To agree an increase in value offered as an investment to Wye Valley Trust to enable the development of an Education Centre at Hereford County Hospital. To further explore options around a strategic investment partnership and bring a business case back to cabinet for approval in Autumn 2024.

The cabinet member for economy and growth provided an overview and update on the progress of the work to develop the education centre at the county hospital in Hereford. It was highlighted that officers from both Herefordshire Council and the Wye Valley Trust had been working together to deliver a full business case in the autumn. The project was an enabler for economic growth, providing an exemplar state-of-the-art teaching facility that would play a critical part in upskilling staff and supporting Herefordshire Council and the Wye Valley Trust to recruit and retrain staff.

The cabinet member for economy and growth highlighted there was greater clarity around the build costs and that Wye Valley Trust had been engaging with NHS England to increase the trust’s CDEL limit.

It was also highlighted that whilst the centre would not be an asset of Herefordshire Council (as stated in the papers), the council would be working with the trust to minimize any environmental impact.

The cabinet member for finance and corporate services supported the project and described it as a win win/no brainer, which would grow the economy and create a highly qualified workforce, whilst being revenue neutral.

Group leaders acknowledged the importance of supporting investment in skills development within the health service, but raised concerns about the increasing costs involved with the project. It was noted that the over the last 8 months, the estimated overall cost of the work had increased by 60% from the original £10.5 million. The loan requested from Herefordshire Council had risen from £6 million to £15 million, whilst during the same period the Wye Valley Trust component appeared to have nearly halved from £4.5 million to £2.5 million.

Concerns were raised that by the time the business case was available, costs could have potentially doubled again and several questions were asked in relation to establishing what factors had driven up the costs of the project. The wording of the report’s terminology of an increase in value of the investment was noted as being unhelpfully bureaucratic.

Group leaders asked if similar projects had been operated elsewhere in the country and if they had been successful.

Group leaders also sought clarity as to whether the recommendation in the report was seeking approval for the increased costs of the project or for it to be noted.

Clarity was sought about the repayment terms and a question was asked about why the Wye Valley Trust was using the Council as a ‘middle person’ for a loan, when the money would still appear to be included in CDEL, rather than borrowing from the Public Works Loan Board.

The cabinet member for economy and growth, explained in response to questions from group leaders, that the Wye Valley Trust had assessed the project and was reporting a cost of £17.5 million, but that this was pending a full business case, which would be available in the autumn. The cabinet was not seeking to approve the loan today and was noting progress.

The cabinet member  ...  view the full minutes text for item 107