Sunday 15 December 2024
Select a region
News

FOCUS: £234m for a project yet to lay a foundation stone...and may take 12 more years?

FOCUS: £234m for a project yet to lay a foundation stone...and may take 12 more years?

Wednesday 20 September 2023

FOCUS: £234m for a project yet to lay a foundation stone...and may take 12 more years?

Wednesday 20 September 2023


A Minister who has been involved in the past three new hospital plans has shared his "frustration", as it emerged £234m has now been spent or allocated to a project that is yet to lay a foundation stone.

Following the release of the draft Government Plan yesterday, which allocates £52m to the ‘New Healthcare Facilities Programme’ during 2024, Express looked into where we are up to with future hospital planning, spending and the timeline...

Hey, big spenders...

The draft Government Plan's allocation of £52m is on top of the £51.5m set aside in 2023.

Up to the end of 2022, £84m had been spent on the Our Hospital project.

Earlier this year, the Comptroller and Auditor General found that £130m had been spent on the project since 2012 – with just shy of £40m being "abortive" costs.

This means that £234m has been spent or allocated to a project that is yet to lay a foundation stone.   

However, £15m of that money was spent transforming the former Les Quennevais School into the Enid Quenault Health and Wellbeing Centre which opened this summer.

Enid_Quenault_room.jpg

Pictured: The £15m Enid Quenault Health and Wellbeing Centre opened at the former Les Quennevais School this summer.

Another £35m is tied up in acquired assets, including properties on Westmount and a large space in Kensington Place.

What will the latest £52m injection do?

The Government said that the £52m allocated for 2024 will “allow for the development of the necessary design and planning work to a more advanced stage," adding: “We will continue to monitor expenditure carefully while delivering the necessary work to provide a robust proposition for the States Assembly to debate in summer next year.” 

The £52m will take the project to June or July next year, when that debate – which will seek Members’ backing for a new acute hospital at Overdale, including funding proposals – will be held.

In total, the Government is expected to spend £70m on the New Healthcare Facilities Programme next year.

Although they are only estimates at this stage, the Government say that the total cost to build that facility and make “meaningful progress” on future phases – including an outpatient facility in Kensington Place and Health Village in St. Saviour – will be no more than £710m, including £675m during the four years of the 2023-2027 Government Plan period. 

Minister "just as frustrated as everybody" 

Treasury Minister Ian Gorst said he shared the frustration of islanders, who had waited more than a decade for a new hospital to be built.

Kensington Place 850x500.jpg

Pictured: £35m is tied up in acquired assets, including properties on Westmount and a large space in Kensington Place.

“I’m as frustrated as everybody,” he said. “This is what happens when people say: ‘Okay, we need a new hospital but I don’t like your ideas and you don’t like my ideas so we just move from one idea to the next.'

“I understand entirely why islanders are so frustrated with where we are. So, what we’ve done in this Government Plan is say that we think that States Members need more detail.

“We’ll work on the business plan and a properly thought through funding strategy, which remains difficult in a high-interest-rate environment.

“We need this £52m to keep working and to get to the next stage of technical detail but we’re giving an indicative figure which says that our current best estimate for an acute facility at Overdale is £675m. And then you need more money to start thinking about Kensington Place as well.”

Ian_Gorst_in_office.JPG

Pictured: “I’m as frustrated as everybody,” said Treasury Minister Ian Gorst.

He added: “I tell my colleagues that the most important thing is that they get a spade in the ground during this term of office because although islanders are really frustrated with all the money spent to date, I think they are more frustrated with the fact that they don’t have anything to show for it. 

“And until we start having something to show for it - until we get a spade in the ground - no politician can honestly say that the project is going to be delivered. So, the focus has to be getting that spade in the ground. 

“I do think it can be done but the determination that is needed shouldn’t be understated.”

Borrowing cash to get on

Funding for the healthcare facilities is coming from a £300m Revolving Credit Facility – in effect, a giant 'overdraft' for Government – with an approved annual borrowing ceiling of £142m over the four years of the plan.

The £52m allocated for next year will come from the facility.

Financing the borrowing will cost £7.8m in 2024.

In 2024, the Government has committed to bring forward a standalone proposition to seek approval for delivery of Phase 1 of the programme and its financing. 

The first phase includes:

  • Continue ‘high-level’ design and planning work for the whole programme of New Healthcare Facilities.

  • Continue demolition works at Overdale, which are planned to start before the end of this year.

  • “Improve” the Kensington Place site, by putting temporary staff facilities there

  • “Deliver any decant facilities necessary for the above works”.

The total capital cost for new healthcare facilities is set to be £70m in 2024, £112m in 2025, £179m in 2026, £314m in 2027 and £35m in 2028 and beyond, making a total of £710m.

Including money already spent in the search for a new hospital, as identified by the Government's spending watchdog, the cost of opening a new acute hospital at Overdale and advancing plans for Kensington Place and St. Saviour will be more than £890m.

Done in eight years...10 years...12?!

Earlier this year, the Government said that it expected its multi-site programme would finally reach completion by 2031 – five years later than the deadline for the previous £800m plan to build a new hospital at Overdale.

However, Infrastructure Minister Tom Binet, who is the political lead of the programme, recently said he was looking at the project now taking place over 10 to 12 years – meaning that the timescale could be pushed back as late as 2035.

"I'm just looking at the hospital project over ten or 12 years which may stretch to another year or two because of the funding situation. We're putting this in, we're looking at putting two primary schools in, we're looking at doing the blue-light facilities," he told Scrutineers.

On the release of the Government Plan yesterday, however, he said he was comfortable and confident about the work that had been done and the plan ahead.

Tom Binet 850x500.jpg

Pictured: “We have kissed goodbye to the past," said Infrastructure Minister Tom Binet, political lead for the New Healthcare Facilities Programme.

“We have stuck to the plan, taking a firm, consistent and stable approach,” he said. “We have kissed goodbye to the past and islanders can look forward with confidence to this programme now happening.

“The work which the lean but highly effective team behind the programme has done has been robust and kept costs to a minimum.”

He added that the new project would be cheaper than the former Our Hospital single-site option, which would have cost £1.1 billion and been 130 beds short.

Work to begin to demolish buildings at Overdale began this week with contractors starting to remove asbestos from empty units.

Sign up to newsletter

 

Comments

Comments on this story express the views of the commentator only, not Bailiwick Publishing. We are unable to guarantee the accuracy of any of those comments.

You have landed on the Bailiwick Express website, however it appears you are based in . Would you like to stay on the site, or visit the site?