Several sources told the Otago Daily Times that a few weeks ago the ministry, faced with rapidly escalating construction costs, decided to go ahead with the outpatient building, currently under construction, as planned.
However, he ordered a review of the entire hospital building, during which even minor details were re-examined as to their essentiality.
The ODT reported in July that the design of the hospital was being reviewed and at the time Health Minister Andrew Little said that reducing the size, scale or services to be provided in the planned new hospital was not envisaged.
However, a source told the ODT that the cost-cutting proposals included the removal of more than 50 beds from a hospital complex currently planned to hold 421 beds in total, and also that some of the 16 to 21 planned operating theaters could be removed or only partially built.
Several departments of the existing hospital had already been pulled from the new hospital during the planning process, and others that had made this reduction were now being reconsidered.
Another said medical staff – some of whom were reportedly told of the proposals a fortnight ago – were gravely concerned that the inpatient building, which was already likely smaller than they had hoped, could shrink again.
It is understood that many of the proposed cost-cutting measures have been vigorously opposed by clinicians, meaning that no final decision on the final shape and scale of the building has been made.
However, it seems likely that the hospital approved by Cabinet on the basis of detailed planning documents will not be the hospital that is ultimately built.
Mr Little said yesterday that every major building project in the hospital system has been asked to carefully consider its costs.
“That’s because in the current climate, we expect costs to escalate,” he said.
“In relation to the new hospital in Dunedin, I have received no notice of any proposed changes to the scope or scale of this project.”
National List MP for Dunedin Michael Woodhouse said it was outrageous that cutting beds or services in the new hospital was even being considered, and that the government should build the people of Otago and Southland like he had promised them to do so.
‘I am deeply concerned but not surprised that once again Treasury officials are getting what they want, and if this Labor government goes along with this they are going to be massively failing the people of the South,’ he said .
“We know what we need. It was clearly articulated through the indicative design, the business case and the detailed business case, and for them to suggest that beds could be removed from this hospital in the face of a growing and aging population is absolutely outrageous.”
The budget for the new hospital was increased to $1.47 billion a few months ago, and Mr Little acknowledged that it may need to be increased again due to inflationary pressure and rising skyrocketing cost of building materials – factors that weren’t present when what was originally a $1.2 billion budget was set.
A slide presented at a health care conference a week ago showed the budget was now $1.7 billion, a figure Mr Little did not comment on yesterday.
Mr Woodhouse, a former hospital administrator, said he recognized construction costs had risen significantly, but detailed planning work had established the size of the hospital and the services it should have, and so that it is always suitable for the future. it was to be built as planned.
“If they cared about the people of the South, the Labor government would tell the Treasury to step aside, fund the hospital properly and carry on.”
This is not the first time that planners have tried to reduce the proposed size of the new Dunedin hospital: in 2020 the Department of Health and the Southern District Health Board pushed for a single hospital building, rather than the two planned, be built as a cost-cutting measure, a proposal rejected by then-Health Minister Dr David Clark and Finance Minister Grant Robertson.