Guy's pounds 115m over budget

A FLAGSHIP health service project to refurbish the world-famous Guy's Hospital was branded a "disgrace" by MPs today after it emerged that the costs had soared by pounds 115m.

The Commons Public Accounts Select Committee slated NHS managers and the last Conservative government for failing to keep the scheme on budget and on schedule.

Thomas Guy House was originally forecast to be built by 1995 at a cost of pounds 35m, but was completed three years late - at a final cost of pounds 150m.

Ministerial sources vowed last night to ensure that similar overspends were never repeated on NHS hospital projects and said tighter controls were being put in place.

The select committee attacked the project's management as "very poor" and "reckless " and found that it had cost taxpayers pounds 98m more than planned. The private sector had to pay an extra pounds 17m.

The MPs said the fiasco may have allowed the central London hospital to jump the queue for NHS resources, with a "considerable adverse impact" on the rest of the NHS.

The pounds 98m extra cost was equivalent to a levy of pounds 58,000 on every single NHS trust in the country - money which could have been used to replace essential medical equipment.

In 1986, the Government agreed to contribute pounds 19m towards a joint public- private sector plan to build state-of- the-art facilities for 40 clinical departments at Guy's.

"We are appalled that a project of this magnitude could have spiralled out of control without effective management for nine years," the report said.

"It is a disgrace that the original estimate was so inadequate, and was approved by both the Department of Health and the Treasury quickly, even though both had strong reservations about it."

The MPs said the failure to manage the project properly was still "indefensible".

The design for the project was only finalised five years after the initial estimate had been approved, resulting in "significant extra costs". The NHS Executive conceded it only experienced a "sense of realism" in controlling the costs of the development in 1994, when costs had risen to pounds 147m.

The Department of Health pointed out the committee's warm welcome of new, tighter restrictions on public-private projects in the NHS.