Our Hospital Site Selection: Overdale (P.123/2020) – amendment [P.123-2020 Amd.]

STATES OF JERSEY

OUR HOSPITAL SITE SELECTION: OVERDALE (P.123/2020) – AMENDMENT

Lodged au Greffe on 13th November 2020 by the Future Hospital Review Panel

STATES GREFFE

2020  P.123 Amd.

OUR HOSPITAL SITE SELECTION: OVERDALE (P.123/2020) – AMENDMENT ____________

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Designate  the  existing  paragraph  as  paragraph  (a) and  insert  the  following paragraph –

"(b) to request the Council of Ministers to present a report to the States prior to

lodging any proposition seeking the Assembly's approval of the Outline Business Case for the new Hospital, to contain the following –

1. the performance detail from the demand-modelling with all key demand and capacity assumptions linked to the sizing of the new hospital and how this links to the role and function of health facilities as set out in the Jersey Care Model;
2. a statement by clinical specialty that senior clinical representatives have agreed and signed off their respective departments, both room areas via the Schedule of accommodation, and drawings that match the latest hospital plans;
3. the proposed hospital total area including all main hospital street communication  corridors,  department  circulation  and  non-roof plant,  in  order  to  provide  a  total  inclusive  Schedule  of Accommodation;
4. the  calculations  for  all  project  cost  including  non-works  costs, equipment  costs,  non-medical  costs  (including  the  whole  life transport solution), inflation, optimism bias, a clear split of all project  contingencies,  the  premium  costs  for  materials  and confirmation that all "current exclusion" are subject to at least the latest provisional sums;
5. an analysis that the aligned programme has taken account of both the programme impact, Covid-19 and Brexit;
6. a full breakdown of the assumptions and amounts for recurring savings supporting the overall affordability of the project for both capital and clinical/support revenue; and
7. forecast  Cost  at  Completion,  broken  down  into  components identified  in  Paragraph  6  of  the  report  accompanying  this proposition."

FUTURE HOSPITAL REVIEW PANEL

Note:  After this amendment, the proposition would read as follows –

THE STATES are asked to decide whether they are of opinion

1. to approve Overdale as the preferred site for Jersey's new Hospital, which is to be delivered within the boundaries illustrated on the plan in Appendix 1 to the report accompanying this proposition; and
2. to request the Council of Ministers to present a report to the States priorto lodging any proposition seeking the Assembly's approval of theOutline Business Case for the new Hospital, to contain the following –

1. the performance detail from the demand-modelling with all keydemand and capacity assumptions linked to the sizing of the newhospital and how this links to the role and function of healthfacilities as set out in the Jersey Care Model;
2. a statement by clinical specialty that senior clinical representativeshave agreed and signed off their respective departments, both roomareas via the Schedule of accommodation, and drawings that matchthe latest hospital plans;
3. the proposed hospital total area including all main hospital streetcommunication  corridors,  department  circulation  and  non-roofplant,  in  order  to  provide  a  total  inclusive  Schedule  ofAccommodation;
4. the calculations for all project cost including non-works costs,equipment  costs,  non-medical  costs  (including  the  whole  lifetransport solution), inflation, optimism bias, a clear split of allproject  contingencies,  the  premium  costs  for  materials  andconfirmation that all "current exclusion" are subject to at least thelatest provisional sums;
5. an analysis that the aligned programme has taken account of boththe programme impact, Covid-19 and Brexit;
6. a full breakdown of the assumptions and amounts for recurringsavings supporting the overall affordability of the project for bothcapital and clinical/support revenue; and
7. forecast  Cost  at  Completion,  broken  down  into  componentsidentified  in  Paragraph  6  of  the  report  accompanying  thisproposition.

REPORT

Background

1. P.123/2020, Our Hospital Site Selection: Overdale' (hereafter P.123/2020') was lodged by the Council of Ministers on 6th October and is scheduled for debate on 17th November 2020. The Proposition seeks the approval of the States Assembly for Overdale to be the preferred site for Jersey's new hospital.
2. The Review Panel seeks to amend the Proposition to include an obligation for the Council of Ministers to bring a report back to the States Assembly by March 2021 clearly addressing the matters detailed in the amendment.
3. During its review of P.123/2020, the Panel found that in the absence of an Outline Business Case at this stage, there is very little detail as to the full costs of this project, beyond the headline figures. It is noted that a total development budget of £804.5 million has been proposed for this project. However, during evidence- gathering, the Panel's expert advisers found that this figure is not based upon sufficient detail to make it robust and deliver confidence that it will not change as the project progresses. The advisers further explained that the design of the hospital is still at a pre-concept phase, the cost of land acquisition is still unknown and any technical challenges with the project remain to be revealed.
4. Furthermore, the advisers also found that the timescale identified for the Our Hospital' project is extremely challenging, and slippage will also lead to pressure on the overall costs. Therefore, as the project proceeds, there is a significant risk that the outturn costs exceed the total budget identified, unless strict management and governance procedures are put in place.
5. As stated above, the total development budget for the preferred site at Overdale is currently estimated as £804.5 million. This figure consists of £550 million of costs for the Design and Delivery Partner plus £254.5 million of other costs, including land acquisition and client contingency. During its review the Panel and its advisers were not provided with affordability calculations that confirm that this sum is affordable and how it will be financed. In this regard, the Panel agrees with its advisers that whilst cost and affordability would normally feature significantly in any options appraisal, it is noticeably absent from this site selection process. The Panel notes that the funding approval for the chosen scheme will be brought to the States Assembly via a separate finance paper, in the form of an Outline Business Case, in May 2021.
6. The Panel therefore proposes that ahead of the final delivery of the Outline Business Case, the States Assembly receives a report with the details as set out above and including the following:

-  Forecast Costs at Completion, broken down into the following components:

1. Construction of the hospital and ancillary facilities (works costs)
2. Furniture fixtures and equipment
3. Decant costs
4. Delivery Partner contingency
5. Site specific costs

6. Pre-construction services agreement
7. Site acquisition costs (+ reprovision of costs if any)
8. Services and utilities
9. Optimism bias and client contingency
10. Migration costs (from exiting hospital to new facility)
11. Pre-operational costs
12. IT and specialist equipment
13. Demolition of existing hospital
14. Government of Jersey internal costs
15. External adviser costs
16. Total forecast development budget

Without a joined-up approach to the Our Hospital' Project, which includes strategic, design and clear inclusive capital assumptions, the States Assembly risks being placed in a position where it cannot have confidence in or appropriate assurance about the total cost.

Financial and manpower implications

It is not expected that adoption of this amendment will require any additional funding, or resourcing, in terms of personnel. It should, however, be noted that there may be implications in respect of the time required to undertake the additional work identified in the amendment. It is expected that this would be undertaken from within existing budgets and manpower resources.