The Future Hospital Review Panel is seeking to reduce the maximum expenditure for the completed Our Hospital project from £804.5 million to £550 million. The panel has also said that government plans to borrow more than £750 million for the project were too much and have also called for the loan to be capped at £400 million.
Senator Kristina Moore, who chairs the panel, said a reduction in borrowing from £756 million was ‘sensible’ and that the scale of the project was not justified. The budget and financing for a hospital at Overdale is due to be debated at the next States sitting, on 5 October.
The Our Hospital project team are expected to unveil revised plans for the new facility – which is due to be built at Overdale – later this week following a public consultation which was held earlier this year.
Senator Moore said that the panel had lodged the amendment as it had concerns over the project’s outline business case. At the panel’s final public hearing last Friday, Deputy Inna Gardiner queried why detailed analysis of the running costs of the proposed new hospital were not included before next month’s crucial funding vote. Responding to her questions, Deputy Chief Minister Lyndon Farnham disputed that it was ‘misleading’ not to have these details.
He said he hoped to complete the project ‘without utilising all of the budget’.
Borrowing should be reduced if there is a lower budget, the panel said in its report, adding that alternative funding could be used to reduce overall borrowing. The panel has asked the Treasury Department to explore other options, including the use of the ‘windfall payment’ of around £40 million resulting from JT’s sale of its ‘Internet of Things’ division.
Commenting after the amendment had been lodged, Senator Moore said: ‘The panel’s early findings in its review of the outline business case of the Our Hospital Project have identified that it does not provide the evidence needed to justify the scale of the project. In addition, when asking members of the public if they believed the budget of £804 million was appropriate, the answer was no.
‘With the lack of justification and wider reluctance to commit the people of Jersey to such a large budget, the panel has lodged this amendment in order to allow the States Assembly to impose budgetary restraint and calls on the project to be revisited to fit a smaller budget.’
She added: ‘Following the proposed reduction in project budget the panel has agreed that a reduction in borrowing is sensible. The panel is of the opinion that leveraging wider States of Jersey income will also negate the need to fully fund the project by committing to a potential bond and the associated costs.’
