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New hospital 'must be built now' to avoid NHS competition

New hospital 'must be built now' to avoid NHS competition

Thursday 09 September 2021

New hospital 'must be built now' to avoid NHS competition


Jersey will face higher building and borrowing costs - and potential competition with the NHS in securing contractors - if the new hospital project is delayed any longer, according to the Assistant Treasury Minister.

Deputy Lindsay Ash’s warnings came just a month before the States Assembly is due to debate the Government’s funding proposals for the £804.5m project at Overdale.

Speaking to the Future Hospital Review Panel, which is currently scrutinising the business case for the new hospital, Deputy Ash was unable to directly answer questions from the panel members about the proposed budget and funding, but, alongside Our Hospital Political Oversight Group member Deputy Rowland Huelin, stressed that the project must not be pushed back.

One of the questions raised by the Panel was whether a budget of £804m - including contingency funding - was appropriate for Jersey. They said that none of the submissions they had received had been supportive of the figure.

Deputy Ash assured that £658m (as a build cost) was the “going rate” for the type of hospital the Government is looking to build, adding that the Treasury team is “very, very keen” for the project not to exceed this amount, a case which they made “as strongly as they possibly could” to the team in charge.

“To get the ball going this time, this is the going rate,” he said, addressing queries as to why the budget had doubled since the plans to build the hospital on the Gloucester Street site.

“It’s a very different offering to Gloucester Street; Gloucester Street had no mental health facilities, this one is going to have everything in one place. Costs have moved up substantially since last time.”

Deputy Ash then said that if the ‘Our Hospital’ project was delayed by a further four years, it would be even more expensive, citing inflation on building costs and difficulties in finding contractors “after they have been let down twice."

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Pictured: Deputy Ash said it would be difficult to find building contractors if the project is delayed.

“We say it’s very important we do this now, and we fund it as soon as we can because interest rates are at a low level,” he told the Panel.

“If we don’t, something that is worth considering is, we are ahead of the NHS on this game at the moment. They are planning to build huge numbers of hospitals very, very shortly, we are just, not enormously, but we are certainly months ahead of them, if we delay this project we will be running into traffic with the sort of building requirements that they have, which will make it even more difficult to revisit.” 

Following questions from Deputy Inna Gardiner about the minutes of the Clinical Users Group – the group of medics that has helped the project team draw up the design specifications for the hospital – Deputy Huelin couldn’t say whether they had even been recorded or not.

“I am confident that clinicians have been engaged at every single level, I don’t know why [the minutes] haven’t been released and I don’t know if they were taken, so I can’t comment,” he said. 

When asked what evidence he had seen to feel confident that clinicians support the project, he said he had never had any reason to doubt it and had done his “due diligence behind the scenes."

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Pictured: It is unclear whether minutes of the meetings of Clinical Users Group were ever recorded.

Neither Deputy Ash or Huelin could explain why the Outline Business Case didn’t include a comparison with a ‘mid-range’ hospital, as required by HM Treasury Green Book - a key document setting out how governments should approach large-scale public investments. 

“Why would you want to compromise what has been from the beginning a clinically-led project and build something might be medium or average?” Deputy Huelin said. 

Later on in the hearing, Panel members questioned how the Political Oversight Group had made their funding decisions, but the answers were not forthcoming. 

Deputy Ash justified borrowing as the best solution due to the currently low costs involved, before stressing again how further delays would affect the project.

Treasurer Richard Bell warned that if the States Assembly does not approve the Government’s proposition, the project will be put at risk and put on hold “until such a time an alternative funding strategy has been approved."

Deputy Ash then added that if the project does not move forward, it will cost millions annually to maintain the current hospital.

“It’s generally been suggested, to us as the Political Oversight Group, that the costs of keeping the current hospital open from 2026 will be £50m and that’s just keeping it in the current state.”

Professor Ashok Handa, the Clinical Director for the new ‘Our Hospital’ project, previously warned the Panel that the current hospital will not be usable after December 2026 as the operational daily risks and the clinical risks would then be so significant. 

READ MORE...

Government planning to borrow full £800m for new hospital

Pressure grows on new hospital team to explain costs

INSIGHT: What services will and won't be in the new hospital?

