Concern at ‘staggering’ borrowing for hospital

PLANNED borrowing of £800 million to fund the new hospital is a ‘staggering amount’ and could divert money from helping health staff as they face a ‘culture crisis’, a Scrutiny head has said.

Overdale Hospital. The site of the proposed new hospital. Picture: ROB CURRIE. (31379742)
Overdale Hospital. The site of the proposed new hospital. Picture: ROB CURRIE. (31379742)

Earlier this week, the Our Hospital Outline Business Case revealed that ministers were looking at taking out two £400 million bonds this year to fund the proposed new facility at Overdale, with the money to be placed in the Strategic Reserve and drawn from there when needed.

The States will be asked to back the funding proposal in October, but the Corporate Services Scrutiny Panel – chaired by Senator Kristina Moore – has announced a review of the business case, including the funding proposal.

Senator Moore said she was concerned about the cost and the funding mechanism, at a time when staff shortages and low morale had been reported at the General Hospital. In recent weeks, a number doctors have raised concerns with the JEP regarding low morale, difficulties in recruitment and a disconnect with management, prompting senior managers to play down fears of a crisis at the hospital.

Senator Moore said: ‘The annual cost of the borrowing could be £20 million and they have got to cover that, so if they want to increase pay for nurses or teachers, that’s going to be impacted.

'What we’ve discussed with the panel’s advisers is that they will look at the whole-life cost of the hospital, including borrowing, maintenance and staffing.

‘We’re seeing at the moment that there are culture issues within the hospital, so we need to look at the cost of living and the impact that that has on nurses in particular. Doctors are already seeing difficulties in recruiting and particularly retaining staff.

Senator Kristina Moore. Picture: ROB CURRIE. (31383843)

‘We want to investigate what impacts the proposals the government are bringing will have upon these sorts of elements.’

The medical director of the Our Hospital project, Professor Ashok Handa, has said the £800 million figure translates to £3.51 per person a week by spreading the cost over Jersey’s population for a 40-year period.

Senator Moore said that when former Treasury Minister Alan McLean brought his funding proposal for the previously planned redevelopment of the existing hospital in 2017, a ‘blended’ solution had been presented for the much lower budget it had.

‘£466 million was the maximum budget for the previous Gloucester Street hospital, and that was including inflation and contingency, in comparison with our current project, which is £804 million.

‘What Senator McLean proposed was borrowing up to about £275 million and then the rest he wanted to fund from the Strategic Reserve. He also proposed that the cost of borrowing and ongoing finance and administration costs be borne from the Strategic Reserve.’

The Senator added that she and other politicians had also at the time proposed other funding solutions such as a community bond, where money is borrowed from the people of Jersey rather than international lenders, and asset sales.

She said: ‘At the time, I was trying to promote a slightly different blended solution of my own, which was using proceeds of the sale of an asset to contribute to a quarter of the cost.

‘I was also trying to encourage a community bond. There has been talk about a community bond again, but we haven’t seen that emerge in reality.’

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