Everyone (well most people) get a feeling of personal satisfaction when completing a task, including (from personal experience) the filing of the annual tax return. Therefore, one would assume those designing and building a multi-million pound new hospital would get such a feeling when handing over the keys to the client. 'A job well done', one might hear them say as the champagne corks start popping.

Unfortunately, any satisfaction felt by those designing and building the new £150m (or some £432m over 25 years) Sick Children's Hospital in Edinburgh does not appear to be shared by the client, NHS Lothian, or the Scottish government. I strongly suspect the champagne toast (or a 'wee dram') at hand-over day has long been forgotten.

'Problems' - ventilation, drainage and water

Last month the new hospital's opening (originally planned for 2017) was further delayed by last minute 'problems' with its ventilation system.  Now one reads that due to 'problems' with the ventilation, drainage and water systems the opening date is unknown. There is even an assertion that the building might have to be knocked down which, if it did occur, would make for an interesting scenario given that the existing hospital has been sold to a student housing developer.

The response has been the setting up of an NHS-led review which seems a little odd as it was NHS Lothian that procured the new hospital. Anyway, its report is due out this September. In addition, the Scottish government has retained KPMG to look into the factors that lead to the delay.

£1.4m per month for a hospital with no patients

Since hand over in February 2019, the tax payer (in the form of NHS Lothian) has, one reads, been paying the private consortium, IHSL, a princely sum of £1.4m per month to maintain a hospital which has no patients. This seems 'bonkers' but open or not, a hospital building has to be maintained or it deteriorates and can end up costing far more to make good in the long run. In this regard, one just needs to look back at the Midland Metropolitan Hospital scheme that was part built when Carillion went 'pop' in January 2018.

In addition, payments of this kind are not unusual in what was, in effect, a PFI scheme, i.e. patients or no patients someone has to pay to maintain the hospital. That is, having advised on a number of similar schemes back in the days of New Labour, just a contractual consequence of PFI procurement.

Therefore, it would be wrong to blame the private consortium for charging for what it is entitled under the contract. Whether or not NHS Lothian will recover some or all of this money will depend on the cause(s) of the 'problems' with the ventilation, drainage and water systems. One suspects that many wise men and women are currently hard at work carrying out on-site tests, writing detailed reports and reading the contractual small print in readiness for commercial discussions and/or the contractual dispute resolution process.

How could this have been avoided?

There is no easy answer and I suspect the reviews being carried out by the NHS and KMPG will highlight a number of factors including one or more of the following:

  • the form of procurement used;
  • the relatively complex nature of designing and building a new hospital facility;
  • poor and/or unclear management responsibilities and lines of communication;
  • a lack of a clear design brief and/or constant changes to the brief;
  • an inadequate change procedure process and/or deficiencies in how this procedure was implemented;
  • poor and/or inaccurate time and cost forecasts as to the impact of changes to the client brief; 
  • various 'construction' delays on site; 
  • the 'Beast from the East', i.e. external factors; and/or
  • the hand-over procedures under the parties' contract.

'The Compassionate Society'

I am confident that there will be a section of the review entitled 'lessons learned' and that the words 'fit for purpose' will appear at least once, if not many times. I am equally confident that the review will not mention James Hacker MP, the cabinet minister at the Department of Administrative Affairs and his shock at discovering a new hospital had an administrative staff of over 500 but not a single patient. Such a scenario could never happen and the episode, The Compassionate Society (1981), from the TV and radio comedy, 'Yes Minister', is pure fiction.

I look forward to reading the outcome of these reviews into this latest delayed hospital project and the 'lessons to be learned' (once again). In the meantime, I will gain my own personal satisfaction at completing my annual tax return and raise a wee dram to HMRC.