Hospital plans to be put on ice under P&R's bid to save money

Wednesday 19 April 2023

Major plans to modernise the hospital will not go ahead this term under proposals announced by Policy & Resources.

The Committee has been reviewing what major projects should happen in the wake of little action being agreed to tackle a looming blackhole in States finances.

It favours continuing work on building a new post-16 campus at Les Ozouets - a project which had been thrown into turmoil when the States ended a deal with RG Falla to do the work  - and warned that there was not the capacity to deliver these two major projects at the same time.

Also among those schemes which will not progress is one to reclaim land at Belle Greve for inert waste - a project that was said to be a “must do” when the States agreed its priorities in the summer of 2021.

Phase one of the hospital project is already under way and will continue, but Health had submitted plans for the second phase which were £15m. more than originally expected.

“‘During the tax review debate our Committee was directed by the Assembly to carry out this review, which we have prioritised due to the number of schemes that will be seeking funding in the immediate future and the need to provide for clarity for all programmes as soon as possible,” said P&R president Deputy Peter Ferbrache.

“We have sought to take a sensible approach, recognising that the way the capital portfolio is currently constructed creates significant spikes in expenditure with large projects being scheduled to be carried out at the same time."

“We need to reduce the cost of the current portfolio in recognition of our ongoing deficit and the need to make the limited reserves last longer. We also want to flatten that curve to make sure the island as a whole has the capacity to deliver all the capital projects the Assembly has identified as essential," continued Deputy Ferbrache.

“It is important to recognise that these are our committee’s initial proposals, which we have shared with principal committees in advance of further discussions with each of them. We wish to be as transparent as possible but need to stress that they are subject to potential changes following those discussions and it will ultimately be for the States Assembly to decide. Difficult decisions are needed, however, as it is simply not possible to deliver all projects in the timescales originally planned.”

The original capital programme was expected to cost £460m., but costs in the construction industry have since shot up. Phase two includes the construction of a new three-storey extension that'll hold four new theatres and space for various services to be re-shuffled around the building. 

The decision has not been taken well by the Committee for HSC, which released the following statement:

"As a  Committee, we are very disappointed that this is the P&R recommendation as there is a clear and evidenced need for the second phase of the Hospital Modernisation Programme and for it to continue seamlessly, using the contractors who are already on site delivering Phase1.  Phase 2 of the Hospital Modernisation programme has been designed to address challenges and key issues with our current infrastructure, some of which were identified as far back as 2011. We are determined to push for Phase 2 of Our Hospital Modernisation to be considered as an ‘do as planned’ programme in view of the considerable work that has been completed to date, the fact that Planning Permission has been granted and contractors are already on site delivering Phase 1.  

"We will do our best to persuade the States Assembly to prioritise this much needed programme of work and, if needed, will lay the necessary amendments in due course to enable that debate in the States Assembly in July. 

"We are pleased to see the proposals to accelerate the HSC’s Community Hub Programme recognising the need to invest in facilities for children and families as a priority – but with a manageable project that is of a size and scope that can be delivered in practice. We fully support the desire the accelerate this programme."

When P&R announced it was pausing the capital programme after the tax debate, it said all funding options would be considered, including borrowing.

Its latest announcement makes no mention of that.

P&R has identified which projects should continue as planned, which ones could be changed and still delivered, and which ones should not happen this term but should go ahead later.

It estimates the changes put forward in these preliminary proposals could see a spending reduction of between £150m to £200m this term.

There is no information about how far each project had actually progressed already.

One of the factors in P&R’s thinking on pressing ahead with the education build instead of the hospital was the fact that the Transforming Education Programme was already on the road to implementing new staffing structures for the new secondary structure of three 11 to 16 schools and a separate sixth form college. 

Staff have moved out of Les Ozouets Campus pending its redevelopment, and construction work is likely able to start relatively soon following the July debate, should the States approve the reworked capital portfolio.

Projects due to go ahead as planned include the Alderney airport runway.

Those to be revised include bus fleet replacement and the Fermain Wall repair.

Day-to-day maintenance and minor capital projects will continue.