Department of Health: The Paddington Health Campus Scheme

More documents

Recommendations

Info

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
appendix fiveOn the funding problemsviiviiiIn addition to failing to control the costs of the project, and delivery ontime, those responsible for Guy’s Phase III also proceeded at variousstages without full funding for the project. This was reckless. The netoutcome was that the public sector contribution rose from £19.5 millionto £117.9 million including a £25.3 million funding gap; a total costincrease to the taxpayer of £98.4 million. While it is not possible to linkthis extra cost to specific delays to other patient services and projectselsewhere, it is clear that there must have been a considerable adverseimpact in other parts of the country. The NHS Executive put the impact offinancing the funding gap as equivalent to each NHS trust receiving a oneoff reduction of about £58,000, or a large capital project being delayedby one year;We look to the NHS Executive to ensure that future projects should not beallowed to proceed without an agreed funding strategy, without sensitivityanalyses that address the risks involved, and without rigorous re-appraisaland confirmation at every stage that sufficient funding is available;On improvements to the planning and delivery of NHS capital projectsixWe note the Executive’s assurance that improvements in projectmanagement and accountability since 1994, and the introduction ofPrivate Finance arrangements, will limit the risk of problems in thefuture to major construction contracts in the NHS. We look to theNHS Executive to ensure that this guidance is followed by NHS trusts.And we will be interested to hear about their experience withPFI in due course.50the Paddington Health Campus scheme
Page 1 and 2: department of healthThe Paddington
Page 3 and 4: DEPARTMENT of healthThe Paddington
Page 5: Part 3The Campus partners were unab
Page 8 and 9: summary8 While the Campus partners
Page 10 and 11: summary21 Ultimately, in addition t
Page 12 and 13: part onePart oneThere was a strong
Page 14 and 15: part oneThere were strong clinical
Page 16 and 17: part twoPart TwoThe way the Campus
Page 18 and 19: part two2.6 Securing planning permi
Page 20 and 21: part twoRisk management2.14 The NHS
Page 22 and 23: part two2.28 Public support for the
Page 24 and 25: part three3.1 The Royal Brompton an
Page 26 and 27: part three3.12 The PDCL negotiator
Page 28 and 29: part three3.24 All Campus partners
Page 30 and 31: part threeThe changing proposals fo
Page 32 and 33: part three6A comparison of capital
Page 34 and 35: part fourAccountability for the sch
Page 36 and 37: part four4.8 Some of the advice and
Page 38 and 39: part five5.1 Both NHS Trusts contin
Page 40 and 41: glossaryLondon Regional OfficeMemor
Page 42 and 43: appendix oneAppendix oneChronology
Page 44 and 45: appendix one2004 (continued)JulyChi
Page 46 and 47: appendix two7 It was the view of th
Page 48 and 49: appendix fourAppendix fourThe oppor

Department of Health: The Paddington Health Campus Scheme

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?