Health and Social Care (HSC) announced this week that it is scrapping two major projects with a third delayed, having already spent £61million on them.
The already-started hospital extension has been scrapped and won’t progress any further, while the IT-upgrade is also being stopped.
There’s been an update on when the brand-new intensive care unit – already built at the Princess Elizabeth Hospital – will be signed off for use, but it’s an ‘aim’ not a definitive date.
Express has broken down the projects to work out what we’ve paid for each one and what stage they were at before the plug was pulled.
Our Hospital Modernisation: Phase 1
- ‘Phase 1’ estimated cost – £32m
- Current estimated cost – £39.3m
- Total amount spent so far – £33.5m
- Additional budget allocated – £3.05m
In 2019 we were told that Health and Social Care wanted to spend £93.4m upgrading the Princess Elizabeth Hospital.
Then-Deputy Heidi Soulsby was President of HSC when she said the work needed to be carried out “before it is too late” and the demand for services outstrips the facilities available.
Covid hit the following spring and the island spent many millions of pounds dealing with that, but undeterred, HSC appointed Rihoy and Son to start work on the ‘essential upgrades’ early in 2022.
At that time, we were told the work classed as ‘Phase 1’ would cost approximately £32m.
In total, by July this year, £33.5m had been spent on Phase 1 of the hospital modernisation project – but the work is not finished yet.
As well as the un-used CCU and Post Anaesthetic Care Unit, a new electricity substation and a new Electro-Biomedical Engineering workshop have all been built within the hospital grounds. But with more work still to be done, HSC now says the total forecast spend on Phase 1 is £39.3m – including “additional works and other ancillary costs”.
The CCU alone might need another £485,000 spent on it to resolve defects – but that is still being investigated.
P&R has given HSC an additional budget of £3.05m to cover the cost of the necessary work, including a £610,000 contingency to complete the remaining additional works on the Critical Care and Post Anaesthetic Care Units.
“The Committee has directed that the remaining remedial and additional works are carried out expediently and carefully to bring the facilities into safe use as soon as possible and ensure any remaining issues are resolved,” said HSC in a statement published earlier this week.
Under this direction, HSC is aiming to have the CCU in use during the summer of 2027.
Our Hospital Modernisation: Phase 2
- ‘Phase 2’ initial estimated cost – £130m
- Latest estimated cost – £273m
- Estimated amount spent so far – £5.9m
While work was ongoing on Phase 1 of the hospital modernisation plan, a financial bombshell was dropped on the States.
With funding agreed for Phase 1, the States were looking ahead to Phase 2 during the autumn of 2023, when the then-President of HSC, former-Deputy Al Brouard told Express that the work needed to go ahead, and he pleaded with the States to fund it, which was agreed with a price tag of £130m.
The following year it was revealed that costs had escalated, far beyond what HSC had been granted by the States, and that the politicians on HSC hadn’t known because civil servants had kept this important information to themselves.
Then-Deputy Brouard made impassioned pleas to retain the funding allocated for the project saying the work was about much more than just cost – even though it was now estimated to cost around £273m.
Today’s HSC – led by retired doctor and MSG Partner Deputy George Oswald – has now concluded that Phase 2 can’t go ahead because it is “unaffordable”.
The work had already been split into Phase 2A and 2B to try and get it over the funding line, with Phase 2A to include a new operating theatre and surgical capacity, modern maternity facilities, and supporting infrastructure.
HSC says “these improvements remain an important part of the long-term vision for healthcare services in the Bailiwick,” but ultimately, the work has been stopped because we can’t afford it.
“The Committee believes continuing to develop a proposal that cannot realistically be funded within the cost envelope agreed by the States would not represent good value for taxpayers’ money,” said HSC.
“The latest cost estimate for Phase 2A alone indicates a total projected cost of approximately £273 million. This is the latest estimate of the full cost of completing the project through to delivery and should not be confused with the amount spent on the programme to date, which is projected to be £5.9 million including all costs to close-out the current programme.”
The cost increase has been blamed on multiple factors, including inflation since 2023, updated construction market assumptions and procurement costs, more comprehensive assessment and pricing of project risks and contingencies, and refinements to the design and technical requirements identified through the development process.
