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Tuesday 22nd May 2018

Paddington Campus debacle

11th May 2006

01052006_construction1.jpgThe National Audit Office (NAO) has said that the National Health Service wasted £15m on a "fatally flawed" plan to rebuild hospitals in north-west London before scrapping it.

The Paddington Campus scheme aimed to build a world-class teaching and research centre through the private finance initiative by merging the activities of St Mary's teaching hospital, the Brompton and Harefield heart hospitals and heart and lung research undertaken by Imperial College.

But the costs of the "complex and ambitious" project rocketed from an initial estimate of £300m in 2000, with the scheme due to be completed in 2006, to a projected cost of £894m by the time it collapsed in 2005 with an expected completion date that had slipped to 2013.

At the same time, the number of beds had risen from an initial 1,000 to 1,200 before falling back to 835 NHS beds and 88 private ones by the time the project was abandoned.

Although the project was unique in ambition and complexity it failed to learn lessons from failed PFI projects - for example it had more than one sponsor, said the NAO.

The Department of Health needed to manage the performance of big capital projects that had a national as well as local significance, it added.

Its study said that the department never appeared clear whether it wanted the scheme to succeed or not, so the project lacked "strategic support".

A key problem with the project was that the Brompton and Harefield NHS Trust never agreed to a merger with St Mary's, leaving the project with two sponsors facing different financial and clinical drivers.

Changing NHS policy undermined the scheme. And a big reorganisation of health authorities and primary trusts - of the type that is taking place again just three years later - also disrupted the project, said the NAO.

The "fatal flaw", according to the NAO, was that the project lacked a single sponsor with the divergent interests of St Mary's and the Brompton becoming more apparent as the scheme proceeded.

An opportunity to cancel the project or put it on a sounder footing was missed in 2002 when it became clear that construction costs had doubled and insufficient land was available.

The collapsed project had left patients and staff with outdated facilities and no easy way of replacing them.

Construction costs had risen generally, so that it would cost 37 per cent more to build replacement facilities than it would have done in 2000. And it was unlikely that all three hospitals could be rebuilt or refurbished as required in the light of available capital resources, said the NAO.

The report comes as a review of hospitals to be built under the private finance initiative is under way, with the capital cost of the programme set to fall from £12bn to a maximum of £7bn to £9bn. That is leaving hospitals with serious difficulties in raising the capital needed for refurbishments and the redesign of services.

Mark Britnell, chief executive of University Hospital Birmingham, which has just had a £560m PFI project signed off, said: "I doubt whether many new hospitals will be built in their entirety again".

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