The strategic support for the Paddington Health Campus vision was unsatisfactory

23  The Department provided support and encouragement to the Campus partners - mainly on the financial challenges facing the scheme - both through its membership of the Principals' Group and access to the senior responsible official at the Department. It also set out its assessment of the conditions necessary for success on numerous occasions and offered limited capital and revenue funding to support the scheme.

24  However, the Department had no strategic position on the desirability to the NHS or 'UK plc' of a successful health Campus. It did not share the Campus partners' view that this was a scheme of national importance. As a matter of policy the scheme was treated as the responsibility of the local NHS to resolve, as budgets had been devolved to local NHS organisations. The two NHS Trusts, Partnerships UK and Westminster City Council told us that they had been uncertain whether the Department did in fact want the Campus scheme to succeed, while the Department has explained that it was willing to support an affordable scheme.

25  The Department was clear that its two roles in respect of the scheme were a) to offer advice on scheme particulars and development and b) to consider the Full Business Case. Approval of the 2000 OBC was delegated to the London Regional Office of the NHS and the Department played no role at that stage. The Department, from mid-2004, expressed its concerns as to the viability of the scheme. At no point did it ask the Campus partners to carry out further work on the scheme but it responded positively to requests that the scheme be allowed time to explore new opportunities.

26  The Campus partners believe the Department played a more active role than this suggests. No substantive steps were taken by the Campus partners from April 2004 to May 2005 without the consent of the senior responsible official at the Department. The Campus partners believed they had political strategic support for an affordable scheme.

27  The circumstances under which the Paddington Health Campus scheme collapsed were unique. It faced scheme-specific constraints on site, size and complexity of governance arrangements for three sponsors. Nevertheless, we consider that there are lessons for all NHS capital investment schemes which need to be reflected in any guidance used by Trusts. We recommend that:

a  The Department should implement its own Capital Investment Manual guidance on reassessing OBCs if estimated capital construction costs rise more than 10 per cent above approved OBC values.

b  No capital investment scheme in the NHS should proceed without the formal identification of a single sponsor, even if this means Trusts must merge prior to starting a procurement.

c  No OBC should be approved where it has been subject to conditions imposed by an NHS Trust which explicitly constrain the development of options or limit value for money that may be secured.

d  Any approval conditions on OBCs should be subject to a formal review timetable under which the approving authority will review and document the continued viability or acceptability of the scheme.

e  No scheme should proceed without formal confirmation from commissioners, who would be expected to support the scheme, and the NHS Trusts themselves, of assured funding for full development costs.

f  Third parties negotiating on behalf of NHS Trusts should only do so under written instructions.

g  The Department should ensure that formal timetables are drawn up and followed for the identification and transfer of scheme responsibilities and commitments in periods of NHS reorganisation.

h  The Department should ensure that the lessons learned above are incorporated into the Capital Investment Manual.

i  The Department should consider and performance manage capital investment schemes with a national dimension within the context of a national strategy for NHS capacity planning.