An independent report into the £24m Altrincham Health & Wellbeing Hub has revealed the catalogue of failures which have left the building largely empty, six months after it was supposed to open.
The report was commissioned by the Greater Manchester Health & Social Care Partnership last year after the building, which was supposed to open in October, ended up standing vacant following a dispute with its original tenants.
The 88,000 sq ft centre opposite the town’s market was originally due to house three GP surgeries, a paediatric service provider, and an NHS service centre, but the building has remained empty after Trafford’s Clinical Commissioning Group announced it was “revisiting its long-term strategy” last year.
Documents showed the centre was facing a £1.9m funding gap before any of the proposed tenants could move in, with all six occupiers declining to move unless a “cost neutral position” was met.
Now a damning independent report by consultant EY has pointed to a series of flaws in the CCG’s decision-making when commissioning the building in 2014, and its failure to act as problems began to mount.
The findings include:
- The decision-making process in 2014/15 over the construction and occupation of the hub was badly flawed;
- The three GP practices and other NHS services earmarked to occupy the building had never contractually agreed to do so;
- There had never been potential tenants earmarked for 20% of the building’s empty space;
- Under the deal to deliver the building, the CCG would have been liable for the cost of any empty space until it was filled;
- The CCG had negotiated “no benefit” from any profit made on the development to offset risks or costs;
- The CCG had done “too little to rectify the situation” until 2018
The report said the mistakes were avoidable opportunities to rectify them were missed “because of weak governance, lack of effective challenge, changing leadership, and lack of adherence to proper processes”.
At the early stages of the project, which was formulated in 2014, EY found there was “no evidence” of a detailed review into the building’s full business case, which was only 80% complete when submitted to the CCG’s governing body in May 2015.
“Throughout the project, and in particular the crucial decision-making period of February 2015 to February 2016 there was a consistent failure to provide appropriate oversight and scrutiny of the project, and, critically, to ensure that there were contractual commitments from tenants to move into the building prior to long term financial commitments being entered into,” said the report.
The report also criticised the “close professional relationships” between individuals working for Trafford Council, the CCG, and Citybranch. Individuals who had worked for the council and for the CCG went on to attend Trafford Council and CCG meetings with Citybranch, providing “consultancy services” to the developer after leaving their roles.
Responding to questions from Place North West over the council’s relationship with Citybranch, a Trafford spokeperson said: “Once an employee leaves the council they are free to take up employment elsewhere. The report notes the work undertaken by the former employee was over a year after the agreement for lease had been reached on the Altrincham Hub.”
EY’s report added there was “no evidence of due diligence being performed on Citybranch in the manner that a competitive procurement exercise normally demands, for example, assessing the company’s compliance with laws and regulations and its likelihood of being able to continue to trade.”
However, the developer, which had previously delivered the new Altrincham Hospital on Stamford New Road, stated to EY that due diligence was performed.
According to the report, the decisions made by the CCG over the project had been challenged by NHS England; however, the CCG took four months to respond to these, without addressing the specific concerns raised, and no further action was taken by NHS England.
There was also “little evidence” the project’s programme was managed efficiently by the CCG’s governing body, with the report arguing: “Management failed to recognise and address the risks inherent in the programme and the governing body did not hold them effectively to account.”
EY’s report concluded: “We obtained no evidence of robust evaluation of other locations or challenge to the size of the hub. Financial analysis was weak. The risk assessment was unreasonably optimistic. The governing body collectively failed to assess that the commercial risks and rewards of the programme were unfavourable to the CCG when approving the full business case and during decisions subsequently taken.
“From the evidence available, this appears to be a poorly conceived programme with poor commercial outcomes for the CCG and should not have been progressed without fundamental questions being asked and resolved in relation to the size of the development and the commercial terms.”
The CCG is now likely to have to find £1.5m to ensure the building is occupied, with its preferred option to convert the top floor into commercial office space; this was originally set aside for the NHS Service Centre.
The body’s preferred option is to move the GP surgeries into the first floor, with community services provided on the ground and second floors; the surgeries due to move are St John’s Medical Centre and Barrington Road Surgery.
Other options considered included the whole building into office space at a potential cost of £7.2m.
However, this has now been ruled out by the CCG’s governing body following a meeting yesterday. Cushman & Wakefield, Knight Frank, and Avison Young have all advised the CCG and Trafford Council on the next steps for the project.
NHS Property Services is paying £1.6m in rent on the building per year, along with £750,000 in rates, insurance, and facilities management. Along with a £111,000 facilities management contingency budget, this amounts to £2.4m a year. The building has subsequently been sold to Canada Life, which agreed to forward-fund the project. NHS Property Services has the option to acquire the freehold lease of the building after 30 years for a nominal sum of £1.
Altrincham Library, which relocated from its existing site at Clarendon House, has moved as planned and opened in the building’s ground floor last year.
Jon Rouse, chief officer of the Greater Manchester Health & Social Care Partnership said: “Without doubt this is a building which has the potential to be a great asset for the people of Altrincham and the surrounding area. But at present it is a wasted asset.
“Our collective focus over the last six months has been to rectify the current situation, and my team are now supporting the CCG, along with NHS Property Services, to secure tenants for the building, with a focus on local health and care services. Progress is encouraging and of course, if successful, this will minimise the financial impact.
“However we must learn from what went wrong to make sure this is not happening anywhere else now, and cannot happen again.
“There have been changes to rules and procedures nationally in the NHS since the events of 2014 and 2015 which should prevent this in future and I’ve asked all NHS organisations in Greater Manchester to reflect on their decision making and ensure they are always acting fully in the public interest.
“There is no doubt that this is a serious situation. The governing body at the time failed to handle an avoidable situation – the report concludes they could, and should, have scrutinised this far more effectively.
“Trafford CCG is now under new and stable leadership at Board and executive level and has our full support as they seek to make the most of what I hope will become a real asset for Altrincham.”
Responding to the report, CCG bosses vowed to “learn from the mistakes of the past”, having set up a new programme board for the building.
Martyn Pritchard, accountable officer for Trafford CCG, said: “The report highlights issues around governance and leadership in the past which we have already started to address. The governing body has agreed a new constitution and is reviewing all its governance arrangements. A programme board has been created to work with partners to ensure the best use of the building.
“The report also recognises the CCG is under new leadership at executive and board level and as accountable officer I want to assure everyone that I will make sure we learn from the mistakes of the past to ensure something like this will doesn’t happen again.
“My job now is to make sure we use all the money we have to fund the NHS in Trafford as best we can to provide the care and treatment that local people need.
“The report found the decision making was flawed from the outset so the governing body has agreed to rent the top floor for commercial use which will provide the best financial return for the NHS.
“We are making progress on ensuring the rest of the building is used mainly for health and social care services. Negotiations are continuing with relevant parties and I am confident that we will be a in a position to announce tenants soon.
“Once in use, I believe this building will provide an excellent opportunity to improve the lives of people in Trafford in a purpose built modern healthcare facility.”
Responding to the report’s findings, Green Party Altrincham Councillor Geraldine Coggins said it showed “a story of incompetence, poor management and a lack of judgement”.
“This is a tragic waste of NHS money at a time when our health services desperately need more funds. The string of bad decisions made about this expensive building is absolutely shocking.
“We will be watching closely to see that the recommendations of the report are carried out, so that these mistakes cannot happen again. For now, we are keen to see the building, at this key location in Altrincham in use as soon as possible, so that tax payers are no longer paying rent on an empty building.”