Repayments for delayed Edinburgh children's hospital to increase

Work to bring Edinburgh's delayed children's hospital up to standard will result in increased repayments to the private consortium behind the project.

The opening of the new hospital was halted in July 2019 amid safety concerns over its ventilation.

Upgrades made to allow the facility to fully open have now triggered a jump in the annual fees paid to private consortium IHSL.

IHSL and NHS Lothian said the increase reflected the extra upkeep required.

The size of the repayment increase has still to be disclosed.

• Millions paid out for unused Sick Children's Hospital

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• Hospitals public inquiry gets under way

Health Secretary Jeane Freeman has previously said the cost to the taxpayer of fixing the ventilation system and delays in opening the hospital campus was estimated to be £28m.

But the latest NHS Lothian board papers show there has been "significant movement between estimated and actual costs" of the ventilation repairs, which alone were estimated at £16m in 2019.

Annual payout

The new hospital campus has been in partial use since July last year when the Department of Clinical Neurosciences moved in and then later children's outpatients appointments started there.

The remedial work was officially due to finish on Monday with its full opening, and the closure of the existing Sick Kids site, now expected to take place in the spring.

The new Royal Hospital for Children and Young People originally cost about £150m to build but its full price tag over the next 25 years, including maintenance and facilities management fees, will be £432m.

The issues surrounding the opening of the new Royal Hospital for Children and Young People in Edinburgh will be examined by a public inquiry

The deal with IHSL to design, build, finance and maintain the new hospital was under the Non-Profit Distributing (NPD) system, the Scottish government's version of controversial private financing models such as PFI.

Under the terms of the original contract, repayments - which would average about £1.4m a month - are made in the form of an annual payout known as a unitary charge.

These payments started in February 2019 when NHS Lothian took possession of the site from IHSL after it was signed off as complete by an independent certifier.

It was only days before the hospital was due to open in July 2019 when further building checks identified the ventilation issues.

Upgraded ventilation systems

Meanwhile, figures released to BBC Scotland under FOI laws show that the Sick Kids saga cost the taxpayer at least £23m while the new hospital was not in use.

A total of £21m in repayments, remedial work and legal fees was spent on the facility between July 2019 - when it was meant to open - and July last year, when it partially opened.

A further £2.06m was spent keeping the current Sick Kids hospital open between July 2019 and September last year.

The new hospital will provide care for children and young people

Susan Goldsmith, director of finance at NHS Lothian, said that under the NPD funding model the new ventilation setup is maintained by IHSL's facilities management contractor.

She added: "Therefore, allowances for maintenance and life cycle replacement are costed as annual amounts and are incorporated into the unitary charge.

"This is not unique to this project but is standard to all Public Private Partnership projects where changes are instructed to reflect, for example, new healthcare standards or clinical service changes.

"Such costs are obviously offset by any maintenance or lifecycle on equipment."

An IHSL spokesman said: "There will be an increase in the maintenance costs which will be reflected in the unitary payment."