Department of Health: The Paddington Health Campus Scheme

summary8 While the Campus partners were rightly committed toovercoming obstacles, we believe the failure to have a criticalchallenge led to wasted and misdirected effort and expense.The Strategic Health Authority should have either requiredthat the Campus partners draw up a new OBC in early 2003or cancelled the Campus scheme. Cancelling the scheme atthat point would have freed resources and organisations todevelop other schemes. Developing a new OBC would, webelieve, have led sooner to the robust assessment of whetherthe partners could afford to build the scheme and address the:nnnmore than doubling of the forecast capital cost;absence of adequate land, in the light of planningconstraints; andlack of available funds to build the scheme.9 A further two years were spent exploring a variety ofalternative schemes. In 2003 the Campus partners, stronglyencouraged by the Strategic Health Authority, developedOutline and Full Business Cases to acquire The Point buildingbeside St Mary’s hospital in 2003. From Summer 2004onwards the Campus partners developed a new OBC forthe whole scheme, at the request of the Chief Secretary tothe Treasury. In the event, in May 2005 the Campus partnerscould not agree a revised OBC.Summary of key findingsThe scheme partners underestimated the risksto the scheme10 The Campus scheme faced a number of significantrisks, due in part to its intrinsic complexity and thetimescale over which it was being planned. The timescaleitself led to additional risks due to the impact on designassumptions of new national policies for the NHSintroduced while the scheme was being developed. Theserisks included project risks, in particular the mismatchbetween the size of the scheme and the land and fundingavailable, and the impact of ‘consumerism’ guidelines onspace in new hospital building schemes. There were alsopolicy risks because of the change in the structure of theNHS, with the creation of Strategic Health Authorities andPrimary Care Trusts, and the implications for this schemeof Payment by Results and patient choice that could nothave been foreseen by the Campus partners.11 The Department of Health (the Department) iscurrently reviewing how the commissioning of majorcapital schemes through PFI can be reconciled withlong-term affordability and policies on choice, Paymentby Results and the movement of care away from acutehospitals to the primary care sector.12 Any one set of the above project or policy riskswould have been challenging. However, the layering ofrisks upon risks without adequate mitigation or an effectiverisk management strategy made the scheme particularlyvulnerable and reduced its chances of success.13 The Campus partners failed to address some of therequirements of the Department’s Capital Investment Manualin developing an OBC. For example, they did not draw upa risk register as part of the 2000 OBC or carry out a formalreappraisal of the 2000 OBC when its estimated capital costincreased by more than 10 per cent. Whilst the Campuspartners drew up ‘snapshot’ risk registers on three occasions(summer 2001, autumn 2003 and autumn 2004), in summerand autumn 2004 the Project Director made a deliberatedecision not to embed risk management processes in thescheme as the scheme did not have sufficient resources orcapacity to do so at the same time as drawing up a newOBC. As a result, the lack of structured and integrated riskmanagement processes was a key contributor to the Campuspartners’ collective inability to realise fully and act earlier onthe threats to the viability of the scheme.14 The biggest single constraint throughout the lifeof the scheme, was that the NHS failed to identify anadequate land requirement before securing the originalOBC approval in 2000. As the Campus partners developedthe scheme, their land requirements became clearer andnew schemes emerged which had different land and spacerequirements. It was over two years after the 2000 OBCwas approved that the Campus partners realised they didnot own enough land to make the Campus work withinWestminster City Council’s planning policy. They thereforeneeded to acquire additional land.15 From early 2003 on, the Campus partners explored anumber of complex ways of addressing the scheme’s spacerequirements but without any satisfactory resolution. Thisincluded, in early 2005, exploring an offer from WestminsterCity Council to assemble a land package suitable for thescheme as required by the December 2004 OBC, althoughwithout any written parameters but ultimately subject toapproval by Trust Boards.The Paddington Health Campus scheme