£250M SUPERHOSPITAL

Discussions about the possibility of having just one hospital in Derby began in 1995. Since then, there has been much speculation about where, when and how much such a venture would cost. In 1997, the possibility of moving all acute services to the City General and making the DRI a community hospital was first mooted. Since then, despite the formation of action groups against the plan and countless petitions opposing the idea, plans for a single hospital have rolled on, although, after public consultation, it was agreed that some acute services would remain at the DRI.

In July, 1999, the new hospital was given the go-ahead when the Government backed the plan up to the cost of £177m under a Private Finance Initiative. At that point, the proposed cost was £123m. In July, 2000, more detailed plans for the hospital were approved and the estimated cost rose to £149.2m. Later, it emerged that a third of the 12-acre DRI site would probably be sold and, in November last year, it was revealed that the new hospital would have 1,190 beds. In December, 2000, a shortlist of the companies bidding to build the hospital was drawn up. And between February and November, 2001, the proposed cost of the hospital increased again from £154.9m to £200m. In March, 2002, plans for a £10m medical school at the City General site were revealed and, by June, work began on a £2m car park opposite Uttoxeter Road.

At about this time it was announced that the proposed costs of building the hospital had risen to £250m. In August, Skanska Innisfree was chosen as the preferred bidder to build the hospital and, from that point, the company began to prepare detailed plans. Derby City Council approved the plans in December, with the finalising of the full business case set for the spring. The car park was finished in late 2002 and the majority of day staff at the City General are now using it. The contract between Skanska and Southern Derbyshire Acute Hospitals NHS Trust was signed at the end of March and the main construction work started soon after.

Until now, Southern Derbyshire Acute Hospitals NHS Trust has never specified the entire cost of the scheme, which is being financed through a Private Finance Initiative (PFI). However, it has now been confirmed that the actual price will be more than four times the £260m figure, as it now includes the cost of maintenance, utilities and services such as portering, catering and cleaning. Under a PFI agreement, a private consortium designs, builds, finances and operates a hospital. Then the NHS repays the cash over a set period of time, in this case 35 years.

The trust will use its funds, which come from the taxpayer, to pay an annual fee to the consortium as soon as the project is up and running on the Derby City General Hospital site in 2008. According to a PFI expert at the Department of Health, this figure is expected to be just under £35m a year over 35 years, based on other similar hospital projects across the country, putting the total cost of the scheme in the region of £1.2bn. The actual annual fee will be announced when contracts to build the hospital are signed by the trust and the firm behind the development, Skanska Innisfree, next month.

Trust spokeswoman Jo Yeaman said, "In January, 2002, we estimated that the cost of building the superhospital would be upwards of £260m, although this was still subject to inflationary building costs, and incorporation of resources to support a new medical school as well as any new governmental initiatives or standards introduced prior to finalising contracts. If you add together the yearly costs for the 35-year period, they will undoubtedly amount to more than £1bn. However, it should be noted we already pay for facilities services and maintenance now, so the only additional cost is the cost of building the new hospital which will, of course, not be anywhere near £1bn."

There is evidence that other trusts are paying huge amounts for their PFI-built hospitals. The Coventry New Hospitals Project, which is six months ahead of Derby's "superhospital", has been called a £343m capital project. Annual payments by University Hospitals Coventry and Warwickshire NHS Trust and Coventry Primary Care Trust will be £51.075m for 35 years when the hospital is completed, bringing the total cost of the project to £1.785bn. This is five times the amount quoted by the trust prior to contracts being signed in December 2002.

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