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NHS ‘paid out extra £11m to fix children’s hospital drainage’

The Royal Hospital for Children and Young People in Edinburgh was due to open last month.

Children's hospital: NHS Lothian is paying £1.4m a month for the empty building. <strong>STV News</strong>
Children's hospital: NHS Lothian is paying £1.4m a month for the empty building. STV News

More than £11m was paid out by a health board to fix drainage at a delayed children’s hospital, a report has said.

The Royal Hospital for Children and Young People in Edinburgh was due to open last month but was halted after final checks revealed the critical care unit’s ventilation system did not meet the necessary standards.

On July 18, health secretary Jeane Freeman said water and drainage systems at the site would also be assessed before a timeframe for the transfer of patients could be established.

An Audit Scotland report into NHS Lothian from June this year said the hospital was still scheduled to be fully operational by July 15.

The 2018-19 annual audit report also stated a payment was agreed in February with contractor Integrated Health Solutions Lothian (IHSL) Ltd in relation to the drainage, among other issues.

It said: “The project has faced a number of challenges and delays, with construction issues impairing the original project plan and timetable.

“These have since been resolved and the facility was handed over to NHS Lothian in February 2019.

“Towards the end of the build stage, a £11.6m payment was agreed from NHS Lothian to IHSL to facilitate resolution of a number of issues but primarily the three key outstanding technical matters.

“Broadly, these three matters relate to a drainage solution, heater batteries, and void fire detectors.

“This payment is in addition to the £150m construction cost as at financial close and £80m of enabling and equipment works outwith the agreement with IHSL.”

It has also emerged NHS Lothian is handing over around £1.4m a month to IHSL despite the delayed opening.

KPMG is carrying out an investigation into the delays, while Scottish Labour has called for a public inquiry into the matter.

Caroline Gardner, auditor general for Scotland, said: “We have continued to monitor events since the annual audit report was issued and will be taking a close interest in the NHS safety review’s findings and KPMG’s report on the governance of the project.”

The report also said other problems had been identified and formal assurances sought over “key issues”, adding: “For example, given recent issues experienced at Queen Elizabeth University Hospital in Glasgow, NHS Lothian requested assurances regarding the cladding on the new hospital.”

Scottish Labour health spokeswoman Monica Lennon, who has previously called for a public inquiry into the scandal, said the report raises more questions than answers.

“The Government has clearly known for some time about the serious issues around governance and problems with the progress of the contract for the new Sick Kids hospital Edinburgh,” she said.

“With the publication of today’s report, it begs the questions of why the health secretary hasn’t previously mentioned it and how the situation has been allowed to progress to this stage.

“We are learning more about this scandal by the day and events have now moved on even from when this audit report was signed off earlier in the summer.

“More questions than answers remain and ultimately the buck stops with Jeane Freeman.

“Concerns raised by trade union officials that the new Edinburgh Sick Kids could be ripped down before it even opens are unthinkable, and a public inquiry must get under way.”

A Scottish Government spokeswoman said: “As part of this year’s audit, Audit Scotland commissioned Scott-Moncrieff to carry out a high-level review looking specifically at arrangements around the settlement agreement between NHS Lothian and the contractor.

“The report notes that NHS Lothian sought professional advice and provided evidence of detailed evaluation of the available options before proceeding with the settlement agreement and that provision of a safe facility remained the board’s priority at all times.

“The results of this review will be considered as part of the independent audit of the overall governance arrangements for the new hospital that KPMG are conducting, at the cabinet secretary’s request, to provide an external and impartial assessment of the factors leading to the delay.”

Susan Goldsmith, NHS Lothian finance director, welcomed the report, adding: “It reviewed the settlement agreement between NHSL and IHSL and considered the project governance and value for money. 

“The report highlights that NHS Lothian provided evidence of detailed evaluation of the qualitative and quantitative options available to it before proceeding with the settlement. 

“It also shows that the board sought technical advice and expertise throughout the project to ensure the safety of patients, staff and visitors remained the priority throughout.”


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