Greenaway et al 2007 report that between 1990 and 1992 a new phase started with the arrival of a new chief executive of the District Health Authority. The new chief executive was David Walker and coinciding with his appointment was the view that two hospitals (one at Colney and one at St Stephen's) would be inefficient (page 722). In 1990/91, a reassessment of the St Stephen's site was carried out. The cost of achieving necessary electrical, mechanical and building work to bring it up to an acceptable standard was put at £15.3 million at 1991 prices (NHA 1992, 10) and in 1991, the plans for a split site were put on ice after the Government requested a review of possible services at Colney (Eastern Evening News, 24 April 1997). Five options were considered, namely
• little change;
• rationalisation on two sites (St Stephen's and West Norwich);
• rationalisation on two sites (St Stephen's and Colney Lane and the
closure of West Norwich);
• concentration on St Stephen's only; and
• concentration on Colney Lane only (NHA 1992, 4).
In spite of the first option being the cheapest, the fifth option (a new hospital at Colney Lane and the closure of St Stephen's and the West Norwich hospitals with a combined sale value of £12 mn) was recommended in March 1992 (NHA 1992, 19,20). The recommendation was for a new hospital of just over 1000 beds for acute general and acute mentally ill patients costing £147 mn (for buildings and equipment) (NHA 1992, 19). The NHA also recommended a period of public consultation on the issue from March to June 1992 (NHA 1992, 8, 24)
A majority of the hospital consultants quickly accepted the case for a single site in spite of many being fond of the old city centre hospital (Greenaway et al 2007, 723 and P&TC, June 1996). The Consultants' Committee employed Savills (the estate agents) to show that land values and their sale would make the Colney option the cheapest and most cost-effective choice38 (Greenaway et al 2007, 728). Pressure against the retention and redevelopment of St Stephen's hospital was assisted by a study carried out by the Department of Health in conjunction with architects, Povall Worthington, which reported to show that the concept was unrealistic and too expensive (see Eastern Evening News, April 24, 1997(sic))39.
In 1993 an Outline Business Case (OBC) was submitted which envisaged the development of a 1090 bed hospital on the Colney site (including Mental Health) at a total capital cost of £150 mn (NNHCT 1996, 21) and with the closure of the St.Stephen's and West Norwich hospitals. Although this OBC was reported to be rejected by an Evaluation Panel (it appears because of it being too big), the NNHCT stated that; "there has been full public consultation on the proposal to provide one DGH at the Colney Lane site [and} closing the Norfolk and Norwich and West Norwich hospitals which was not opposed and was supported by the Community Health Council" (NNHCT 1996, 4)
But it was now, in the early 1990s, that the rules of the game were changed in the form of the introduction of the Private Finance Initiative (PFI). It was also in 1994 that the NNHC Trust was formed and "the responsibility for taking the project forward lay with the newly created Norfolk and Norwich Trust and not with the DHA" (see Greenaway et al 2007, 723). Furthermore as Greenaway et al point out, the new chief executive of the Trust (Malcolm Stamp) was a forceful, political actor.
In October 1994, another Outline Business Case was submitted, this time by the Trust. This one was different in two important respects from the one presented a year earlier. The proposal was for a much smaller hospital (779 beds) and it was to be financed by the private sector (NNHCT 1994, page 8 and Appendix III). This smaller hospital was compared with three other alternatives, namely;
• doing nothing;
• rationalising the St Stephen's/West Norwich hospitals, and with a total of 820 beds; and,
• concentrating on the one site at St Stephen's providing 743 beds (NNHCT 1994, page 1, Chapter V and Appendix III, and UK Parliament July 1999, para 223)
The Net Present Values (at a discount rate of 6% pa) of all four alternatives were very close to one another - all at close to £1.55 bn (NNHCT 1994, 31 and Appendix VI). The capital cost at Colney Lane was estimated at £123 mn at November 1994 prices. The sale value of the St Stephen's and West Norwich hospital sites was given as £7 mn.
The recommendation of the 1994 Outline Business Case (OBC) (a new hospital at Colney Lane to be financed under the PFI but with 701 beds) was approved in January 1995 by the Anglia and Oxford Regional Office of the NHS Executive (NNHCT 1996, 24). Following this decision, the newly-created Trust Board decided not to take ownership of the land and buildings at the St Stephen's and West Norwich hospitals but from then on to rent them back from the Secretary of State for Health (NNHCT 1996, 16). This resulted in fixed assets with a value of £68 mn being written off the Trust's Balance Sheet (NNHCT 1994/95, 50)
38 . Richard Jewson was the chairman of Savills from 1995 to 2004 and was the chairman of Octagon Healthcare (the company financing the hospital - see later) from 1998 to 2006
39. In its report the Department of Heath stated that the Norwich City Council were against the redevelopment of the St. Stephen's hospital. This was not strictly true as was pointed out by the Eastern Evening News in 1997. The EEN stated that although Norwich City Council were against a 1600 bed hospital on the St.Stephen's site, they were not necessarily opposed to a redevelopment at St. Stephen's on a much smaller scale - such as that being proposed for Colney. Similarly the Department of Health/architects reported that the St.Stephen's site could not be redeveloped easily if 1600 beds were required but they were not asked to look at the possibilities of a much smaller hospital at St.Stephen's as was being proposed for Colney (Eastern Evening News 24 April 1997 and page 3 of http://www.takeheart.co.uk/kohin/consult.htm accessed on February 7 2008).