Axed PFI hospital design cost Balfour Beatty £2m

Contractor Balfour Beatty spent £2m on a new-build design for a hospital that will never be used, Building has learned this week.

Architect BDP was given the money by Consort Healthcare, a joint venture between Balfour Beatty and the Royal Bank of Scotland, as part of a £280m deal for two hospitals in which the client was Mid Yorkshire Hospitals Trust.

But after the consortium won preferred bidder status in November 2004, the trust radically changed the designs of the Pinderfields hospital because it could not afford the original scheme. The original BDP design has now been scrapped and a revised one put in place.

David Revell, project director for the trust, said: “The development work has been revised since we selected the preferred consortium last November. We needed a more affordable design to make it workable.”

Ian Rylatt, managing director of Balfour Beatty capital projects, denied that the money spent on the design had been wasted.

He said: “There are design changes all the way through the process but obviously some are more dramatic than others. In the case of Pinderfields the trust had its own financial restraints so it had to keep costs down. It would be great if there were a crystal ball and we could predict how much the design would change from the one accepted with the bid, but we cannot.”

The new-build element at Pinderfields has been revamped to combine separate ward blocks into a single building. The overall size of the building has also been reduced, as well as being turned around from facing south to facing east.

The news comes as the industry has stepped up its efforts to lobby the government to make the PFI process more efficient.

We need a more affordable design to make the hospital scheme workable

David Revell, Trust project director

Stephen Ratcliffe, director of the Major Contractors Group, said the problem of radical design changes was not unusual.

He said: “Unfortunately we get a local trust that is not used to dealing with a project on this scale. It is using a set of outputs and specifications it is not familiar with and it is too complicated for it. It is often a tortuous process to make the scheme affordable because the NHS realises it needs to keep costs down.”

The current PFI survey by the Major Contractors Group has found that average bid costs on hospital projects have risen from £7.7m in 2003 to £11.5m this year.

The hospital scheme is going ahead after ministers agreed to write off historic debts of the Mid Yorkshire Hospitals NHS Trust, thought to be as much as £35m. The write-off – following pressure from political heavyweights in the area – has been agreed on the basis of “exceptional circumstances" at the trust.

Consort Healthcare beat off a challenge from the Taylor Woodrow–Innisfree consortium to win the 35-year concession, which covers the design, build and maintenance of the two hospitals. Balfour Beatty will invest £15m of equity in the project and the RBS will provide a further £10m.

Preliminary work is expected to start next year, with the first hospital at Pontefract due to open by 2009 and the Pinderfields hospital expected to open by 2010.

Plan B: The revised, and cheaper, design for the Pinderfields hospital