Edinburgh's new Sick Kids hospital: '‘Private finance move added to costs and delays'

Edinburgh's new Sick Kids hospital took longer and incurred additional costs because of the move to a private finance model, the chief executive of oversight body Scottish Futures Trust has acknowledged.

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In his written evidence to the Scottish Hospitals Inquiry, Peter Reekie said the switch to the Non Profit Distributing (NDP) model offered a way for the project to proceed at a time when there was not enough capital funding available and he could not speculate when or if capital funding would ever have become available.

But he said the decision to include the Department of Clinical Neuroscience (DCN), transferred from the Western General Hospital, as part of the same project and the change in procurement route, which included preparation of a reference design, took time. "The switch to NPD, therefore, led to a later completion date than that which was programmed for the [Sick Kids] project as a capital project at the time of the switch."

He said the inclusion of DCN meant an increased cost. "In addition, there were advisory costs associated with NPD procurement which in my experience are generally higher than advisory costs under capital procurement. There was an additional cost of financing the project as a result of the NPD funding route and NPD includes costs for the whole lifecycle of the building including facilities management service."

But he said it was not possible to say whether there was any increase in the construction cost given the scope of the project had changed.

The inquiry, chaired by Lord Brodie, is examining problems at both the new Sick Kids hospital at Little France and Glasgow's Queen Elizabeth University Hospital.

The Sick Kids fully opened in March 2021, 20 months after the last-minute cancellation of its scheduled opening in July 2019 because the ventilation in critical care did not meet the required standard.

The opening of the new Sick Kids Hospital in July 2019 was cancelled at the last minute because the ventilation in critical care did not meet requirements. Picture: Scott Louden.

Appearing at the inquiry, Mr Reekie was asked about a “needs not wants” review of the design brief carried out for SFT in 2011 by independent consultants Atkins and whether it would include matters such as ventilation. “It wouldn’t,” he said. The review was about spatial design and costing, not the detail of any structural, mechanical or electrical design elements. Its concern was “whether the size of the buildings was about right to deliver the clinical services – the specialities involved, the throughput of patients, the amount of treatment and all the ancillary services” and it looked at the cost-per-metre for the building compared with other hospitals.

The inquiry was shown an email from David Stillie of engineering company Mott MacDonald in which he reported a comment by Peter Henderson of Health Facilities Scotland about a meeting in January 2012 that “everyone present appreciated that the project had been reviewed ‘to death’”.

Mr Reekie said: “I could understand why the project team might feel they had been subject to a number of reviews, but all of the reviews had particular purposes that were designed in the end to help meet the requirements of the project and deliver value for money and a workable project.”