A state-of-the-art cock-up

Even for those familiar with the world of public sector procurement, the case of the Paddington health campus is an increasingly unusual one. Delay, obfuscation and last-minute changes are all part of public bodies’ modus operandi, but this project takes them to a level that verges on the surreal, and threatens to expose the whole process of public procurement to ridicule. Let me explain.

In the beginning, shortly after Labour’s 1997 election victory, two hospital trusts and a university decided to execute the plan that they had long been contemplating: to combine their facilities, which were scattered across London, into one super state-of-the-art “health campus” in Paddington, west London. And so it came to pass that St Mary’s, the Royal Brompton & Harefield and Imperial College were given government backing.

In the next seven years, no real progress was made, and although the development budget doubled, the size of the scheme swelled so alarmingly that Westminster council considered that it could not be accommodated on a tight city-centre site – and the estimated cost went from £360m to £827m.

When large-scale public schemes start to go awry on this epic scale, the obvious response is to order a review. And so a review was ordered. Officials from the Department of Health, the Treasury and the National Audit Office descended on the scene at the start of this year. It was hoped that these wise men would offer a reality check for everyone concerned, and a few lessons for future public sector procurement. We waited expectantly for the review’s publication in the early summer … and waited … and as I write, we are still waiting.

I gave up predicting when the review would come out in June – although Murphy’s Law dictates that it will be published on 9 September. At first the report, which insiders have described as “hard-hitting”, was due in late May. Health minister John Hutton predicted late that month that it would be out “in a fortnight”. It wasn’t. I have seen minutes of an NHS trust meeting in which Nigel Hodson, the project director for the campus, says that the review will be out “within the next few days”. That was in late June.

So why the hold-up? And does it really matter, or is it just something for people like me to occupy themselves with over the quiet summer months?

The answer to the first question is that nobody really knows. The word is that it has proved difficult to get the three authors to agree a final draft, especially given its political sensitivity and the conflicting interests of the Treasury and the Department of Health. I understand that the report still has draft status. However, I also understand that the NAO has regarded it as complete for at least a month.

The answer to the second question is a definite yes – it does matter. For the good of public procurement we need to know why this went so badly wrong. If, in the process, it bruises the egos of some of those involved, so be it.

The non-publication is especially galling when two of the bodies involved in the campus – the North West London Strategic Health Authority and the health campus project team – trumpeted its findings on 12 July. Both issued press releases stating that the project had received government backing – a piece of media manipulation that would have prompted Alastair Campbell to offer a stumbling apology. “Green light for Paddington Health Campus”, announced the strategic health authority, when the truth was that the health campus team had been ordered to come up with a new outline business case – four years after it submitted its first one. To add to the confusion, the NAO also released a statement that week saying that the report hadn’t been completed.

'Green light for Paddington Health Campus', announced the strategic health authority, when the truth was that the health campus team had been ordered to come up with a new outline business case - four years after the first one

No wonder that the NAO is reported to be losing patience with the whole thing.

Of course, all this distracts us from the real issue at stake, which is the future of the scheme itself. Can the project team really come up with a new case for the campus by October? Is a land swap deal with Chelsfield – a key part of the new case for the project – really feasible?

Those NHS minutes I mentioned earlier also included an assertion by Hodson that a masterplanner was needed to look at “the potential reconfiguration of the whole Paddington Basin site”, the site on which the team hopes the campus will now be centred.

Has one been appointed in the past two months? If so, is it possible for them to reshape a major piece of land in the centre of London by next month?

Unusual though it is, the Paddington problem is not a complete one-off among big PFI jobs. Design concerns have emerged over another megahospital in London, the merging of St Bartholomew’s and the Royal London Hospital in Whitechapel. And in Manchester, contractor Bovis Lend Lease has taken what feels like an age to close its deal to build the Central Manchester Hospital.

John Spanswick, Bovis’ chief executive, said last month public bodies needed to do more to make their schemes affordable. I’m not sure it’s as simple that. These examples of large-scale public procurement gone wrong – among which, Paddington is the pièce de résistance – indicate the near impossibility of getting big city-centre hospital schemes off the ground, especially when they involve a multi-headed client. Some of those embroiled in these schemes might feel it’s now too late in the day, but surely it’s time to rethink the strategy. And I don’t need to have read the review to state that.

Phil Clark is deputy editor of Building