Edinburgh' new Sick Kids hospital: Health bosses were not told of funding change

Health bosses in Lothian were given no warning of a change in the funding model for the new Sick Kids hospital which forced them to redo some of their planning and led to delays, an inquiry into the troubled project has heard.

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The Scottish Government announced in November 2010 the new hospital would be funded by a private finance model rather than directly by the government. But NHS Lothian finance director Susan Goldsmith told the Scottish Hospitals Inquiry they were given no advance notice of the public announcement.

She said: “We were all surprised. Given how far advanced we were, it was for all of us an intake of breath and ‘What next?’”

The Scottish Hospitals Inquiry, chaired by Lord Brodie, is looking into problems at both the new Sick Kids, next to the Royal Infirmary at Little France, and Glasgow’s Queen Elizabeth University Hospital.

Ms Goldsmith said when it made the funding change, the government also announced the new hospital would include the Department of Clinical Neuroscience, which Ms Goldsmith said was welcome news, but it meant the business case and the design had to be redone, which took a “considerable amount of time”.

She said the change in funding model created “many challenges”, not least the complexities of marrying the new hospital, funded through one new private finance model (NPD), and the Infirmary, which was operated under a different private finance model (PFI) through a consortium Consort.

She told the inquiry: “We were dealing with multiple stakeholders – for the Infirmary, 11 banks had lent money and there were two equity investors.”

The new Sick Kids Hospital finally opened fully in March 2021. Picture: Scott Louden.

And in her written evidence she said: “Consort would not accept the risk of the new RHSC (Royal Hospital for Sick Children) building being joined to the exterior wall of the Infirmary, particularly as this meant breaking through the wall of their hospital. The eventual solution was a mini extension built, known as the ‘nib’/docking station, from the Infirmary to which the new RHSC could be adjoined.”

On the funding announcement, she said: “It would have been helpful to have had some dialogue about the change of funding with Scottish Government before it was announced to discuss some of the potential challenges this might pose for the board. At the time I knew the project was going to be more difficult to deliver, but I had no idea just how difficult.

"I have been asked whether the switch to NPD resulted in delays to the Project. It is my conclusion that it did.”

The Evening News report of the funding change in 2010 noted the new hospital’s opening date had already been delayed from 2013 to summer 2014 and it would now be 2015 at the earliest before it was operational. Unions warned the new funding model could harm the hospital long-term and privately, health chiefs were said to be livid that ministers had opted for funding from the “controversial and as yet untested Scottish Futures Trust”.

How the Evening News reported the change in funding model in November 2010.

Services finally switched fully from the old Sick Kids hospital at Sciennes to the new hospital in March 2021, 20 months after its official opening was cancelled at the last minute in July 2019 because ventilation in the critical care unit did not meet the required standards.