FOCUS: A first look at the new hospital designs...

INSIGHT: Injecting art, culture and Jersey into the new hospital

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Comments

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Posted by Scott Mills on
Can you smell it too?
Posted by JohnBaker36 on
Q: Why is this Government budgeting £800m+ for the New Hospital when it could easily be built for less than £500m? Check your figures, please? You are quoting London prices x 2 !!
Posted by David Moon on
This hospital saga gets more bizarre by the day. Is it only the NHS who build hospitals are they not being built all over Europe? When we looked into building costs for the replacement of the Generla Hospital in Gloucester Street for circa £450 million it was found that hospitals were being built in France for half that figure. One in particular near St. Brieuc was just being completed having been designed and built in under a year. As the contractor for the proposed hospital at Overdale is a Jersey contractor with a Spanish associate it is difficult to understand how the NHS programme will affect it.
Posted by gordon le claire on
must do this must do that well sorry it is taxpayers money you want to waste and to say if you vote against it you will not get a builder in the future. sorry but money is money and you will always be able to employ a company to build a great hospital at a decent price
Posted by Mike Pitman on
In words written for him by his puppet master Senator Farnham, Deputy Ash said blah blah blah blah et. etc.
Posted by Martin on
On the subject of HIGHER borrowing costs have we ( the very general public ) been told how much the repayments are on the £800 M loan for the Hospital?
Posted by Jon Jon on
Have they factored in the cost of sand imports to build this graceful palace! Nuts States we have now throwing us all into debt!
Posted by Forza Danaos on
Thanks to the yesterday's hearing we all now know why there have been so many doctors and nurses quitting their jobs recently.
'Senator Kristina Moore, panel chairwoman, asked about the problems with staff retention at the Hospital, but Deputy Ash replied: ‘The reason we can’t retain staff is that they have to work in a crumbling building that is not fit for purpose.’
It comes as a great relief. Apparently the concerns raised in the recent BE Focus feature were not true. It is not about the toxic culture, not about bullying nor management by fear. It is mostly caused by the ageing facilities.
Posted by Esporta Johnson on
Clinically-led without any proof sounds bizarre.
Perhaps with an expense of £1.4Bn (including the low borrowing costs) the new hospital team should publish the names of clinicians who offered support to the one and only option at Overdale. Exclude the directors and others employed within the new hospital team. If the list was lost run a survey among clinicians and publish the results.
We also need to understand how spending 1.4Bn will help us address our chronic shortage of nurses and doctors. Hospital is not just about the building, the atrium and the views. Most of all, it is about competent, well motivated people working there and the leaders who understand it. It is also and perhaps first of all about PATIENTS. I could not find the word ‘patients’ used in the above or previous explanations from the new hospital team. They keep talking about money, about site, and about consequences of not rushing the approval through. How will spending £1.4Bn out of the public purse benefit patients compared with a more modest hospital built at £400-600M (total cost) range and investing in attracting top specialists, experienced nurses and equipment that would expand the range of procedures offered locally? Should we invest more in improving the access to primary care? In prevention and promoting healthy lifestyles?
Time pressure is a well known trick applied by used car salesmen and by e-mail scammers. The panel should demand all the answers, all details including alternative scenarios. Given that the people leading the project claim to have vast experience in planning and delivering multiple hospitals in the UK they should be able to answer all these questions. No investment of such scale would ever be approved in the UK or continental Europe without answering all the right questions.
Posted by Roy Dean on
The Fear Agenda Card
Posted by Aston Francis on
Statista.com provides benchmark analysis for the costs of building new hospitals in Paris back in 2018. General Hospitals (like ours) represent the highest cost of 3.502 Euros (£3000) per sqm. Our new hospital aims at 50.000sqm which gives £150M for the construction itself. We should accommodate for the inflation, labour cost increase since 2018 and possibly for Jersey being more expensive place than Paris. Add the costs of site acquisition, roads etc - we should still stay within the previous ballpark of £500M range. The difference is huge, given that the cost of borrowing against the latest budget brings the total bill to the astonishing £1.4B.
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