THE current hospital project is ‘no longer feasible’ due to the worsening financial climate, the Infrastructure Minister has said as the government begins reassessing the possibility of a dual-site option.
Deputy Tom Binet, who is leading a review into the £804 million Overdale scheme, said that rises in inflation, borrowing rates and global economic instability meant that research into whether there was a more ‘affordable and appropriate’ alternative was now essential.
His comments came shortly after the government confirmed that, as revealed exclusively by the JEP on Thursday, work on 100 new apartments in Kensington Place – close to the Gloucester Street hospital site – was being blocked in order to retain areas for potential changes to the hospital project.
The move has reopened the possibility of a dual-site hospital across Overdale and the existing General Hospital site but also resulted in the government breaking an already-agreed contract with developers Dandara, which had begun demolishing the former Stafford and Revere Hotels to make way for a complex of flats.
Deputy Binet said he was not yet able to confirm how much breaking the contract might cost the government.
The halted housing project in Kensington Place would have delivered one-, two- and three-bedroom flats through social-housing provider Andium Homes.
‘Discussions are ongoing with Dandara about what the cost of the contract cancellation will be, and one would hope they will be reasonable,’ Deputy Binet added, noting that ‘none of the actual construction work has started’.
The government has said that a new site-assessment process would not be part of the Our Hospital project review, but that it would examine existing areas within its health estate – including Overdale, Gloucester Street and adjacent sites such as Kensington Place – as well as opportunities for a longer-term phased development at Overdale or Gloucester Street and the potential use of secondary sites to complement a primary hospital.
‘The current project is no longer feasible [due to] rising levels of borrowing, changes in inflation, and the Strategic Reserve is not going to perform as planned given the levels of global instability and [the] financial climate,’ said Deputy Binet, who is a former member of the Friends of Our New Hospital campaign group.
‘The review is not optional – it’s essential.’
The government have also said Deputy Binet will be supported by a principal expert adviser with ‘extensive experience’ of large-scale capital projects in health and care, and that the review team would also include Health Minister Karen Wilson and Assistant Health Minister Rose Binet.
Addressing criticism from Deputy Lyndon Farnham, who has questioned the Infrastructure Minister’s ability to be impartial given his previous work with the hospital campaign group, Deputy Binet said: ‘I was critical of the process and the way it was managed, but I think the outcome more or less speaks for itself.
‘We are not starting with any pre-conceived [outcomes] but what we have done is taken action to make sure that we have sensible options available.’
