Hospital criticised over disastrous building project

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the redevelopment of Guy's Hospital in London overran its budget by more than 80 per cent and was completed more than three years late in one of the worst cases of overspending in recent NHS history, the National Audit Office has found.

The hospital planned to spend pounds 83.1m on building an eight-storey block, now known as Thomas Guy House, for completion at the end of 1992. After a series of accidents, including the removal of more than a mile of copper piping which was attacked by bacteria, the project was completed in April 1997 at a cost of pounds 151.8m, pounds 68.7 million over budget.

Guy's and St Thomas' NHS Trust is currently suing the developers over the project, one of whom - P&O Developments - is countersuing. A spokesman for the trust said the question of responsibility for the cost increase and delay was a matter for the courts. "We have entered litigation. It is for the courts to decide," he said.

The trust managed to find part of the extra money - the Treasury was forced to increase its contribution from pounds 19.5m to pounds 92.6m - but is still pounds 26.8m short. This is being financed by temporary borrowing within the NHS.

The disaster is the second to befall a major hospital building project in the last decade. The 660-bed Chelsea and Westminster hospital, completed at a cost of pounds 202m in 1992, also overran its budget and was criticised by the National Audit Office.

Sir John Bourn, the auditor general, says in the report that the reasons for the cost increase at Guy's included changes to the design after construction had begun, delays to the building works, a large number of disputes with the contractors and the bankruptcy of one of them.

The NHS executive has now revised its guidance on the construction of major building the light of experience at Chelsea and Westminster and Guy's. Sir John said the new advice, which highlights the importance of strong project leadership, "should help improve the planning and delivery of NHS construction projects".

Tim Matthews, chief executive of the trust, said: "The new trust inherited a troubled building project. It acted swiftly to establish control ... The NAO identify many important lessons for NHS building projects."