Hospital upgrade £60m over budget
AHEALTH board has been rapped by auditors for “deficiencies in governance and management” that led to a project soaring £60m over budget and arrests being made.
The final bill for removing asbestos and revamping Ysbyty Glan Clwyd, Bodelwyddan, went almost 55% over its original budget to £171m.
The Wales Audit Office (WAO) report sets out how “weaknesses in the business cases” for the works were not addressed by Betsi Cadwaladr University Health Board or Welsh Government prior to being signed off.
In January 2014 more money would be needed for the £110.4m project, after the health board discovered invoices totalling £5m had not been paid.
NHS Wales auditors were called in and found “two different versions of the regular reports about the project’s financial performance”.
They also discovered “instances of progress reports being amended to misrepresent the project’s position to the project board”.
The report said: “The information presented at commercial meetings between the supply chain partner, the external advisors and the health board showed correctly anticipated spending was likely to exceed the approved project budget.
“However, these meetings operated outside the project’s governance structure, with no defined reporting line internally to the project board.”
North Wales Police arrested a number of health board staff and external partners after Betsi referred the dual reporting of figures to NHS Counter Fraud Service Wales in May 2014.
A second NHS audit in September 2014 found the outline and full business cases for the scheme were “insufficiently prepared” with no evidence of “effective internal review and scrutiny”.
Betsi failed to tell the contractor its maximum costs were £89.9m, “substantially lower than the supply chain partner’s own expectations”.
It then emerged only one contract was signed – for £42.6m.
However, unknown to Welsh Government or Betsi, a member of staff “subsequently amended the strategy to a two-contract strategy”.
In January 2010 a leak above two wards showed a risk of asbestos falling on to the floor below – and in November the board learned the ceiling void above main theatres was contaminated.
The HSE asked for a plan detailing how it was going to remove the fireretardant material from its premises by 2011.
In 2012 Welsh Government agreed funding of £110.4m to strip out 300,000 tonnes of waste from the hospital.
Although the project was “largely completed on time” according to the WAO, it cost Welsh Government an additional £53.2m.
Betsi Cadwaladr UHB also had to find a further £7.2m from its own funds..
Mark Wilkinson, executive director of planning and performance, accepted the board had been “overly optimistic” about costing the “ambitious and complex” project.
He added: “As acknowledged in the report, the health board has learned lessons from this project, including strengthening governance arrangements both on this and all other capital projects in north Wales.”
A Welsh Government spokeswoman said the work had “significantly enhanced the facilities for patients and staff” at the hospital.
She added: “The report recognises the programme was complex due to the hospital continuing to operate whilst the work was undertaken. It also notes improvements made by the health board and ourselves around the management of capital
schemes.”