Our Hospital – Budget, Financing and Land Assembly (P.80/2021): second amendment (P.80/2021 Amd.(2)) – comments

STATES OF JERSEY

OUR HOSPITAL – BUDGET, FINANCING AND LAND ASSEMBLY (P.80/2021) :SECOND AMENDMENT (P.80/2021 AMD.(2)) – COMMENTS

Presented to the States on 5th October 2021 by the Council of Ministers

STATES GREFFE

2021  P.80 Amd.(2) Com.(2)

COMMENTS

Neither the Future Hospital Review Panel's (Panel) Report on P.80/2021, nor their Advisors' reports challenge the conclusion of the Outline Business Case (OBC) that the best performing option is a new build hospital on the Overdale site.

Indeed, the Panel's Advisors have agreed that that £804.5m is an appropriate amount to invest in a hospital of the size and scope that has been planned, as shown on p.21 of Currie & Brown's report:

The estimated cost for the preferred new build option has generally been based on the design and scale of which is informed by the schedule of accommodation. Whilst the justification for the full schedule of accommodation has yet to be provided, the costs presented for the RIBA Stage 2 design are realistic and robust.

They have, however, challenged that the OBC does not fully justify the proposed size of Our Hospital and propose to reduce the overall budget to £550m. The Panel's report appended to its Amendment to P.80/2021 does not provide any firm basis for reducing the total budget by almost a third from £804.5m to £550m and does not illustrate what services would be lost for this reduction in cost.

However, the Panel's Amendment suggests certain project elements could be revisited including:

• Reducing the overall size of the hospital

• Reducing the number of wards

• Removing atriums and beautification'

• Delaying build of the Knowledge Centre

• Reducing the size of the multi-storey car park

• Reducing the level of overheads and profits

• Reducing the amount of land purchased

• Reducing the allowances required for inflation and contingency.

The Panel's Amendment does not explore the implications of revisiting these elements. A new hospital campus for Jersey, that provides the full range of services necessary to appropriately support the Island's health and care needs and is future-proofed, cannot be built for £550m.

Reducing the budget would mean that a new hospital for Jersey would not be deliverable by 2026, when costs to maintain the current estate escalate sharply.

Under current plans, we have a project that is able to progress quickly. A reduction in budget would cause a delay and have knock-on implications in terms of cost of operating the project and inflationary impact. Both of these issues would erode the value of £550m, meaning that the Island would get less for its money.

Delaying or descoping certain elements of the project does not represent a legitimate economy - those elements are likely to need to be provided or enlarged at a later date and require further investment. They are also critical to the running of the facility.

We must remember that the design solution for Our Hospital has been led by our Island's clinicians – those who know most about what services Jersey needs and requires. Indeed, any reduction in size or scope of the Our Hospital Project would be most strongly resisted by the clinicians.

The Panel has attempted to make comparisons and suggested that Our Hospital is more expensive than hospital builds in the UK.

However, like for like comparisons are often difficult to make due to the varying scope of different hospitals, the availability of published costs (and what these costs include), and each scheme's unique geographical and environmental situation.

It must be noted that costs to deliver on an island are likely to be higher due to geographical constraints and import costs as well as the more complex supply chains. For example, the Design and Delivery Partner has suggested that Air Handling Units include 12% delivery costs, whereas in the delivery costs would be expected to be in the region of UK 2.5%.

In addition, costs to deliver on an island are likely to be higher due to geographical constraints  and  import  costs.  For  example,  the  Design  and  Delivery  Partner  has suggested that Air Handling Units will include 12% delivery costs, whereas in the UK the delivery costs would be in the region of 2.5%.

The Our Hospital Project's benchmarking exercise, on the other hand, included a number of island hospitals, as opposed to mainland city hospitals, of a similar scope.

If the budget for Our Hospital is reduced to £550m, the significant volume of rework that will be required to update design and engineering solutions will mean that a hospital will not be deliverable by 2026, when costs to maintain the current health estate are projected to rise considerably.

As a result of Jersey's island context, we have to provide a hospital which makes us as self-sufficient as possible. To do otherwise has an impact on health outcomes, patient and family experience, and island positioning and economic resilience.

Reducing the scope of clinical services delivered from Our Hospital is likely to mean that more Islanders will need to travel off-Island for treatment, potentially impacting ongoing revenue costs.

Further  detail  about  the  implications  of  each  of  Scrutiny's  proposed  reductions, removals and delays follows on pages 3-7 below.

