Inflation drives up Laing hospital by £60m

Laing O’Rourke’s Royal Sussex County Hospital project in Brighton has been given an extra £60m by the Department of Health (DoH) due to inflationary pressures.

The scheme, which involves specialist tertiary, trauma and teaching facilities, was budgeted at £420m in the outline business case in 2009.

However, inflation has increased the project’s price tag to £480m, which the government has agreed to meet.

Health secretary Jeremy Hunt said: “I can today reiterate the government’s commitment to this scheme and say that my department has earmarked the funding for the inflationary impact on the scheme, meaning around £480m is now set aside for this project.”

A spokesman for Brighton and Sussex University Hospitals NHS Trust said: “The figure of £420m, set in 2009, went into the outline business case that was approved in May 2014.

“The change in the figure reflects the upturn in the economy, changes in construction costs, VAT, equipping costs, historical inflation since the original budget was set and predicted inflation till programme end in 2023.”

A spokeswoman for the DoH said: “Since May 2014, the trust has been working to develop the proposal and costings with the lead contractor. This has shown an increase in the costs of the scheme.

“The trust will now be able to conclude design work and finalise the costs safe in the knowledge that the funding is secure.”

The final business case, which prices the scheme at £480m, still has to be approved by the treasury, the trust spokesman added.

Laing O’Rourke began work on the 3Ts Redevelopment, as the scheme is known, last September.

The preparatory phase, due to complete in autumn 2015, involves construction of two temporary buildings to house clinical services and three wards during the redevelopment.

Work on the main hospital building is expected to start in early 2016.