Cost fears mount for new Sick Kids

Published on Tuesday 21 December 2010 11:40

THE new Sick Kids hospital could leave a disastrous funding legacy similar to that of the city's Royal Infirmary, it has been warned.

Since a Scottish Government U-turn on how the 250 million hospital will be paid for, fears have emerged that NHS Lothian could end up paying monthly "rent" that would far outweigh the value of the property.

Health chiefs had hoped the world-class facility at Little France would be funded up front and straight from the public purse, similar to the recently rubber-stamped 800m "super hospital" in Glasgow.

But after ministers decided to use the Scottish Futures Trust, which has been described as an alternative version of the private finance initiative (PFI) scheme, exactly how much will be paid out now is unclear.

Now former health secretary and city MSP Malcolm Chisholm has expressed concerns about NHS Lothian being left to pay the monthly fees.

That would replicate the deal which sees health chiefs pay Consort, which built the ERI, tens of millions of pounds every month, despite it being worth 170m.

By the end of that agreement, Consort will have received 1.26 billion and still own the hospital and the land it is on.

Mr Chisholm asked Health Secretary Nicola Sturgeon for reassurances the Scottish Government would meet the monthly repayments in full, but she stopped short of saying that would be the case, adding they would only be given assistance.

He said: "The government is not giving the health board the capital it would normally give them to build the hospital, so it needs to cover the full cost of the annual payments which the health board will have to make.

"Ten years ago, because we (Labour] didn't have enough up-front capital, we had to take a mortgage out to pay for them. They are doing the same.

"There is a real risk of extensive delays and that has to be avoided at all costs. There will also be annual charges as under PFI and it is essential that Lothian receives revenue support for such charges."

The hospital, originally due to open at the beginning of 2013, will not be operational until at least the summer of 2015.

Health chiefs are known to be furious at the Holyrood change of heart on funding, especially in light of Glasgow's recent developments.

Jackie Sansbury, the health board's chief operating officer for acute services, said: "NHS Lothian remains fully committed to building a new world-class hospital at Little France.

"We have met twice with the Scottish Futures Trust and representatives from the Scottish Government Health Department since the announcement was made about the funding route for the new hospital and we are continuing to work with them to identify the most appropriate procurement route."

Ms Sturgeon said: "The decision to move to revenue finance was taken in the context of a 36.5 per cent real-terms cut in capital funding throughout the Scottish Government.

"The decision that we have taken will give certainty over the delivery of the project."