News / Biggest Scots hospital gets public funding

The Scottish government has backed plans to build the country’s largest ever hospital using public funds, saying it was cheaper than a privately-funded model.

The bulk of the £842m for the New Southern Hospital in Glasgow, which will include an integrated childrens and adult hospital on the site of the current Southern General Hospital, will come from the Scottish government. It will provide £552m, with the remaining £290m coming from NHS Greater Glasgow and Clyde, including £20m from locally-held endowments.

The publicly-funded option was not compared with a private finance initiative (PFI) deal but the non profit distribution model (NPD). The Glasgow NHS board had previously looked into a more conventional public private partnership.

In NPD, investors buy public bonds to fund new hospitals or schools, from a private sector firm ‘with a public sector ethos’. The company can also raise funds on the money markets. The aim is not to cut out private finance but to provide cheaper private finance than PFI, for example by bundling projects together.

The NPD model forms the basis of the Scottish Futures Trust, put forward by the Scottish National Party administration last December as an alternative to private finance for public sector infrastructure. Consultation on the trust has now ended and it is understood that at least one other NHS board has been asked to scrap plans for a PFI in favour of an NPD.

Despite the Scottish government’s backing for NPD, it chose public finance in the Glasgow case because it was £20m a year cheaper than NPD, according to a government spokesman.

The adult hospital will have 1,109 beds and will be built alongside a 240-bed children’s hospital. Maternity services and a new laboratory will also be on the site.

Andrew Robertson, NHS Greater Glasgow and Clyde chairman, said the investment was historic. ‘It will see Glasgow become home to the largest, most advanced single NHS development in Scotland. Achieving this gold standard of triple co-location will ensure immediate access to specialist services of all kinds and therefore the highest quality and safety standards for adults, children and babies,’ he said.

The board will now put together its full business case. Construction of the hospitals is due to begin in spring 2010, with the children’s hospital completed three years later. The adult hospital is due to open in the second quarter of 2014.


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