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Express can today confirm that Infrastructure Minister Tom Binet will lead a review into the Our Hospital Project, with the St. Saviour poll-topper reporting back to the Assembly no later than 20 October... But plenty of questions remain unanswered about the new hospital project.
What the Minister will recommend is clearly unknown at this stage, but we do know what has gone before and what he and other politicians have said in the past.
Here, Express tackle some of the questions that might be raised as we enter a new, uncertain phase of the Jersey's largest capital project of the modern age...
That is the £804.5m question.
The project was given planning permission in May but what is clear is that the new Chief Minister, and a number of her recently appointed ministers, have profound concerns about the cost and scale of the project in its current form.
Deputy Kristina Moore has consistently voted against past hospital propositions and has been critical of the approach taken by the last Government.
For example, in her forward to a review of the funding proposals, as chair of the Future Hospital Review Panel, Deputy Moore wrote last October: “The cost of £804.5m to be funded by borrowing £756m, is a plan that the Chartered Institute of Public Finance Accountancy [cost analysts employed by her panel] find to be of a scale that would do damage to the island’s public finances.
“So why is the States Assembly being asked to agree an historic departure from the prudent approach that our island has been known for? That is simply not clear.
“The Deputy Chief Minister [Deputy Farnham], as the political leader of the project, assures concerned islanders that he “very much hopes” that the project will be delivered under budget. But that is the best guarantee he has.
“Performance to date indicates that Members should treat these claims with extreme caution."
Pictured: Deputy Kristina Moore was a consistent critic of the past government's approach to the new hospital in the last Assembly.
She continued: “Not only is the Outline Business Case found wanting, this report will remind Members of the flaws in both the site selection process and the access route proposals.
“Proper process has not been followed, on not one, but on three occasions, yet the Government has failed to hold those discharged with the task of planning for a new hospital to account.
“With a project of this scale and risk to the island, it is unacceptable to allow the Assembly to be railroaded in this way. For that reason, the Future Hospital Review Panel is proposing a restrained budget to the Assembly.”
The panel did attempt to amend the Government’s funding proposal to cap spending at £550m but the amendment failed.
There are a range of possibilities, depending on the outcome of the review: at either end, the project carries on as planned or it is torn up and started again.
Or there is a blended option in the middle: a reduction in the scale of the Overdale plans; a twin-site option with potentially acute and emergency provision staying in Gloucester Street and some services moving to a new and smaller hospital at Overdale; or, perhaps, the standalone mental health unit, ‘knowledge centre’ and multistorey car park being scaled back.
The access road may also be revised, and the total budget come down.
Of course, it is all speculation at this point, but it is clear that a number of key people on the Council of Ministers have reservations, including the Chief Minister, Infrastructure Minister Tom Binet, Health Minister Karen Wilson, Education Minister Inna Gardiner and Treasury Minister Ian Gorst, who referred to reducing the height of the new hospital and changing the access road in the Assembly this week.
Infrastructure Minster Tom Binet will lead the review. An outspoken critic of the current project as a member of the Friends of Our Hospital Group, Deputy Binet shared his concerns in the Assembly this week.
Pictured: Infrastructure Minister Tom Binet will lead the 100-day review into the hospital.
But questioned on whether he would be impartial on Express's Politics Disassembled podcast, the Chief Minister said Deputy Binet was “exceptionally pragmatic and motivated to do what’s right for Jersey”.
She added that the St. Saviour Deputy had the “ability, knowledge and determination” and “can cut through and will make the right decision”.
The Chief Minister added that he would be working closely with the Health Minister, who acts as the client.
Deputy Binet must report back to the Assembly by 20 October with his recommendations.
Yet to be determined - but we do know it will last no more than 100 days and Deputy Binet will "advise the Assembly whether changes can be made to the hospital project to deliver a more affordable and appropriate alternative".
It is understood that there will be a public update halfway through the process.
This is subject to the review - however, the project does have clear momentum.
The previous Assembly voted to select Overdale as the site for the new hospital in November 2020 following a whittling down process from about 80 potential sites.
That proposition was successfully amended by St. Helier Constable Simon Crowcroft, which called on the Council of Ministers to come back to the States with an access plan - in essence, how would people and vehicles, including ambulances, get to the hospital.
The as-amended proposition, P.123, was adopted by 37 votes to six against. From the current Council, Treasury Minister Ian Gorst, Economic Development Minister Kirsten Morel and International Development Minister Carolyn Labey voted in support, Chief Minister Kristina Moore voted against, and Education Minister Inna Gardiner abstained.
The access vote, which took place in February 2021, was approved by 34 votes to 11. Again, Deputies Gorst and Labey voted in support of the proposed access route up Westmount Road, which at that stage was just described as a two-way route with an active travel corridor, but Deputies Morel, Moore and Gardiner all voted against.
Members also approved funding for the new hospital last October. The main part – to cap the project at £804.5m and approve borrowing up to £756m – was approved by 32 votes to 14.
Pictured: Around £20m has been spent so far buying properties and land around Overdale for the new health campus and access to it.
Deputies Gorst, Labey and Morel supported the proposal while Deputies Moore and Gardiner voted against.
