£635m cost of multi-site hospital does not include 'contingency'

Tuesday 22 November 2022

The £635m predicted cost of a new multi-site hospital does not include contingencies for unforeseen circumstances and inflation, the Treasury Minister has confirmed.

The previous Our Hospital project for a single ‘health campus’ cost £804.5m, of which £38.1m was ‘optimum bias’ and £73.1m was ‘client contingency’.

The former is a technical term for unaccounted costs at the beginning of a project which are reallocated to cost categories when they become known.

The latter refers to a pot of money to cover unforeseen costs that might crop up as a project advances.

Deputy Ian Gorst told the States on Tuesday that the £635m capital cost of the Government’s new plan to develop facilities at Overdale, the existing site in Gloucester Street, next door in Kensington Place and in the former Les Quennevais School did not include these contingencies.

This was a very significant admission in the Assembly today.

It turns out the headline figures being used to compare the two hospital options are not calculated on a ‘like for like’ basis.

It is vital that we get figures which are comparable. Scrutiny will be asking for this. https://t.co/uqlCVLW2go

— Deputy Sam Mézec (@SamMezecJsy) November 22, 2022

However, facing a question from former Our Hospital political head Deputy Lyndon Farnham, he stressed that the former project was no longer viable because it would now cost up to £150m more than the £804.5m budget and take longer to complete.

“We must be clear that the new multi-site plan will still offer substantial savings,” he said.

Later in the States sitting, Chief Minister Kristina Moore said that the Government’s new £635m plan included mental health facilities. 

Pictured: An artist's impression of the mental health unit included in the Our Hospital plans.

Up to this point, there had been questions over whether mental health care was included in the costings of a recently published review of the Our Hospital Project led by Infrastructure Minister Tom Binet.

It concluded that mental health services could be established at a separate standalone location, which could be on the Overdale site, although further work would be needed to “validate this possibility”.

The Our Hospital project included a single-storey mental health block, which formed part of the overall budget.

“Mental health facilities are included in our plans for a new hospital,” Deputy Kristina Moore told Members during her ‘Questions Without Notice’ in the Assembly.

Pictured top: Land on Kensington Place - which had previously been earmarked for housing - where the Government hopes the current hospital will be able to expand.