More detail about the OBC follows on page 9-11 below.

The Panel also propose to reduce the level of borrowing from £756m to £400m, which will create a funding gap of £101.5m. This is as a result of the Panel's proposal to reduce the budget cap by £254.5m but reducing the maximum level of borrowing by

£356m. This difference of £101.5 million is currently unfunded – funding would need to be found either through:

• The Consolidated Fund and the potential for unpalatable tax increases

• Utilising the Strategic Reserve –

• This is not aligned with the current objectives of the Strategic Reserve
• Partially depleting available funds to manage future economic crises
• Compromising  the  overall  fiscal  outcomes  for  the  Island.   More information  about  the  anticipated  rates  of  return  of  the  Strategic Reserve vs interest rates payable on borrowing can be found in Table 5, paragraph 10.7, page 27 of P.80/2021.1

• Reprofiling the current capital programme and therefore delaying or stopping other important public sector projects such as school improvements

The Panel's Advisors have concurred that the most appropriate approach to financing a new hospital for Jersey would be through borrowing. Page 4 of CIPFA's Report appended to S.R.13/2021 notes:

The recommended approach using Bond Finance against alternative funding sources outlined within the proposition is considered appropriate. In context, we would consider Bond Finance to be the most appropriate funding solution and the approach used by Treasury advisors to determine the best funding solution, is considered to be robust.

In addition, on p.9 that:

Bond Financing is still considered to be the optimal solution if this level of borrowing is deemed to be required rather than the previous recommendation of a blended approach. This is due to market changes since such an approach was recommended in a previous iteration of this project in 2017.

The current economic climate will allow the Government of Jersey to borrow at historically  low  and  fixed  interest  rates,  with  no  or  minimal  penalties  for  early repayment. However, if the level of borrowing is reduced as a result of the Panel's Amendment and further borrowing is required at a later date, any increases to interest rates could significantly increase the overall costs to the Government of Jersey.

Further information on the impacts of reducing the level of borrowing can be found on pages 8-9 below.  

Project Costs and Reduction of Scale

The concept designs for Our Hospital have been approved and endorsed by the Clinical and Operational Client Group, Health and Community Services Executive Committee, Medical Staffing Committee and all Clinical Service User Groups.

Jersey's clinicians have entered into well over 1,000 hours of workshop time to hone and refine the design solution to ensure there will be adequate clinical space and

1 P.80/2021 (re-issue)

efficient clinical adjacencies to ensure that modern and best practice healthcare practices can be employed to serve the health needs of Islanders.

Our clinicians are aware that there are financial constraints and they have worked in partnership with the Clinical Director to ensure that their clinical requirements are realistic and value for money in the long term.

A  significant  majority  of  senior  clinicians  and  nurses  employed  by  Health  and Community Services are in support of the current plans for Our Hospital. These key groups have publicly expressed their support for the current project plans.

Reducing the budget by over 30% would undermine the work put in by clinicians in developing  design  solutions  and  risk  design  solutions  that  are  not  considered  by clinicians to be appropriate for Jersey and its island context.

There would be significant risk of disengaging and disenfranchising clinicians from the Our Hospital Project. Losing clinical support for the project would be a significant risk to the deliverability of this project, as has been experienced during previous iterations of the project.

The Panel proposes that a budget reduction of over 30% could be achieved by reducing, descoping or delaying certain elements of the project. However, they do not put forward the quantum of potential savings that could be realised by each of these changes, and how these correlates to an overall reduction of the total budget by over £250m.

The areas that the Panel challenge are outlined below:

• Building size: the Panel suggests that the building size could be reduced. However:

• The Panel has provided no clinical or professional advice to support this statement
• Reductions to the overall building size have already been achieved based on detailed consultation with clinicians.
• There is a limit to reductions that can be made without compromising service  delivery. Many  States  Members  spoke  movingly  in  the previous Future Hospital debate regarding the requirement for patient privacy and dignity – reducing the building has potential to impact this.  
• We would need to ignore learning from COVID and to narrow corridors for example, which could impact the functionality of Our Hospital.  
• Reducing the building size, reduces its flexibility to adapt to changes that may be required over the next 40 years and proven by clinical input to be a false economy.  
• We could spend £550m now but need to request additional funding to complete retro fitting of the main building and piecemeal development of new facilities we had delayed.

• Reduction in wards: the Panel suggests that the number of wards could be reduced, including private patient provision.

