Policy Brief
Hospital
History
In October 2012 the States Assembly agree on the need for new hospital.
In October 2020 the States Assembly approved expenditure of £805 million and borrowing of £756 million for the hospital.
In November 2020 the States Assembly approved Overdale as the site.
Review by the 2022 Council of Ministers
The 100 day action plan announced by the then Chief Minister in June 2022 included -
Appoint an assistant minister tasked with conducting an evidence-based review to respond within 100 days and advise the Assembly whether changes can be made to the hospital project to deliver a more affordable and appropriate alternative. This review will take place in no more than 100 days and will report back to the States Assembly by 20 October 2022
In the event the Infrastructure Minister took on this responsibility.
The results of the Review of Our Hospital Project were announced on 1 November 2022. The press release announcing the results of the review included –
The review led by the Minister for Infrastructure, Deputy Tom Binet, found the current plan for a new hospital at Overdale is no longer affordable or appropriate within the funding approved by the States Assembly.
It recommended the plan be replaced with a phased development across two or more sites, including Overdale, Kensington Place and the existing hospital site at Gloucester Street.
The review took into consideration evidence from more than 60 key stakeholders and undertook visits to various healthcare facilities in Northern Ireland.
It found the Our Hospital Project is no longer achievable within the £804.5 million funding approved by the last States Assembly, and that it would cost between £70 million and £115 million more under current market conditions.
It found a simple relocation of the current plans to the existing hospital site at Gloucester Street would also be unaffordable and would face significant other challenges, including planning, and risk arising from working within and adjacent to an operational hospital site.
Ministers provided clear direction that construction of new hospital facilities should commence within the current electoral term, and the review did not consider a new site, as this would not have enabled the delivery of a new hospital within the required timescale.
It considered the following options
- A single development of a new hospital at Overdale significantly smaller than the current plans
- A phased development of a significantly smaller hospital at Overdale
- A phased redevelopment of the hospital at its current site
- A phased redevelopment of the hospital at its current Gloucester Street site and on the adjacent Kensington Place site
- A phased development over two or more sites including Overdale, Kensington Place and Gloucester Street
The review found a phased development over two or more sites including Overdale, Kensington Place and Gloucester Street, if required, offered the best opportunity to make the scheme more affordable and appropriate, and to manage the risk of costs rising significantly once the project is underway.
The report noted that it is challenging in the current uncertain financial climate to give precise figures in relation to the extent of saving that can be achieved.
But it identified the following potential savings at today’s prices from a phased development over two or more sites:
- Up to £50 million from the reduced need for new road infrastructure and land acquisitions
- Up to £30-60 million from separating the scheme into smaller constituent parts, opening up procurement, including to more local contractors and enabling more competitive bids
- Up to £15-30 million from future digital healthcare services delivery
- Up to £15-30 million from modern methods of construction for some buildings
- Up to £15-20 million from the market value of healthcare sites no longer required
The report noted that a phased development would open procurement to smaller contractors, which would lead to more competitive bids and make it more possible for local contractors to participate, keeping more of the money spent within the Jersey economy.
The review recommended the following schedule:
- Phase 1 – Development at Overdale to be commenced within 24 months with a 36-month programme to completion
- Phase 2A – Development at Kensington Place or Overdale to be commenced within 36 months with a 36-month programme to completion
- Phase 2B - Development at the current hospital site at Gloucester Street to be commenced within 72 months, with a 24-month programme to completion.
The review found that mental health services could be established at a separate standalone location and recommended a review of the requirements to commence immediately, with proposals on site within 36 months and a 24-month construction programme to completion.
The review recognised that the existing Jersey General Hospital must be kept safe whilst the various developments are constructed and noted that additional funding is currently being made available for this in the event that it is required.
On 31 May 2023 the Government issued a press release announcing that following a feasibility study it intended to proceed with a muti-site project comprising -
- An Acute (Inpatient) facility at Overdale
- An Ambulatory (Outpatient) facility at Kensington Place
- A Health Village at St Saviour (with capacity for rehabilitation and long-term care facilities)
The proposed Government Plan 2024 - 2027 includes a specific section on the New Healthcare Facilities Project –
The New Healthcare Facilities (NHF) Summary Strategic Outline Case (R.111/2023) and feasibility study (R.112/2023) were presented to the Assembly on 4th July 2023. The documents brought forward describe the Council of Ministers’ preferred option to deliver a programme of capital construction works representing a holistic replacement of Jersey’s health and care facilities over an eight-year period. The key elements of the planned work include delivery of:
- An acute facility at Overdale.
