"HEY BIG OVERSPENDER" CLAIMS REJECTED BY HOSPITAL

14-07-2007

Health bosses have rejected claims that Birmingham's new £545 million QE superhospital is the most overspent scheme in the West Midlands. They reckon the Taxpayers Alliance, who are making the allegations have got their sums wrong.

The Alliance published details yesterday of every major public project completed or active since 2005. They calculate that a whopping £23 billion has been added on compared to the original estimates (see their report here)

Our region is rated the second most wasteful, with health hogging the headlines.

The University Hospital Trust (which runs the QE), the Royal Wolverhampton Trust and Walsall Hospital Trust occupy the top three in this league of shame (to see the full table click here) - pdf file

Except that, at least in the QE’s case, it’s not as simple as that. The original estimate of £291 million is accurate, but the Taxpayers Alliance’s claim that the new superhospital will cost £627 million isn’t correct.

The Trust says that figure, includes a new psychiatric hospital that wasn’t included when the costs were first drawn up.

A spokeswoman explained: “The original figure of £291million was the estimated cost when the Strategic Outline Business case was submitted in 2001.

“Since then the construction of a new mental health hospital has been added to the project at a cost of nearly £70million, capital charges have increased and inflation has risen. This project is affordable and demonstrates good value for money. This is not a cost overrun.”

For all that, The Alliance is doing a valuable job highlighting the extent to which projects fall victim to hyperinflation after they’ve been approved.

In the West Midlands, 21 projects including The Public in West Bromwich and the Northfield Relief Road have generated spending of £707 million above initial estimates - an average of 44%.

“We’re aiming to highlight how many projects go over the top” said Alliance spokesman Corin Taylor.

“These details are often buried in individual reports so we’ve tried to bring them together.

“Too often people are told they are going to have a new hospital or road at a certain cost, and they agree to it, but then the price doubles and by then they have no say.”