• Bed numbers have been derived from demand and capacity modelling and ward configuration is based on staff to patient ratios.
• Jersey General Hospital already has a 14-bed private patient ward, so the current plans include an increase, not a new scope. The private patient service provides the opportunity to generate income to offset HCS operational costs and to enhance provision of public services. A private patient provision will also support Islanders to be treated closer to home and prevent private patient work going off Island.
• Learning from COVID has suggested it is prudent to create a separate space that can function as a hospital within a hospital in the event of an emergency or a future pandemic. For this space to be viable, it must be used outside times of emergency and private patient work would be housed as this would cease in times of emergency. However, it can also be used for public patients in times of peak demand.

• Building design:  the Panel suggests removing atriums and beautification. However,

• There  is  a  significant  body  of  evidence  that  suggests  that  the environment in which a patient is treated supports their recovery. A solely functional building has slower recovery rates than those with green spaces, courtyards and pleasant areas for convalescence.2
• There is no health without mental health and it is crucial that Our Hospital is a healing and nurturing environment.
• Entrance  ways  and  atriums  are  designed  for  appropriate entrance/exit/wayfinding,  they  are  not  superfluous or  extravagant areas.
• This building will be a fixture of the Island's landscape for generations to come. It is important that it is designed well and is something we can be proud of, rather than trying to build a functional, utilitarian box. The architectural design debate needs to be led by professional designers working with the community, the Jersey Architecture Commission and the Planning service.
• The courtyards are an integral part of delivering natural light to all patient facing areas and maximising them in staff areas. This will optimise patient experience, reduce length of stay and improve staff wellbeing

• Knowledge centre: the Panel suggests that the construction of the knowledge centre could be delayed. However,

• It would reduce the immediate investment but increase cost to the HCS Department budget. The public would still pay for training and clinical development, but off-island education would mean clinicians are away

2 One example of an academic paper that refers to such evidence can be found here https://www.sciencedirect.com/science/article/pii/S0360132312001758#fig1

from their clinics. In turn there would be more pressure on colleagues to cover their work and/or use of locum or bank staff.

• There would be associated costs of travel for clinical training, as well as associated accommodation costs, which also have an associated carbon footprint.
• Delaying the construction of the knowledge centre may reduce capital costs but increase revenue costs.
• If it is later decided that a knowledge centre would be desirable, there would be an inflationary impact on any build and the site plan would need  to  accommodate  for  future  provision  potentially  rendering  a portion of the site redundant until a future decision could be made. This would not be a cost-effective decision.
• We  must  remember  that,  most  importantly,  clinical  staff  require continuous professional development to ensure patient safety and to maintain their licences to practice.
• Lack of adequate training facilities impacts the ability to retain and recruit staff and any ability to generate income by providing training events for off Island health professionals.

• Multi-storey car park: the Panel suggests that the provision for car parking could be reduced. However,

• In July 2020 when briefing the Panel and Assembly Members this was estimated  to  require  800  parking  spaces.   We  have  implemented feedback from our political colleagues and the capacity currently stands at circa 550 with an entire deck removed.
• A car park is a requirement to provide sustainable access for staff, patents and visitors, particularly those who cannot walk or cycle.
• We must remember, this campus must be useable. Without adequate parking  and  servicing  on  site,  there  will  likely  be  adverse neighbourhood impacts as visitors look elsewhere to park.

• Highways: the Panel suggests that the ambition for road alterations could be reduced. However,

• The extent of highways alterations is derived from the need to provide safe and sustainable access for emergency vehicles, staff, patients and required hospital logistics services, such as deliveries
• the  States  Assembly  decision  to  adopt  the  second  amendment  to P.123/2020 which required the project to maximise the allowance for sustainable modes of transport and minimise the impact on homes, leisure facilities and surrounding environment
• We must remember, the road is a simple single lane in each direction solution, which meets local highway standards, and is safe all year and every hour round

• Overhead and Profits: the Panel suggests that this should be set at a maximum of 6.5%. However,

• Overheads and profits (OH&P) value of 9.5% for the construction works was  informed  by  a competitive  tender  process  and  was  the lowest of the tendered rates.
• This is the largest real estate project undertaken on Jersey and a unique, standalone project so there are significant set-up costs for establishing the delivery entity with all support functions on island.
• Comparable island-based projects recently tendered in Europe have seen OH&P levels above 10%.
• Typical OH&P values for large projects on Jersey procured via a two- stage tender process are 8-10%.
• Comparable sized UK health projects have OH&P of c.7.5% but these are framework rates so there is repeat business and associated benefits of economies of scale.
• Cost advice confirms an overhead premium in the region of 2% for establishing a delivery to entities on Jersey is reasonable.
• An OH&P increase of 1% is likely when the construction market is pricing stand-alone projects of this type.
• Whilst we acknowledge that there are some hospital projects being delivered on the UK mainland for 5-6% OH&P these are typically much  smaller  schemes  and  procured  through  frameworks (so benefiting from repeat business / economies of scale).
• We do not recognise projects at the lower end of the scale stated (3%).