- Ambulatory facilities at Kensington Place and utilising some of the existing Jersey General Hospital site.
- A Health Village at St Saviours.
- The Enid Quenault Health and Wellbeing Centre at Les Quennevais, utilised on a longer-term basis.
The Council of Ministers has agreed to proceed under a phased approach, to manage financial and economic risk. We know that our current facilities are deteriorating, and failure of our acute services represents the biggest risk to delivery of health and care services, so we intend to replace these in Phase 1.
The phased approach allows costs and risk to be managed by spreading the commitment to spend over a longer period, across multiple projects. It will also provide better opportunities for modern methods of construction and minimise delays in construction due to site size and accessibility.
In addition, this approach will provide a longer timeframe for clinical strategies to be developed for future ambulatory facilities - these services being those most impacted by settings of care and future transformational interventions. This approach also provides increased capacity for future expansion on both acute and ambulatory sites.
We are clear on our commitment to deliver new healthcare facilities and to get the best possible value for Jersey, without delay. We are currently working on the programme, which estimates that the total cost to deliver an acute facility at Overdale and make meaningful progress on development of the future phases covering an ambulatory facility and Health Village at no more than £710m, including £675m during this Government plan period. However, we need to further develop and refine the proposals to support decision makers and will do so as we progress the designs for the facility. We will have better cost certainty before the end of Q1 2024, which means that this estimate might reduce. The programme team will continuously challenge planning assumptions during design and contracting stages with a view to reducing costs, communicating progress regularly to key stakeholders including Ministers, Scrutiny and States Members.
Policy of the new Council of Ministers
On 16 January 2024 Lyndon Farnham was elected Chief Minister. He indicated that he supported the plan developed by the previous Council of Ministers and appointed the same minister to continue having responsibility it.
On 9 April 2024 the Council of Ministers published its Proposed Common Strategic Policy 2022 - 2024. This set out 12 priorities for delivery in the next two years. They include –
Start building a new hospital at Overdale
Healthcare for Islanders is currently being delivered across a number of aged buildings, that do not support modern practices and present daily challenges to patients and staff.
We will start building our new hospital at Overdale during this term of office and continue to develop longer-term plans for replacing other healthcare facilities, which will include outpatient and day care services, mental health, and therapies provision.
Beginning work on the new hospital is an important step to providing the quality and level of care required by Islanders, delivering a purpose-built medical facility for Health staff, and giving confidence in healthcare for future generations.
The Proposed Budget (Government Plan) 2025-2028, published on 2 August 2024, includes a summary of progress on the “New Healthcare Facilities”. It stated that the business case has been further developed for -
- An acute facility at Overdale.
- Meaningful progress on the Ambulatory facilities at Kensington Place and the Health Village.
- Some meanwhile use work on the Ambulatory facilities at Kensington Place and utilising some of the existing Jersey General Hospital site.
- The Enid Quenault Health and Wellbeing Centre at Les Quennevais, utilised on a longer-term basis.
- The delivery and continued use of the St Ewolds facility for rehabilitation services.
- Acquisition of further land and properties necessary to deliver the programme.
- Provision and use of decant facilities.
On costs the document states –
The total cost to deliver an acute facility at Overdale and make meaningful progress on development of the future phases covering an ambulatory facility and Health Village at no more than £710 million which is in line with the estimates shared in the previous Government Plan.
Estimated costs are £52m in 2024, £73m in 2025, £152m in 2026, £208m in 2027 and £225 million in 2028.
The financing strategy has been reconsidered given increased interest rates, significant construction cost inflation and the increased scale and ambition of the total NHF programme. The Budget proposes that a blended solution be used, with £523 million sourced through borrowing, use of the strategic reserve and possible receipts from the “Pillar Two” (the new tax arrangements for multinational companies)receipts.
