Department of Health: The Paddington Health Campus Scheme

appendix fiveDepartment of Health: Cost over‐runs,funding problems and delays on Guy’s HospitalPhase III development 142 The Treasury approved in principle the development of Guy’s HospitalPhase III in December 1986 at a cost of £35.5 million and with a plannedcompletion date of December 1993. The development was finally finished inApril 1997 after the cost had increased to £151.8 million. The Committee ofPublic Accounts report included the following recommendations:On the control of project costs and deliveryiiiiiiviThe Guy’s Hospital Phase III project cost £115 million more than theoriginal estimate of £35.5 million and was delivered over three yearslate. It is a disgrace that the original estimate was so inadequate, and wasapproved by both the Department of Health and the Treasury quickly,even though both had strong reservations about it;The unrealistic initial cost estimates may have enabled Guy’s to secure aplace in the queue for scarce NHS capital investment at the expense ofother schemes. We expect the NHS Executive to ensure that priorities forcapital allocation are based on realistic cost estimates;A key factor in the cost overruns and delays was that during the courseof the project there were four changes of client body with overallresponsibility, six different project sponsors, and five changes inproject manager. While we recognise that the NHS was undergoingconsiderable change during this period, the failure to ensure consistentproject oversight and management was indefensible. We note the NHSExecutive’s assurance that they are now seized of the importance of thesponsorship role and the need to ensure continuity of personnel, andindeed had intervened in recent cases to keep project sponsors in post;Accountability for such projects has been sharpened since 1994, with theissue of the Capital Investment Manual, and the designation of trust chiefexecutives as accountable officers with a direct line of accountabilityto the NHS Chief Executive. However, we are disturbed that no oneassociated with this major failure of cost control and project managementhas been identified or disciplined;14 Committee of Public Accounts (1999) Department of Health: Cost Over-runs, Funding Problems and Delays on Guy’s Hospital Phase III Development,Twenty-eighth Report 1998-99 (London: HMSO).the Paddington Health Campus scheme 49