• Compulsory purchases: The Panel states that not buying more land would be preferable. However,

• The project has acquired the majority of land required without the need for compulsory purchase.
• There  remains  some  land  parcels  that  are  required  to  deliver  the hospital, and compulsory purchase may be required if a negotiated position cannot be reached with landowners.
• If these areas of land cannot be acquired, there would be rework needed on the design solution, which would have a time and cost implication
• The compulsory purchase process also serves as a mechanism to:

Resolve issues where land is already in Public ownership but is subject to rights or covenants that may need to be cancelled or modified.

Put in place new rights, which may either be temporary for construction  and  or  longer  term  for  servicing,  use  and maintenance.

• Inflation and contingency: The Panel assert that reducing costs elsewhere will then reduce the contingency required. However,

• Included  within  the  current  costs  is  an  appropriate  allowance  for Optimism Bias in accordance with Green Book guidance, as a means to anticipate and managing financial risk, particularly at this stage in the project.
• The  Government  of  Jersey  cost  consultants  have  undertaken  an Optimism  Bias  assessment  on  the  New  Build  Option  which  has provided  a  calculation  of  6.50%  for  the  project,  representing  an appropriate level for this stage of the business case process.
• During the lifetime of the project the Optimism Bias allowance will be replaced with progressively more accurate costs as the design and delivery stages of the project develop, any reductions/savings will be identified, and the client can agree the appropriate course of action for those sums.
• It should be noted however, that whilst Optimism Bias will decline as the scheme achieves greater cost certainty, the reduction in Optimism Bias will often be replaced by other costs elsewhere and therefore not reduce the total.
• By close of the Full Business Case stage any remaining optimism bias should be very low. Costs will have firmed up and risks identified and included in the risk analysis and risk register. A chart illustrating these principles can be found on p 16 of P.80/2021/
• Ministers  have  been  transparent  with  the  Assembly  regarding  the estimated  capital  investment  required  for  this  project  including contingency.

The Design Solution and Cost

We  must  remember  that  the  designs  for  Our  Hospital  have  been  developed  in partnership with our Island's clinicians – those who know best about how we need to deliver healthcare.

We must also remember our Island context and that we do not have the luxury of a nearby hospital for patient transfer or the provision of specialised services – we must provide as much as possible under one roof.

Cutting the range of services by almost a third would leave many more Islanders needing to travel off-Island for treatment and would not address many of the legacy issues within the Health and Community Services estate, such as inadequate mental health services, which would still need significant investment or replacements.

The Panel states that the message received from the public is that Jersey needs a good hospital that caters for the needs of the community. However, the Panel does not provide any definition of good' and how this differs from the proposals put forward in the Our Hospital RIBA Stage 2 report.

Many months of work, including extensive clinical and other stakeholder consultation, detailed site evaluations, development of design and development of the OBC has established that an investment of up to £804.5m is required.

There has been no change in the total anticipated capital cost of the scheme between P.123/2020 and publication of the OBC. There does not appear to be any evidence base for reducing this by over 30% as proposed in the Panel's amendment.

Various submissions to the Panel's review and cite examples of hospitals which have or will cost significantly less than £804.5m. The nature, size and specification of these other schemes have not been specified but are highly relevant in order to confirm that like for like comparisons have been made.

Comparisons to central London hospitals, for example are not relevant as they may cater for a smaller range of services than Our Hospital, given that in London one can travel between several different hospitals, which one can't do within an Island like Jersey.

Mainland schemes also do not have the import premiums that we are subject to as an Island. The Panel's Advisors undertook a benchmarking exercise which suggests that Our Hospital costs per square metre, once the Jersey factor has been accounted for, are 3-4% higher than their median benchmark.