The £5.9m that has already been spent covers:
- Around £1.9million on the original design development.
- £1.7 million on programme costs to develop the original Phase 2 Outline Business Case.
- £0.2 million on the value-engineering exercise that informed the Phase 2A and 2B approach.
- £1.7 million on the development of revised designs and the drafting of the associated Outline Business Case for Phase 2A.
- A further £0.4 million was the cost to complete the close-out of current work, bringing total expenditure to approximately £5.9 million.
HSC says this money has not been wasted, and has instead “generated valuable evidence and analysis that will continue to inform future health and care infrastructure planning, including assessments of clinical demand, service capacity, estate constraints, infrastructure requirements, design options and project risks”.
Electronic Patient Record Programme
- Initial budget for Phase 1 – £20m
- Initial budget for total project – £24m
- Total amount spent so far on Phase 1 – £23.71m
- Additional estimated spend needed on Phase 1 – £450,000
When the States first backed HSC’s plans to digitise all of our patient records, the project was said to be costing “around £15-£20m”.
A total budget of £24m was allocated to cover the entire project with £23.71m of the money spent on Phase 1, which was delivered earlier this year – nearly two years later than planned.
Phase 1 – which has seen medical records held by the Princess Elizabeth Hospital, the Oberlands campus, the Castel Hospital, the Mignot Memorial Hospital, and the MSG all linked – will need an additional £450,000 spent on it to get it fully over the line with ongoing specialist support.
“The first phase of the Electronic Patient Record programme has delivered a significant step forward in terms of the way digital health records can be managed and utilised,” said HSC.
Because paying for Phase 1 has eaten into the contingency budget that would have gone towards funding Phase 2 of the EPR project, HSC has now decided to stop working on it – and instead look at funding individual parts of the programme in the future.
Phase 2 would have included the digital system for the critical care unit, the acute electronic prescribing system, and the Mosaic safeguarding system upgrade, among other pieces of work.
“Closing the programme does not mean that all remaining digital health improvements have been stopped,” explained HSC.
“Rather, the Committee is seeking to bring the existing major programme to a controlled conclusion rather than seek further major capital funding to deliver its full original scope.
“Each of the remaining projects will require their own business justification and funding approval, likely through routine minor capital, ensuring they remain within budget and are implemented in a controlled manner. It will also allow the Committee to clearly prioritise investment into digital systems against the merits of each project and a more structured strategy.”
HSC says other “minor former Phase 2 items will be reviewed through the development of a wider Digital Health Strategy,” but it offered no detail on what these are.
Totals
- Initial estimated cost for each of the above three projects – £186m
- Current estimated cost for the above three projects – £336.51m
- Total spent so far on the above three projects – £63.11m
- Estimated still to be spent on Phase 1 and the EPR to ‘close’ the work – £3.5m
In 2019 we were told that Health and Social Care wanted to spend £93.4m upgrading the Princess Elizabeth Hospital.
We now know that to do the work that was described as essential then would in reality cost us £336.51m (estimated based on figures provided to Express).
More than £63m has already been spent on the three projects – and another £3.05m is needed to get Phase 1 of the hospital upgrades completed, with another £450,000 needed to finish Phase 1 of the EPR project.
Phase 2 of the hospital modernisation work has been scrapped because of escalating costs – while Phase 2 of the EPR will be permanently on hold until HSC can fund each item separately through existing budgets.
What did we get for our money?
For the £63.11m that has been spent we have:
- A new electricity substation at the PEH
- A new Electro-Biomedical Engineering workshop at the PEH
- A new Critical Care Unit – that can’t be used because it doesn’t meet building safety standards
- A new Post Anaesthetic Care Unit – that also can’t be used because it doesn’t meet building safety standards
- Plans for Phase 2 of the hospital upgrades, including a new maternity wing and surgical theatres, that have now been scrapped
- A digitised patient records system bringing together documents held by the Princess Elizabeth Hospital, the Oberlands campus, the Castel Hospital, the Mignot Memorial Hospital, and the MSG.
