Delivering Pathology Services: The PFI Laboratory and Pharmacy Centre at Altnagelvin

John Dowdall, the Comptroller and Auditor General and Head of the Northern Ireland Audit Office, today reported on the new PFI Laboratory and Pharmacy Services Centre at Altnagelvin which opened last year. The Centre, costing £15.2 million, was funded through a
25 year public private partnership. Specialist equipment costs of £3.1 million, which were outside the scope of the deal, were funded separately by the Department. The Centre is an important part of a £250 million redevelopment programme for Altnagelvin, which is to be delivered in five phases to the end of 2015-16.


Main Findings

  • The facilities at Altnagelvin, before the new Centre was constructed, would not have continued to meet required standards for laboratory accommodation. Laboratory and Pharmacy Services in the area served by the Altnagelvin Hospital are likely to experience increasing demand due to factors such as increases in population and an aging population. The new facilities will enable the Trust to meet new accreditation, benchmarking and clinical governance requirements.
  • In the original Business Case a publicly funded solution was the preferred option. However, the Trust selected a PFI option, after considering the financial consequences of any delay on the entire Altnagelvin development programme timetable and the risk of financial exposure to the Trust of a publicly funded Centre.
  • It took over six years from the appointment of the advisors to the project, to contract signature in April 2005. As a result of these delays and changes over the period of the project, financial and legal advisors’ fees increased from an original estimate of £95,000 to over £280,000. The internal costs associated with the lengthy procurement process were not measured by the Trust.
  • The development of an outline design or “exemplar design” was intended to increase certainty regarding the costing of the project. However, design changes, negotiation with the preferred bidder and delays in the procurement resulted in 20 per cent increases in construction costs and annual payments over the 25 year term of the contract.
  • In December 2007, DHSSPS published its Recommendations for the Future of Pathology Services in Northern Ireland. These recommendations impact on the future of the new Centre at Altnagelvin and followed a 2001 Public Accounts Committee report. However the recommendations came too late to inform the business case for the capital development project at Altnagelvin.