‘Errors of judgment’, no bid to mislead on PEH cost
Individual failures from key staff no longer engaged with the States were the key issues which caused the shock rise in costs on the hospital modernisation project which surprised States members at the end of last year.
The report of an official investigation into the issue, where senior officers and politicians were not told of runaway costs from £120m. to £150m. on the Princess Elizabeth Hospital project, even as deputies were choosing between the hospital or a post-16 educational campus as a major financial investment, has concluded it was errors of judgment to blame, rather than a wilful attempt to mislead.
‘There is no evidence, nor is it in my view plausible, that there was any deliberate intent to mislead the States and the media as to the cost of the project,’ said former States lawyer Martin Thornton, who was commissioned to carry out the investigation.
He said that the officers failed to appreciate the need to pass information about steepling costs up the chain and saw the information as ‘just’ an increase in costs or a problem to be addressed at a future point.
This meant that the project continued on the basis of unreliable and inaccurate information and political committees were completely unsighted and unable to respond.
As the project developed it was based on out-of-date costings and drawings, and the project had an unrealistic optimism bias. At one point the bias on the project was as low as 4.95% when the NHS would typically use a figure of 20%.
Mr Thornton said that key staff might have considered that additional costs identified were just one element of the design process which would go on to be managed or re-scoped.
A looseness around the constitution of the governance of the project appeared to give discretion not to report the issue.
However, he said it was inexcusable that presentations on the project were delivered to all deputies and the media in May 2023 which gave no update on revised cost estimates from March of that year. Politicians and key staff still did not know anything about them.
The States gave Health & Social Care the go-ahead to prioritise the hospital project in October and only at the end of that month was the March 2023 estimate disclosed to officers.
Mr Thornton concluded that there were serious issues raised in the delay of updating about the cost increases.
‘Some lessons must be learned, and I can understand why there is significant disquiet and some anger, particularly from elected members, as to the amount of time that elapsed before P&R, the head of the public service and elected members were informed as to what had happened.
‘However, I do not consider that any currently-employed officer has acted in a way that could be regarded as misconduct or should be subject to sanction.’
He said that the saga should lead to much closer control, scrutiny and challenge on projects.
‘The project governance board should view this incident as a driver to ensure that there is proper challenge and scrutiny to the decision-making, and officers will wish to ensure that there is full disclosure to the political committee and to treasury as the project seeks to progress,’ he added.
