The Future Hospital Review Panel has undertaken a review of the Our Hospital Outline Business Case (OBC) and the accompanying proposition to fund the £804 million project.
The review was part of the Panel’s ongoing scrutiny of the Our Hospital Project which, later in 2021, may include a review of the planning application associated with the site.
In November 2020, Overdale was approved by the States Assembly as the preferred site for the new hospital (P.123/2020). Since that date the Council of Ministers brought forward P.167/2020 Our Hospital, Preferred Access Route, which was approved by the States Assembly in early February 2021. The site was approved with a budget envelope of £804 million. It is anticipated planning for the site and the access route will be submitted in November 2021 with approval expected within six months from submission.
The Panel therefore has undertaken an in-depth two-phase review of, firstly, the OBC for the Our Hospital Project and, secondly, the associated funding proposition P.80/2021 lodged with the States Assembly. During its review the Panel has:
- Taken evidence from members of the public and key stakeholders on the conclusions of OBC.
- Considered the impact of the funding proposals on public finances.
- Identifed whether the conclusions of the OBC are appropriate for this project.
- Considered whether sufficient evidence is provided that the budget is appropriate for the scale of build proposed.
- Received and analysed necessary advice and guidance from expert advisers engaged for this review to ensure that the OBC adheres to best practice and contains the detail relevant and sufficient for this stage of the Our Hospital Project.
- Received and analysed advice from expert advisors about whether the funding solution lodged with the States adheres to best practice for public sector borrowing.
- Identifed key issues for States Members to consider during the debate on the funding proposition.
- Increased information available to the public and media on a topic of significant public interest.
- Provided constructive feedback and recommendations for the Council of Ministers.
- Presented a report highlighting findings and recommendations to the States Assembly.
To undertake an in-depth appraisal of the Outline Business Case (OBC) and the accompanying proposition for funding the Our Hospital Project in a two-phased approach
1. To review the Outline Business Case and determine whether it meets best practice with particular regard to the following:
a. Examination of the structure and ensure this is within the expectations of the five-case model and follows the HM Treasury Green Book Standard.
b. Analyse each of the five cases and provide detail on the robustness of each to meet the overall objectives of the OH Project.
c. Compare each of the five cases within the OBC to the documents issued previously and make comparisons to show any major changes highlighting risks and/or benefits.
2. To provide detailed analysis on the funding and budget with particular attention to the following:
a. Review the overall costs and budget and measure against the budget proposal of £804 million to ensure it is sufficient to meet all aspects of the Our Hospital Project.
b. Analyse any amendments to the budget since the proposal of £804 million in P.123/2020 and highlight any differences in costs.
3. Review and analyse the proposed use of a bond and if this is the best value for money for the OH Project and ensure this funding solution is appropriate and proportionate for the project:
a. To list any other funding options, as appropriate
b. To review the budget increases and interim funding solution used throughout the project and measure these against best practice
c. To review the proposed repayment, in particular to analyse if the returns on the Strategic Reserve over the full life of the bonds will be sufficient to meet both the annual financing costs and grow the value of the investments to a sufficient level to meet investor capital repayments, as proposed
d. To analyse the financial impact on the Island's economy
e. To analyse the impact that repayments of borrowing of this scale will have on general revenue expenditure, particularly meeting the costs of running a health service, such as maintenance, staff facilities and pay increases.