Health says it can deliver the majority Phase 2 overhaul of the PEH close to budget, but the full modernisation of areas like A&E and orthopaedics would have to wait.

In the final months of this political term the warning signs are that Guernsey's finances are in a 'challenging' position.

Health has had 'value engineers' look at Phase 2 of the hospital project and now estimates it can deliver 80% of the work by 2029 for around £130m, which is relatively close to budget.

Last March it emerged the project was up to £30m over the £120m final bill the States had approved.

Now HSC is suggesting the second phase be split in two, with some elements delayed.

Phase 2A would increase surgical capacity and provide space for the anticipated extra demand that an ageing population will place on healthcare.

Phase 2B, which would modernise orthopaedics and A&E, would have to wait until there is the money. 

Deputy Al Brouard, who heads up health, says the hospital has to be upgraded:

“The committee remains unwavering in its commitment to deliver the benefits of Phase 2 in a fiscally prudent way, providing value for money for taxpayers and will keep States Members and the wider community updated.

"We are advised that 2A can be completed at a cost that is more in line with the cost envelope agreed by the Assembly, once inflation is factored in considering the longer time frame for delivery. This process will be ongoing during 2025 when the figures will become clearer as work progresses to the business case.”

 Deputy Lyndon Trott, P&R President.

Elsewhere, Guernsey's senior committee is warning that essential capital projects, like the post 16 campus at Les Ozouets, may have to be delivered over an extended period, to allow time for new revenue to come in to shore up States' finances.

P&R president Lyndon Trott says none of the approved projects should be paused, but there is a £62m shortfall to pay for them all.

"Having reviewed the portfolio of infrastructure projects the States has previously agreed, it is crystal clear to our committee that all are essential and all must continue.

"There are no “nice to haves” here. We are talking about investment in post-16 education, flood defences, the regeneration of the Bridge and associated housing, and the crucial Phase 2 of Our Hospital Modernisation."

"A significant impact is that the next Assembly will only have a fraction of the money it needs for essential improvements to the island, something like £150m when the total is more like £1bn.

Deputy Trott says Guernsey's exchequer is under stress:

"We need to generate surpluses in order to fund much-needed infrastructure projects and we simply won’t have them in the short term, which means the States’ reserves are being used to fund capital investment - and to cover the deficits, meaning our reserves, our island’s savings, are reducing."

"The Alderney Airport Runway Rehabilitation project will be debated by the States in the coming months and our Committee considers that any solution must be contained within the original estimate of £24m to make it affordable."

P&R is to begin a service review with States departments to look at the extent of public services that are delivered, and their cost, to see if savings can be made.