PEH modernisation will cost tens of millions more

The maximum estimated cost was £93.4m. when the States approved it in 2019. But HSC has now said it expects the work to cost tens of millions more.

Phase one is currently on time and on budget. It should be completed by March next year for a fixed price of £34m.

But HSC president Al Brouard told a Scrutiny public hearing that the remaining phases of the redevelopment ‘will be well over £100m.’.

Following the hearing, former HSC President Heidi Soulsby asked for the project to be taken back to the States Assembly to be re-examined by deputies.

‘I was pleased to hear that phase one of the hospital modernisation programme is still on track. It was interesting to hear it is now being proposed to be undertaken in two phases rather than three, and with a price tag for the second phase of £100m.,’ said Deputy Soulsby.

‘I do think that, given the change in approach, the increase in cost and the unsatisfactory conclusion of the tax review, with no immediate action being agreed on expenditure restraint or revenue-raising, that this should require States approval.’

HSC officials said the revised project, including budget increases, had recently been presented to the States’ senior committee, Policy & Resources, and that they were waiting to hear whether P&R would sanction going ahead.

P&R president Peter Ferbrache has already openly suggested that cost increases could force his committee to ask the Assembly to re-debate the project in the wake of their failure to agree a tax plan to deal with a hole in States finances projected to be nearly £100m. a year.

Deputy Brouard was asked at the Scrutiny hearing whether he thought the redevelopment of the PEH should now return to the Assembly.

‘I don’t know whether it will or not. I would have suspected not because it’s part of a phased approach, but I may be wrong’ said Deputy Brouard.

After the hearing, Scrutiny president Yvonne Burford raised concerns about the plan to go ahead with the rest of the project without further approval from the States.

‘The information gained on the potentially enormous costs was concerning,’ said Deputy Burford.

‘We were told that phases two and three had now been combined and were in the process of sign-off from P&R, with the costs approaching £100m., and seemingly with no intention of involving the States Assembly in the decision to proceed with this significant change in ambition and cost.

‘Phases two and three were listed in the 2019 policy letter as costing a maximum of £50m.’

Deputy Burford recently won an amendment in the States which led to deputies putting a £5m. limit on P&R’s powers to authorise future capital projects not yet started, having earlier this term effectively set the limit at £568m.