Royal Hospital for Children and Young People: independent assessment of governance arrangements

1 Introduction

1.1 Background

1.1.1 On 4 July 2019 it was announced by the Scottish Health Secretary that the opening of the newly built NHS Lothian Royal Hospital for Children and Young People (the “Hospital”), due to open on 9 July 2019, was to be postponed due to issues identified with the air ventilation system at the Hospital (the “Delay”).

1.1.2 The Health Secretary took the decision to delay the opening of the Hospital following final safety checks which revealed that the ventilation system within the Critical Care department required further work to meet national standards, the relevant standards being the Scottish Health Technical Memoranda (“SHTM”).

1.2 Our instructions and approach

1.2.1 KPMG LLP (“KPMG” or “we”) has been instructed by NHS National Services Scotland (“NHS-NSS”), to independently establish the facts surrounding the decision to delay the move to the Hospital. As part of this assessment KPMG has specifically been instructed to consider the following areas:

a) To establish what decisions were made by NHS Lothian (“NHSL”), when these were made, by whom and on what basis these decisions were taken in relation to the air ventilation issues and any other material issues that led to the Delay;

b) To determine the extent to which the design specifications with regard to air ventilation complied with the SHTM standards at each stage of the Hospital

project^[1], the ‘project’ being the design and construction of the Hospital (the “Project”)^[2];

c) To understand what professional and technical advice was given to the NHSL Board, in particular when derogations were proposed, who agreed them and the risk assessments that were undertaken to reach a final decision; and

d) To establish the governance arrangements that were in place in relation to the Project and the line of sight of NHSL and the Scottish Government (“SG”), along with the escalation arrangements to NHSL and SG.

1.2.2 The focus of our review has been on the activities and decisions taken within NHSL.

1.2.3 We have held discussions with individuals from NHSL, along with individuals from the following entities:

a) Mott MacDonald Group Limited (“Mott MacDonald”) – NHSL’s technical advisors and project managers for the Project;

b) MacRoberts LLP (“MacRoberts”) – NHSL’s legal advisors;

c) Integrated Health Services Lothian Limited (“IHSL”) - the party that the NHSL Board entered into a project agreement with for the design, build, finance and maintenance of the Project;

d) Institute of Occupational Medicine (“IOM”) – a third party firm of specialist validation experts whom NHSL instructed to undertake testing on the Hospital’s ventilation;

e) Health Facilities Scotland (“HFS”) - a division of National Services Scotland which provides operational guidance to NHS Scotland bodies on a range of healthcare facilities topics; and

f) Arcadis NV - the Project’s Independent Tester (“IT”).

1.2.4 In addition, we reviewed key documentation provided by NHSL and the above entities.

1.3 Structure of this Report

1.3.1 In Section 2, we set out the Executive Summary.

1.3.2 In Section 3, we set out the background to our work, including details of the Project relating to the build of the Hospital and the timeline of events leading up to the Delay.

1.3.3 In Section 4, we set out our observations in relation to whether the design specifications with regard to air ventilation made reference to the SHTM standards.

1.3.4 In Section 5, we set out details of the professional and technical advisors that advised the NHSL Board and the extent to which they were involved in providing advice in respect of derogations.

1.3.5 In Section 6, we set out our observations in relation to the governance arrangements that were in place for the Project.

1.4 Limitations of scope

1.4.1 The content of this Report is based on information provided to KPMG by representatives of NHSL, Mott MacDonald, MacRoberts, IOM and the IT. Except where explicitly stated, we have not independently verified this information and have relied on statements made and documents and data provided.

1.4.2 Whilst we make reference to SHTM in this Report, we are not technical experts on ventilation standards and give no comment on the technical accuracy of the content of documents we have been provided. We understand that the Health Secretary has commissioned a separate independent review in relation to the technical aspects of the Delay. Comments made in this Report by KPMG are made in the context of our review and our understanding of the documents made available to us.

1.4.3 In undertaking our work we have had regard to elements of the contractual documentation relating to the Project, and have set out extracts of these in this Report. However, nothing in this Report should be regarded as constituting legal interpretation of such documents or the provision of legal advice.

1.4.4 We have not been instructed to determine exactly what led to the Issue^[3] or to opine on the accountability of individuals or organisations in respect of the Issue.

1.4.5 Whilst we have considered the governance arrangements in place from the date of the project agreement, being an agreement with IHSL for the design, build, finance and maintenance of the Project on 13 February 2015 (the “Project Agreement”), we have not considered the governance arrangements prior to this time.

1.4.6 Should any additional information or documentation subsequently become available which is relevant to our scope of work, we reserve the right to amend our findings in light of that information.

1.4.6 The scope of our work is different from that of an audit and does not provide the same level of assurance as an audit.

1.5 Notice: About this Report

1.5.1 This Report has been prepared on the basis set out in our Engagement Letter addressed to NHS-NSS (“the Client”).

1.5.2 Nothing in this report constitutes legal advice.

1.5.3 We have not verified the reliability or accuracy of any information obtained in the course of our work.

1.5.4 This Report is for the benefit of the Client and has not been designed to be of benefit to anyone except the Client. In preparing this Report we have not taken into account the interests, needs or circumstances of anyone apart from the Client, even though we may have been aware that others might read this Report. We have prepared this Report for the benefit of the Client alone.

1.5.5 This Report is not suitable to be relied on by any party wishing to acquire rights against KPMG LLP (other than the Client) for any purpose or in any context. Any party other than the Client that obtains access to this Report or a copy (under the Freedom of Information Act 2000, the Freedom of Information (Scotland) Act 2002, through the Client’s Publication Scheme or otherwise) and chooses to rely on this Report (or any part of it) does so at its own risk. To the fullest extent permitted by law, KPMG LLP does not assume any responsibility and will not accept any liability in respect of this Report to any party other than the Client.

1.5.6 In particular, and without limiting the general statement above, since we have prepared this Report for the benefit of the Client alone, this Report has not been prepared for the benefit of any other Health Board nor for any other person or organisation who might have an interest in the matters discussed in this Report, including for example those who were involved in the Project detailed in this Report.