Department of Health: The Paddington Health Campus Scheme

part three3.12 The PDCL negotiator made it clear that he wouldnot recommend any proposal to his shareholdersunless it had been agreed by the Department first andrepresented at least as good value to PDCL as theproposed December 2004 deal. This made the approvalof the Addendum to the OBC difficult: there could be noAddendum without a land deal and no land deal withoutsupport for the Addendum. This conundrum would laterprove to be insurmountable.3.13 On 2 March 2005, PDCL formally renouncedany further involvement with the Campus partners asit believed the Department did not support the schemeand that the scheme would therefore ultimately fail.PDCL publicly announced it had appointed architects todevelop the site. This is not to say nothing was going on.With the support of the Principals’ Group and the JointProject Board, the Campus partners’ property negotiator– an independent property consultant – continued to haveexploratory discussions with Westminster City Counciland the principal PDCL negotiator on what sort of dealmight be available (Figure 5).3.14 Both the Campus partners’ property negotiator andPDCL’s negotiator were effectively operating informallyin exploring with each other the shape and nature ofa successful land deal. The Campus partners’ propertynegotiator was authorised to deal with Westminster CityCouncil, but had no brief to discuss with PDCL, and thePDCL negotiator was not, at this time, operating on behalfof PDCL, so did not speak for PDCL. All parties have toldus that this did not amount to negotiation. The Departmentwas kept aware of developments by the Council and theCampus partners, even though at this time the Departmentwas no longer invited to the Principals’ Group.3.15 In the proposed May 2005 land transaction PDCLwould be involved in the disposal of surplus sites andwould receive overage at a lower level than in theDecember 2004 deal. In addition PDCL would be paid£19 million for the work required to secure planningpermission for the surplus sites plus indemnity for abortivecosts it would incur in seeking planning consents todevelop its site before the Campus partners would agreethe land deal.5Relationships between parties on the proposed land deal, March – May 2005St Mary’sNHS TrustRoyal Bromptonand HarefieldNHS TrustImperialCollege LondonPDCLJoint ProjectBoardPrincipals’GroupPDCL leadnegotiatorDepartment ofHealthCampuspropertynegotiatorWestminsterCity CouncilInformation exchangeExporatory discussionsSource: National Audit Officethe Paddington Health Campus scheme25