Overspend: new Hospital cost rises by £50 million... at least

Tuesday 31 March 2015

The cost of the new hospital will be “significantly” more than the £297 million that the States agreed last year – with taxpayers likely to have to shell out another £50 million at least.

Treasury Minister Alan Maclean has warned that the public are likely to have to cover the costs of yet another major States overspend, but this time the costs are going up before work has even begun.

But his colleague, Health Minister Andrew Green said that while the news was not surprising, he hadn't seen any details from the Treasury yet - and hadn't heard of an increase in cost before it was mentioned in the States.

"I have not been told anything and I was quite surprised to hear it in the States from another minister," he said.

A decision is due in May on where the new hospital is going to be, with options including splitting it up into two buildings, rebuilding the current Gloucester Street site or moving it up to Overdale. Senator Green said during the ministerial elections that it would be cheaper and simpler to have the hospital on a single site – but Senator Maclean has contradicted that, saying that the minimum cost for splitting the hospital on two sites is around £350 million, and the cost of a hospital on one site is even more.

Speaking in the States during last week’s debate on funding the abuse inquiry, Senator Maclean let slip that the costs appeared to have risen dramatically.

He said: “What I can tell Members is that the two-site option that was originally priced at £297 million and the proposals put in place to use the interest from the Strategic Reserve in order to fund that over a period, that sum of £297 million is looking now like it is significantly lower than would be the case if we maintained the two-site option; significantly lower, £50 million or more below what it could possibly be and a single-site option would be even more than that.”

Last month, Health said they were planning to spend around £5.6 million on sorting out operating theatres over the next few years, even though they’re about to commission a new hospital building. The department says that although the new building is being planned, it will take ten years to be built and they need to make sure that there’s capacity to do the operations that are needed before the new building is ready.