So far, around £90m of public money has been spent since a past Council of Ministers, under Deputy Gorst, set the new hospital project in motion with a report called ‘Health and Social Services: A New Way Forward’ in 2012.
Of that £90m, around £50m has been spent on the Our Hospital project – the latest incarnation which is now focused on Overdale. However, £20m of that has been spent buying property, so remains a redeemable asset on the public balance sheet.
It is understood that every property and piece of land purchased so far includes a buy-back clause in the contract of sale.
Deputy Farnham, who led the ‘Political Oversight Group’ overseeing the project, said this week that it would be “unrealistic” for the plan to return to a dual-site option or halve in cost.
“The whole design this time round has been clinically led, which is where we went wrong with the attempts to build it in Gloucester Street,” he said.
Despite the previous States decisions, the Assembly is, of course, sovereign, so has the ability to change direction at any time, subject to the law of the land, which it defines.
Around 30 people are currently working on the Our Hospital project, including civil servants and members of the joint venture team, ROK FCC JV.
The Project Director is Ramón Romero, who works for Spanish construction firm FCC Construcción. The company, with ROK Construction, won an initial £30m contract in June 2020 to get the project ready for the building phase.
The main construction contract between the States and the joint-venture company has yet to be signed; however, the contract to develop the former Les Quennevais School into a temporary hospital while Overdale is being developed has been signed.
It is understood this took place during the election period.
Pictured: Contractors for the Our Hospital project team are surveying around Westmount Road this week.
On the Government side, there is an interim project director, Richard Bannister, whose contract runs out at the end of this month.
Answering a question from St. John Constable Andy Jehan in April on what happens after that, the Government said: “If the project receives planning consent for the main hospital scheme, the project will move into construction phase, at which time the resourcing of the project team will be reassessed. In line with this, the requirement for ongoing clinical input, will be assessed.
“If planning consent is not granted, then the health brief phase will be extended and there may be a need for further clinical input to reconsider and challenge the current plans.”
Planning consent has been granted, but it is still unclear if the main construction phase will go ahead.
When it comes to the potential cost of delay, former Chief Minister John Le Fondré said last month: "A rule of thumb estimate for delaying the project has been estimated at circa £100,000 per day, approximately £36.5m per year.
He added: "Furthermore, any cancellation of the project will require a new States decision and a recognition that the potential loss to the taxpayer of the only scheme to have planning permission will be many more tens of millions of pounds in abortive costs as well as the cost of a new application, which based on past experience is likely to be a very significant sum of money."
Critics, however, argue that reducing the £804.5m cost of the project by scaling it back will save more money than any delay costs.
When it comes to activity on the ground, the project team is continuing with “non-intrusive” and desk-top work, as there has been no ministerial order instructing them to stop and/or pause. Health Minister Karen Wilson has already said she will pause the Jersey Care Model so the new government has proved it is not afraid to apply the brakes on projects it has concerns over.
But until then, work continues. This week, for instance, the Our Hospital team is carrying out a “topographical survey” on the outside areas of some homes around Overdale. They have the permission of owners or occupiers and will only take measurements.
Although the States Assembly has approved £756m of borrowing to fund the lion’s share of the £804.5m cost of the project, the Government doesn’t yet have that money.
That’s because it decided earlier this year not to purchase a bond – in effect, a long-term loan from institutional investors like banks and pension funds – until after the election.
Instead, ministers chose to rejig their borrowing agenda, choosing to pay off its pension debt with a loan first. So, in April, it borrowed £500m to clear its pre-1987 past-service liability for civil servants’ and teachers’ pensions.
So, the hospital loan is still to be negotiated and signed.
The previous government said that if it secures a low fixed-interest rate – or ‘coupon’, in the terminology of bonds – and the investment performance of its Strategic Reserve [the ‘rainy-day fund’] is maintained, this growth will pay for the hospital – in essence, they said we would be getting a hospital ‘for free.’
Adjusting for inflation over the next 40 years at 2.6% per annum, the past government estimated that on a £756m loan, it would pay back £460m in interest but the projected investment return on £756m - by adding it to the £1 billion Strategic Reserve - would be £1.4m.
However, the new Treasury Minister – whose reservations about borrowing are well known – may want to reduce the level of debt.
The next phase of the Our Hospital project is to convert the former Les Quennevais School and to finish the third stage of the new hospital’s design, which are both scheduled for this autumn.
Again, whether a new hospital opens in 2026 will be determined by the outcome of the Binet Review.
The previous government said that 2026 was a ‘tipping point’ where the cost of maintaining the current hospital estate increases sharply and “the threat to service continuity, patient safety and patient experience also increases significantly”.
It also said there was a risk that the island would “lose the experience and expertise of our Design and Delivery Partner, RokFCC.”
It said last year: “This would further damage Jersey’s reputation in the hospital construction market, which has been negatively impacted due to previous false starts for the project.
“In this scenario, it is possible that the island would not be able to secure another suitably experienced Design and Delivery Partner without having to repeat a lengthy and expensive procurement process and risk being severely compromised in the commercial negotiations.”
These are all risks that the new Council of Ministers will have to grapple with.
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