£1bn price tag for west Herts hospitals scheme

The new-look Watford Hospital could cost £940m.

The new-look Watford Hospital could cost £940m. - Credit: Danny Loo

The final tally for the redevelopment of west Herts hospital services could hit an eye-watering one billion pounds.

The plans call for Watford General to be rebuilt on the existing Vicarage Road site – with clinical services concentrated in three tower blocks.

Meanwhile, St Albans City Hospital would be upgraded as a centre for diagnostics and planned surgery – offering a broader range and greater complexity of surgery.

And Hemel Hempstead Hospital would also be upgraded as a multi-speciality site, including new and upgraded diagnostic services, urgent care and routine appointments, a focus on older people’s care and some maternity services.

If the plans are formally approved by the board, the West Herts Hospitals Trust hope to submit their ‘outline business case’ to the NHS’s New Hospitals Programme and the Treasury later this year.

And for the first time this week trust deputy chief executive Helen Brown revealed the escalating costs of the plans.

Speaking at a meeting of the Stakeholder Reference Group on Thursday, Ms Brown reported that the cost of the work to the Watford General site alone was now estimated to be £940m.

Most Read

And the cost of upgrading St Albans and Hemel Hempstead Hospitals is estimated to be £140m.

But by the time construction work would be expected to start –  in 2024 – it’s estimated that inflation will have pushed those estimates to £1.1billion and £160m respectively.

Recognising the scale of the sums involved, Ms Brown told the virtual meeting: “They are big numbers.

“And nobody underestimates the fact that this is a very significant investment that we are asking the government to make in improving our facilities.”

Ms Brown said they believed the plan – involving the replacement of the Princess Michael of Kent block – was “very clearly the best solution”.

And she said the trust would be making the case ‘as strongly as we can’ that the investment is needed.

The sum is significantly more than the £400m figure that was floated following a visit of Prime Minister Boris Johnson in 2019.

But Ms Brown told the meeting that that would never have offered a full solution or delivered all the benefits that the trust wanted for its patients.

More recently, in 2020, she says the trust had been given permission to include options that would replace the main Princess Michael of Kent building, with an overall figure of £590m suggested.

But since then, said Ms Brown, a review of current and future demand has led to an increase in the size of the planned hospital and facilities – with more single rooms and wider corridors.

And there is also investment planned in digital technology and in ensuring the development is as net-zero carbon as possible.

As a result, the estimated costs are now in excess of £1bn – with inflation set to push up estimates by around £50m a year should construction be delayed.

Ms Brown acknowledged that there was no guarantee that this level of funding would be granted.

And she said that if it was not they would have to sit down with the regulators, the Department for Health and the Treasury to look at ‘the spectrum of options’.

That would have to include, she said, considerations of the implications of NOT moving forward with the preferred option.

And she stressed that the preferred option was the option that made economic sense in the longer term.

“There is no guarantee,” she said.

“There absolutely is no guarantee that we will get this level of funding.

“But we felt that it was incumbent on us to set out what we think we really need and what will get the best solution, and make that really clear and to really make the case as strongly as we can.

“And again I’m aware that other hospitals in the programme are doing similar.

“Clearly the government has some really difficult financial challenges that it is facing on the back of the last few years; the covid pandemic, current issues in Ukraine, the squeeze on cost of living. It is a really tricky financial context that we are operating in.

“So I can’t hand on heart tell you that I think we definitely will get the money that we are asking for – but I can tell you that this would give us the best solution longer term that the economic evaluation does demonstrate that it makes more sense.”

Ms Brown was asked about the relative cost of providing a new hospital on a new site, which campaigners have made repeated calls for.

But she said that there was no evidence that a new hospital on a new site would be cheaper.

She said they were not in a position to do a detailed cost comparison because they don’t have a specific site to consider.

She did accept that there were some additional costs related to tall buildings, in a nod to the towers planned for the Watford General site.

But she said that a new site would bring with it additional costs such as the provision of utilities, such as gas, electricity and oxygen, and road infrastructure.

And she said that ultimately a new site option had not been included in the Trust’s proposals, not because of cost, but because of ‘deliverability’.