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Health bosses 'exaggerated value of Procure 21 jobs by up to £3bn'

Government health bosses could have exaggerated the value of work to be won through the much-hyped Procure 21 by up to £3 billion, the AJ has learned.

NHS Estates, the soon to be defunct quango, heavily overestimated the amount of health construction work that would use the system.

One observer has claimed that there could be a shortfall of anything up to £3 billion in the cashflow being received by healthcare specialists in the construction industry.

And healthcare architects, including Nightingale Associates and Devereaux, have warned that smaller specialists will go bust if the lack of promised work is not remedied soon.

A senior NHS source has told the AJ that Procure 21 is in real trouble. 'The problem is that NHS Estates really overestimated the amount of work it would put through the new system.

'These problems all started when Procure 21 was first tested in two pilot regions. Instead of standing back and waiting to see what the results were, it simply rolled it out nationally without a pause. That was a mistake,' the source continued.

'The question that needs to be asked is whether the whole Procure 21 system deserves to be allowed to continue. We need to stand back and ask whether it is delivering or not, and the simple answer is that it seems not to be. It is not the right answer to the NHS' procurement problems,' the source added.

Several architects agreed that there are real problems being faced by practices dependent on healthcare work.

'It has been nothing like what we had hoped for,' Mike Nightingale, boss of Nightingale Associates, warned.

'We had hoped that cashflow would be much bigger, but it has been very slow and very frustrating. If we were a smaller firm, then the problems of Procure 21 could be seriously damaging,' he said.

Nicholas Allen, a partner at Devereux, which has just completed a hospital in Gibraltar, said his practice was also disappointed with the procurement method.

'We used to do a lot of traditionally funded schemes,' Allen said. 'But this is a much slower kind of income.

'We have £27 million worth of Procure 21 work, and that pleases us, but the cashflow is far slower than we could have envisaged,' he added.

It is understood that NHS Estates will finally cease to exist as an entity in the summer. As yet it is unclear what will become of the Centre for Healthcare Architecture and Design.

by Ed Dorrell

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