The benchmarking providing by the OHP Team during the review process included Island projects to make a more accurate comparison and Our Hospital was established as being towards the middle of the range in cost per square metre and indeed, as stated in the executive summary, the Panel's Advisors do not disagree with the size of investment for the size of hospital proposed.

The Panel's amendment is drafted with a view to what Our Hospital "should cost" rather than reference to sound, evidenced estimates of what it will cost. This creates an enormous risk that an unrealistic budget is agreed and in order to keep within that budget, services may be cut and patient care compromised.

Many of the thresholds cited by the Panel in their review of the Proposition, from OH&P levels  to  construction  costs,  are  not  credible  in  the  view  of  the  project's  Cost Consultants, Turner & Townsend (T&T) who have reviewed the cost information to ensure the proposal represents value for money.

T&T have significant experience on major UK healthcare new builds delivered in recent years and have benchmarked the net construction cost and consider it to be a reasonable value in the current market.

The Panel's amendment suggested delaying elements of the project until funding is available; this does not deliver a project with a reduced cost, but merely defers costs under possible future phases with little or no certainty of completion. This might be seen as sleight of hand by the public if this advice were to be followed. It is merely playing with optics on the overall Hospital costs which appears counter to the Panel's comments elsewhere in relation to Decision Makers being fully informed of financial implications of the project.

As previously highlighted phasing the project in such a way would ultimately increase costs, render elements of the site redundant for an indeterminate period of time and in

the meantime risk sub-optimal services and lost synergies and efficiencies which the campus site could offer.

Affordability, bond financing and borrowing

The Panel's Amendment creates a funding gap which will need to be sourced. They propose  amending  the  budget  cap  by  £254.5  million  but  the  maximum  level  of borrowing is reduced by £356million. This leaves a difference of £101.5 million which is currently unfunded, interestingly the Panel make no concrete proposals as to how this should be addressed.

The Panel references the recent special dividend from JT, but this is already allocated to other projects in the Government Plan 2022-25, although Council acknowledges that this is not yet approved.

In attempting to amend the proposition to reduce financial risk, the Panel are potentially increasing it by leaving a funding shortfall of £101.5million and capping the borrowing limit which is likely to require the use of investment reserves or reallocation of existing Government budgets from other services.

The Council of Minister's proposed solution retains reserves fully intact – thus allowing maximum flexibility to respond to future events. Any solution which partially utilises reserves:

• reduces that level of flexibility for the future

• foregoes the opportunity cost of investment returns on those reserves

• risks a negative impact on the States' credit rating

The Ratings agency S&P cite Jersey's liquid fiscal assets as "a key rating strength". Any reduction in those reserves could potentially lead to a downgrade – perhaps more so than an increase in the level of debt. There is evidence of countries who have retained reserves  and  increased  borrowing  with  little  or  no  impact  on  their  credit  rating (e.g. Norway, Qatar, Saudi Arabia).

Use of reserves now may require borrowing in the future when interest rates are likely to be higher or the appetite to lend to the States may be diminished. Replenishing reserves, if desired, may well require tax rises in the future, which is unlikely to be palatable.

The Fiscal Policy Panel have commented that the value of Strategic Reserve should be increased to approximately 30% of GVA - utilising the Strategic Reserve now makes that target even more challenging.

It is anticipated that investment returns will cover the annual financing costs of the borrowing and growth in reserves will repay the capital when it falls due.

The Strategic Reserve Fund will still be larger when the debt is repaid than if it had been used to pay for Our Hospital. This is clearly demonstrated in the Council of Minister's Report accompanying P.80/2021 on page 39.

The Panel's adviser CIPFA has suggested that utilisation of the Strategic Reserve to finance the borrowing costs means foregoing investment returns on those funds used. However, this fails to acknowledge that without borrowing, the Strategic Reserve will already have been spent and those returns would not be achieved anyway. This point is also well demonstrated in the chart referenced above.

The Council of Minister's proposed financing solution allows the Strategic Reserve to continue to grow whilst at the same time servicing the financing costs and ultimately repaying the borrowing when it falls due.

This is a flexible solution with the investment strategy deployed subject to regular and pro-active monitoring and oversight. This provides the ability to react quickly to external factors which might impact future investment performance and ultimately the ability to achieve repayment of the debt in the long-term.

A cautious and defensive strategy will be deployed to invest unspent proceeds of debt issuance prior to planned expenditure so that funds remain resilient to the risk of downturn.

The desired objectives can be achieved with a high degree of confidence and the proposals in the Proposition are more flexible over the long term. Should there be changes in Jersey's economic position or in global markets we will be able to take steps to address these if we still have reserves.

