§ Lord Reaasked Her Majesty's Government:
What costs would fall on (a) Norwich Health Authority; and (b) the Department of Health if the private finance initiative scheme to build a new hospital at Colney were cancelled; and what proportion of these costs would be due to (a) damages for cancelling the contract; and (b) other net costs to be specified.
§ The Minister of State, Department of Health (Baroness Jay of Paddington)It is impossible to estimate what costs would be incurred by the Department of Health or the Norfolk and Norwich Healthcare NHS Trust (the NHS body that has signed this contract) if the contract were to be cancelled. Any estimate of costs would have to make a series of assumptions about what would have happened if the contract had gone ahead. However, costs would probably be substantial. Under the terms of the contract, the trust would be exposed to possible claims from the private sector project company. Such claims would be consistent with any other broken commercial contract in that the project company would be in a position to claim for costs and the loss of their profits over the entire period of the contract. In addition, the trust might well incur extra running costs in opting for a different solution, and the wasted time and expense incurred to date in developing this scheme would be considerable.
All these costs would be wasted money that would have done nothing to improve the delivery of healthcare to local people. Most importantly it would mean that local people would have lost the chance to have a new hospital.