a Corporate Services Scrutiny Panel hearing on Friday, after he was pressed by Deputy Lyndon Farnham assurances over the cost of the new scheme, which will be delivered in phases, in comparison to the previous government's 'Our Hospital' vision.

'Our Hospital' was officially thrown out by the government following a £30,000 review led by Infrastructure Minister Tom Binet and 'Expert Adviser' Alan Moore, who concluded that creating new health facilities "over two or more sites" - primarily at Overdale and Gloucester Street/Kensington Place, where work on homes was halted in anticipation over summer - would provide the "best opportunity to make the scheme more affordable and appropriate”.

Pictured: Ministers halted Andium's work to build homes at Kensington Place in case the land was needed for future hospital expansion last summer.

However, Deputy Lyndon Farnham - who was previously the Minister in charge of the project - has repeatedly challenged the findings of the review.

Rejecting suggestions that the decision to scrap the scheme was political, Deputy Gorst said in response to Deputy Farnham's questioning on Friday: "The decision to not go ahead with the contract and the design and delivery partner was... entirely premised on the fact that the economic circumstances had changed and that that contract [for] that hospital could not be built for £804 million.

"It was £920m at the best with a fair wind and no change in interest rates.

"We know that even during the course of what would have been a more prolonged negotiation – that's providing the relationship actually stood up and one wanted to continue with that ... partner – it couldn't be delivered."

Deputy Gorst was also pressed by the panel's Chair, Deputy Sam Mézec, about whether there had ever been a serious political conversation around the Council of Ministers' table about reverting to the States Assembly to ask for a new spending limit to proceed with the Overdale development.

"Or were the discussions... predicated on an assumption that you weren't going to consider that option seriously?" Deputy Mézec asked.

"They were predicated on an assumption which was... that there should be, because of economic circumstances, a review of the current scheme. That's my position. I have been clear about that. That's why I supported the review being undertaken," Deputy Gorst responded.

Following the hearing, Deputy Mézec commented: "We thank the Minister and his Officers for their responses to our questions. We will continue to closely scrutinise the major capital expenditure that is Hospital financing."