Watchdog slams £15m hospital failure
Watchdog slams £15m hospital failure
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Friday, 19, May 2006 10:41
The National Audit Office (NAO) has criticised the collapse of an ambitious new hospital project which ran up costs of £15 million before being abandoned.
In its report to parliament on the failed Paddington Health Campus project, the government's public services auditor concluded that the original business case supporting the public finance initiative (PFI) development was "inadequate".
The scheme, to merge three ageing hospitals in west London and create a "world-class healthcare facility" was abandoned after the projected costs of the development soared from £300 million to £894 million.
The new health facility, which was due to be completed this year, was cancelled in 2005, by which time the expected completion date for the scheme had slipped to 2013, the NAO said.
In its report the public spending watchdog said that the North West London Strategic Health Authority should have acted two years earlier in 2003 and either abandoned the scheme, or drawn up new plans.
The NAO said that action should have been taken after external construction consultants warned in late 2002 that the project's building costs had almost doubled and Westminster City Council indicated that it was unable to provide sufficient land for the hospital scheme.
The ambitious project to merge St Mary's hospital with the Royal Brompton and Harefield hospitals ultimately failed due to the lack of suitable land, the inability of the project's partners to agree on its affordability and a drop in the estimated number of hospital beds required for the area, the NAO said.
The organisation added that the failure of the St Mary's NHS Trust and the Royal Brompton and Harefield NHS Trust to merge at the start of the development process had been a "key factor" in the collapse of the scheme.
Its report said that the diverging clinical and financial interests of the two trusts became evident as the Paddington project progressed.
Commenting, NAO head Sir John Bourn said: "A hospital development of this scale and ambition was always going to be a challenge but the original business case was inadequate, the lack of a single sponsor was a fatal flaw and the final scheme was not deliverable."
"The cancellation of the Paddington scheme at a cost of £15 million has left patients, staff and visitors to the hospitals with outdated facilities," he added.
Responding, a spokesman for the Department of Health said that the government was already working to address the report's findings and stressed that the inquiry confirmed that the collapse of the hospital scheme was "totally unconnected" to the private finance initiative.
"Steps already introduced include checks on governance and project management, including independent assessment of project risks and leadership arrangements, and tighter criteria for outline business cases to ensure tender costs are realistic," the spokesman added.