The Proposals in P.80/2021 therefore are a way of preserving choices for Jersey and protecting our financial future.

Outline Business Case Methodology

The Panel's advisers challenge that the Our Hospital OBC does not follow HM Treasury Green Book Guidance.

The Panel's challenges on adherence to the guidance do not impact the conclusions of the OBC. Had the guidance been followed to the letter, the conclusion of the OBC would not be different.

Ahead  of  the  finalisation  of  the  OBC  in  June  2021,  an  independent  review  was undertaken by Mott McDonald. Mott McDonald are currently acting for the Department of Health in England reviewing new hospital OBCs as part of the UK Governments HIP2 Programme. They are therefore uniquely placed to understand the requirements of a new hospital Green Book compliant business case. Mott MacDonald did not raise any concerns around compliance with Green Book and made a series of constructive suggestions to strengthen the OBC which were addressed in the final version.

We must remind members that the HM Treasury Green Book provides guidance for constructing business cases and it is not a prescriptive rulebook, as Section 1.2 of the Green Book states:

The Green Book is not a mechanical or deterministic decision-making device. It provides approved thinking models and methods to support the provision of advice to clarify the social – or public – welfare costs, benefits, and trade-offs of alternative implementation options for the delivery of policy objectives.

There is no policy that prescribes the use of the HM Treasury Green Book methodology for Government of Jersey business cases.

However, the methodology is best practice and has been applied in an appropriate way given the decision-making context of the project.

In particular, certain decisions were made earlier during the project at an advanced Strategic Outline Case stage:

• An option appraisal of sites was completed early and the preferred site decided by the Assembly and therefore not revisited at OBC

• An options appraisal of the proposed scope of Our Hospital was completed to inform the site selection process and need not have been revisited

• There had been a significant volume of clinical input as part of the draft functional brief, which was published at Strategic Outline Case stage.

• A business as usual (BAU) is unfeasible -a fact established as long ago as the adoption of P.82/2012

• Although revenue figures continue to be developed -

• Annual revenue budgets for staffing and maintenance are already in in place.
• Although bigger than the current Jersey General Hospital, Our Hospital consolidates a number of services currently spread across HCS estates and Facilities Management services – creating efficiencies through improved clinical adjacencies
• HCS has an existing Facilities Management budget – so this does not represent a new budget to establish, it is a change to an existing budget
• Further efficiencies will be gained by using newer technology (e.g., electric power)
• A separate Facilities Management business case will outline costs for managing and maintaining the new hospital
• Aligning the OBC development with this piece of work would have caused a significant overall delay to the project with associated cost implications and additional investment in maintaining HCS estate
• Similarly, workforce modelling and planning is ongoing. What we do know is that we already have a functioning, staffed hospital
• HCS  already  has  a  staff budget and  most  staff  will  move  to new hospital
• Therefore, a re-staff or whole new workforce is not required and we need to work to understand the variances that are projected to occur.

With regard to the lifecycle costs for Our Hospital included in the Economic Case in the OBC, the Panel's Advisors, Currie & Brown note on page 20 of their report that:

Lifecycle costs for the new build option equate to £56/m² per annum. Adjusting for the Jersey factor this forecast is within expected benchmarks for the life cycle cost for new acute healthcare facilities.

Demand and capacity modelling, which has been provided to the Panel, was undertaken to inform the functional content of Our Hospital. Section 4.6 of the Economic Case on pages 68-73 of the OBC explains how the outputs of the Jersey Care Model have informed the scope and scale and an audit trail for this is provided throughout the OBC. The Functional Brief is publicly available and explains this in more detail.

The size of Our Hospital is dependent on the services and equipment required, building standards, safety standards and future proofing.

Conclusion

This debate is not just about costs. It is about the health outcomes for generations of Islanders. Although a balance needs to be struck between cost to the taxpayer now, levels of borrowing and health outcomes, the Council of Ministers believes that this balance is not at a total budget of £550m and £400m borrowing. If the Scrutiny Panel's amendment is accepted, there is the real risk that care quality, patient safety and health outcomes will be compromised, and the project will not be able to proceed.

Statement under Standing Order 37A [Presentation of comment relating to a proposition]:

"These comments were submitted to the States Greffe after the noon deadline as set out in Standing Order 37A in order for final drafting and review processes to be completed, including considering the report of the Review Panel"