Guernsey Press

PEH redevelopment cost up £30m. in five months

The estimated cost of redeveloping the Princess Elizabeth Hospital has increased by up to £30m. since the States agreed funding less than five months ago.

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PEH. (33049235)

Phase two of a decade-long programme to modernise the hospital was expected to cost £120m. when it was included in the current round of capital projects in October.

But the Health & Social Care Committee has now been told the latest estimated cost is between £140m. and £150m., depending on the rate of inflation used in the calculation.

HSC president Al Brouard briefed deputies by email yesterday.

He had received questions from the Guernsey Press last week.

He told deputies that his committee would do everything it could to get on top of the potentially spiralling costs.

‘The committee has been made aware of some significant cost pressures regarding phase two, as a result of more detailed designs,’ said Deputy Brouard.

‘This information estimates the costs for phase two will exceed the cost envelope agreed by the States without intervention.

‘Clearly, and as I’m sure you would all expect, we will do everything possible to ensure appropriate intervention takes place to bring the costs back in line with what has been agreed.’

Policy & Resources, which was ousted soon after the funding debate last autumn, recommended excluding the next phase of the hospital redevelopment from the current round of capital funding unless the States backed the introduction of a goods and services tax or agreed to borrow an additional £200m., which it did not.

Instead the Assembly voted for an amendment from Deputy Brouard and his vice-president, Deputy Tina Bury, which led to the States re-inserting phase two as an agreed project, with funding coming from an existing health reserve and a much smaller amount of additional borrowing.

The HSC president admitted that the hospital project may now have to go back to the States for another debate.

‘Our committee’s firm position [is] that we have directed our team to examine all options to remain within the agreed cost envelope,’ said Deputy Brouard.

‘As such, there may well be no issue to report here, given the work we’ll be doing on this in the coming months to bring the costs back in line with what the Assembly agreed.

‘Please be assured that should the committee’s work on this prove that it is not possible to contain costs within the envelope agreed by the States we will return the matter to the Assembly.’

The cost of the phase two redevelopment was initially estimated at £50m. when the previous States voted for it in 2019.

Deputy Brouard also told States members yesterday that major works currently being carried out at the PEH – known as phase one – were ‘slightly delayed’.

HSC had previously said phase one should be completed this month, but it now expects it to be fully operational in autumn this year. Phase one is being completed at a fixed price of £34m.

In its briefing note to deputies, which it later sent to the Guernsey Press, HSC did not explain in detail why the estimated costs of phase two had grown by up to 25% since October’s States debate.

‘Our committee and staff will, over the next few months, be examining the detail, carrying out further work on the plans and taking all possible steps to make sure it remains within the cost envelope agreed by the Assembly,’ said Deputy Brouard.

Phase two includes improvements to various departments at the PEH, including maternity, orthopaedics, accident and emergency, the breast unit and the fracture clinic.

‘Our hospital modernisation remains an essential programme if we are to have any chance of meeting the long-term care needs of our community, with demands on health and social care services ever increasing,’ said Deputy Brouard.