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A report by the Northern Ireland Audit Office (NIAO), published today (February 27), has revealed that construction of the long-awaited Newry Community Treatment and Care Centre (previously known as the Health Hub) on the old Abbey CBS football grounds at Courtney Hill, is due to begin in April 2025 with completion in March 2027.
Originally to be built and funded by the private sector and paid for annually over a 25-year term by the Southern Health and Social Care Trust through its revenue budget, the centre was due to be operational by March 2016. However, continuous delays eventually led to the Southern Trust taking responsibility for the project delivery out of the private sector in early 2023 and it is now being taken forward through a standard procurement process funded by the Trust.
It had been reported in November 2021 that work on the Newry Community Treatment and Care Centre would begin in spring 2022 and open at the start of 2025.
Responding to an update request by Newry, Mourne and Down District councillors on the multi-million pound project, Sharon Gallagher, the then Chief Executive of the Health and Social Care Board said the Newry facility “has been given Department of Health approval to move to full business care development. This stage includes finalisation of detailed design and contract fine tuning.
“Subject to approval of the business case, the contract is expected to be awarded in spring 2022, followed by a two-year build programme which expects to complete in summer 2024. Commissioning of the services within the building is expected to take six months and current projected timescale for the opening of the new centre is early 2025.”
“High priority”
The NIAO ‘Major Capital Projects: Follow-up Report’ explains that, along with the Lisburn Primary Community Care Centre, the Newry centre was identified as a “high priority for improving the delivery of integrated primary and secondary care services.”
Plans to develop both centres were initiated under Ministerial Direction in March 2013 and “recommended for ‘fast tracking’, with the new facilities expected to be operational by March 2016 at a cost of almost £80 million.”
Accord to the Report, the Strategic Investment Board has “previously stated that this was probably an unrealistic target, particularly when a relatively innovative process of third-party development (3PD) had been proposed.”
Under 3PD, the Southern Trust would have entered into a contract for the design, build, finance and maintenance of the new Newry health facility over a term of 25 years.
The capital cost of design and construction of the new facility would fall to the private sector developers, together with on-going maintenance over the period of the lease arrangement. Once operational, annual service payments were to be made by the Trust and funded through Trust’s revenue budgets.
The Report states that the “original estimates, at the time of the Ministerial Direction in March 2013, anticipated annual service charges of just under £3.6 million for the Newry centre” but, “as the procurement process progressed, with greater cost certainty through tenders submitted at the preferred bidder stage, expected service charges fell slightly.”
The Newry ‘Health Hub’ project was officially launched to the market in summer 2013 and, following a period of engagement with potential providers on design solutions and formal tendering, a preferred bidder was formally appointed in April 2016.
Planning delays
Prior to moving to award of contract, the Report says, the Southern Trust “entered into a period of design finalisation and contract fine-tuning with their appointed developers. During this time, final planning applications were submitted.”
While planning approval for the Lisburn facility was received in May 2017, permissions for Newry (submitted in 2016) remained under consideration and continued delays.
“Negotiations over planning permission between the contractor and Newry, Mourne and Down District Council were lengthy and only resolved in December 2019, with planning approval received in July 2020, at which point the DoH [Department of Health] told us [NIAO] the contract was expected to be formally awarded to the preferred bidder to allow construction to commence,” the Report says.
It continues: “The DoH told us that subsequent delays were due to the impact of the COVID-19 pandemic and construction price inflation arising from global market conditions.
“In November 2021, the preferred bidder advised DoH that it was unable to proceed with the project in accordance with its tendered costs as uplifted by indices to take inflation into account.
Southern Trust purchase site
“DoH told us that CPD Health Projects (now DoH Health Estates) then considered alternative procurement options for the project. Due to the scheme design being at such an advanced stage, with full planning approval secured for the developer’s intended site and the lack of suitable alternative sites in the Newry area, the procurement advice was to purchase the site and design from the developer and tender the project as a conventional tendered work contract.
“A Strategic Outline Case was submitted to DoF [Department of Finance] for approval in September 2022, and approved in March 2023 following queries with DoH and DoF.
“This approval granted the Southern Health and Social Care Trust permission to purchase the site and existing design from the developer at a cost of £4.5 million.
“An Outline Business Case for the project was submitted in July 2023 and is currently going through the review process. The latest capital cost estimate for the Newry PCCC (now known as the Newry Community Treatment and Care Centre (CTCC)) is £88.3 million with construction due to begin in April 2025 and complete in March 2027.”
