Hospitals inquiry: NHS Lothian 'kept in dark' over private finance

The latest stage of the inquiry explores the business case for the Royal Hospital for Children and Young People

NHS Lothian was kept in the dark about Scottish government plans to build Edinburgh's children's hospital with private finance, an inquiry is to hear.

Ministers did not give notice of changes to the project funding, leading to delays, a finance director said.

Senior NHS Lothian officials have given statements to be heard on Tuesday at the Scottish Hospitals Inquiry.

This phase of the inquiry explores the business case and governance of the Edinburgh children's hospital project.

It will hear how financing for the Royal Hospital for Children and Young People (RHCYP) switched to the Non-Profit Distributing (NPD) model of private finance.

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However, NHS Lothian said it had planned for a new hospital based on traditional funding.

Susan Goldsmith, NHS Lothian's director of finance, said the board was not given advance notice of the Scottish government's announcement.

She said in her statement: "If we were consulted, we would most likely have reiterated our concern about the additional complexities of delivering a revenue funded (NPD) project on a revenue funded (PFI) site."

She added: "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."

NHS Lothian said they had planned for the new hospital based on a traditional funding model

Iain Graham, director of capital planning and projects at NHS Lothian, said the board was left playing "piggy in the middle" trying to deal with two competing private finance models for two hospitals at the site.

Problems included having to build a new energy centre for the RHCYP rather than linking to the existing one at the Edinburgh Royal Infirmary (ERI), which was funded using PFI.

NHS Lothian was also prevented from knocking through a wall at the ERI to link to the new children's hospital.

Senior programme director Brian Currie, due to appear at the inquiry on Wednesday, said NHS Lothian was "well-advanced in our negotiations with the principal supply chain partner" when they were told the funding model had changed.

"We were just about to make a planning application to the council, so the design was well developed," he wrote in his submission.

Last minute inspections

The board was left to "salvage as much of the time, effort and cost that had already been incurred" by medics and clinicians, he added.

The public inquiry is examining safety and wellbeing issues at the Queen Elizabeth University Hospital (QEUH) in Glasgow, and the RHCYP and Department of Clinical Neurosciences in Edinburgh.

It is hearing from witnesses from the health boards responsible for the hospitals, having previously heard from families.

The RHCYP was due to open in Edinburgh in July 2019 but was delayed after last-minute inspections found safety concerns over its ventilation systems.

The Scottish government then stepped in to prevent the hospital from opening just one day before it was due to accept patients. It eventually opened in March 2021.

The inquiry in Edinburgh, chaired by Lord Brodie, continues.