01 November 2022
A statement to the States of Jersey on the outcome of the Our Hospital Project Review by the Minister for Infrastructure, Deputy Tom Binet.
Sir, as you might imagine, presenting a review of the most recent hospital project, creates
something of an anxious moment for me, given its complex and long running background.
Nonetheless, it’s a review that was very much required, particularly in light of recent global events,
that are already having a major effect on us, here in Jersey.
Over the past nine months we’ve witnessed a number of things that would have been unthinkable
this time last year; war in Eastern Europe, a fuel and energy crisis, inflation at 10%, and the strong
likelihood of recession. Severely disrupted supply chains are giving rise to long lead times for
most materials, with corresponding increases in cost. And labour is in short supply, as a result of
Covid 19 and Brexit. Against this backdrop, international contractors are extremely wary about
under-pricing and taking on greater risk. As a consequence, fixed price agreements are likely to
become a thing of the past, as they look to safeguard themselves in this new environment. This,
I’m afraid, is the new reality for us.
Sir, when the funding model for the ‘Our Hospital’ project was first revealed, Jersey was hoping for
an average return of 4.6%, over a 40-year period, on its billion-pound strategic reserve fund.
That’s 2% above the Fiscal Policy Panel’s long-term RPI assumption. And borrowing costs were
anticipated to be fixed at 2.5% for the duration. Whilst a period of 40 years is difficult to predict, it’s
fairly certain that we won’t see a return to those halcyon days any time soon. The strategic
reserve won’t reach its target this year (by some margin, I’m told) and the cost of borrowing is
considerably higher. This change in circumstances, therefore, plays a big part in the review. And,
perhaps unavoidably, frames some of the fundamental thinking, particularly the need for a more
robust approach to risk management.
However. grim as it may be, the situation is not without some opportunity. For example, the
amount of information and knowledge accumulated, and paid for, during the Our Hospital process,
has enabled most of the review work to be undertaken by our existing, and experienced, local
team. The only external assistance has come from the review’s Principal Expert Advisor, Mr Alan
Moore.
Sir, by way of background, until his retirement in September last year, Mr Moore was the Director
of Strategic Capital Development within Northern Irelands ‘Western Health & Social Care Trust’.
And in this capacity was the SRO (that’s to say, Senior Responsible Owner), for the successful
delivery of a £1Bn capital investment programme.
That responsibility included the delivery of the South-West Hospital at Enniskillen, the new
Hospital and Primary Care Complex at Omagh, the North-West Cancer Centre, and the phased
re-development of the Altnagelvin Area Hospital in Londonderry.
Whilst Mr Moore’s involvement was being arranged, an appropriate ‘Terms of Reference’ was
drawn up and given the pressing need to progress matters, a decision was taken not to reopen
the site selection process. Instead, a number of more practically deliverable options were selected
and a comprehensive consultation process began, which included some 20 stakeholder meetings
involving over 60 individuals.
Accepting that the current hospital may be required to stay in service for slightly longer than
anticipated, the hospital’s maintenance team were consulted at an early stage and assurances
were given that all required resources would be made available to keep the existing hospital
buildings safe, without the need for unnecessary bureaucratic processes.
With regard to the review, it’s important to state that the focus has, first and foremost, been to
ensure that the conclusion would lead to the best possible facilities for both patients and healthcare staff, in all areas.
In the process, every effort has also been made to combine this focus with an emphasis on some
form of ‘project phasing’ (possibly by way of a ‘dual site’ or ‘hybrid’ model) to spread the financial
risk over a longer period, deliver better value for money to the taxpayer, whilst recognising the
urgent need to progress as quickly as possible.
In addition, devising a scheme where buildings could be designed to a scale more compatible with
their surroundings, requiring less impact on the existing environment, and offering better project
access to local construction firms and associated building trades. Finally, to allow for future, cost
effective expansion, using modern methods of construction.
As Members will now know, the recommended option is to develop facilities on two major sites:
Overdale and Gloucester Street; this to be carried out in two distinct phases, to allow for a higher
degree of risk management. In addition, to retain the use of the facilities currently being developed
at Les Quennevais, in order to prevent unnecessary waste and reduce the area, and costs,
required to replicate them on either of the two main sites.
Finally, to implement a swift but comprehensive review of Mental Health requirements in order to
ensure the development of first-class facilities, appropriately located. Ideally, this work would start
immediately.
These recommendations are unlikely to please everyone, but they have been reached after
careful consideration of the evidence obtained. I firmly believe they set out the roadmap for our
best chance of delivering the high-quality hospital facilities the Island needs, in a way that’s both
affordable, and achievable, in the shortest possible timeframe.
Sir, the causes of our dramatic change of circumstance lie some way from our shores. No-one on
this island is to blame for the fact that it is no longer safe, nor would it be responsible, to commit to
an unstoppable project, the costs off which would fast be approaching £1bn, were it to be
commenced in its current form.
With this in mind, I would politely urge the Assembly to give these recommendations their most
serious consideration. It is time to put aside the public discord of the past, and progress, at pace,
in concert with our Health-care workers, Clinicians, Scrutiny Panels, Assembly Members, and all
Islanders, including neighbours and interest groups.
Finally, I should like to offer my sincere thanks to the Principal Expert Advisor, those Government
of Jersey officers directly involved in the production of this Review, (and those supporting its
delivery in the background), the stakeholders who have provided evidence that led to its
conclusions, and the individuals providing quality assurance.
Thank you, Sir
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