Audit Wales has found a “sound enough basis” for decisions made around a new cancer centre.
In March 2024, after Welsh Government approval, Velindre University NHS Trust (the Trust) agreed a long-term contract with a private consortium, ACORN, to design, build, finance and maintain the new Velindre Cancer Centre (nVCC) in Whitchurch, Cardiff.
The Trust’s existing cancer centre in Cardiff, serving around 1.7 million people, is no longer deemed fit for purpose. Improving cancer services is a key priority for NHS Wales and the nVCC supports national and regional healthcare objectives. It is a central part of the Trust’s wider Transforming Cancer Services programme for south-east Wales.
Audit Wales examined whether the Trust and the Welsh Government can demonstrate a sound basis for key decisions on the nVCC taken so far.
To date, the nVCC is the only NHS project to use the Welsh Government’s Mutual Investment Model (MIM). The project has already attracted a lot of public interest, including around its location, the model of cancer care, the use of the MIM, and the appointment of ACORN. The significant long-term costs make a sound basis for decisions even more important.
Cost estimates have evolved over time but delays in the latter stages of the nVCC project’s development increased its exposure to price inflation. The most significant cost is the MIM contract with ACORN (the nVCC contract) which is projected at £885 million over 25 years. Within this, the contracted construction cost of £321 million appears reasonable given the Trust’s benchmarking and other advice, Audit Wales said.
As well as the nVCC contract, there are other costs to bring the nVCC into operation and manage it. These costs are expected to be at least £765 million over 25 years.
However, Audit Wales estimate that continuing to manage and maintain the existing centre would otherwise have cost at least £600 million over 25 years. This would also have been without any additional benefits the nVCC offers.
Overall, the governance arrangements supporting key decisions provide assurance that they were properly made, Audit Wales said. The Trust followed well-established business case and project management processes satisfactorily enough, and there has been appropriate scrutiny and expert and stakeholder input, it added.
The procurement process followed the regulations in place at the time, informed by extensive legal advice, said Audit Wales. While it has identified areas for improvement in the parts of the process examined, Audit Wales do not consider that they undermine the overall integrity of the final decisions to proceed with the nVCC contract, it said.
Whether spending on the nVCC delivers value for money will depend on whether it delivers the expected benefits over time and in a changing environment for cancer services, said Audit Wales. It will also depend on whether provisions in the nVCC contract to protect the public purse stand strong.
Auditor General Adrian Crompton said:
“Decisions about the nVCC project have been for the bodies involved to make, mindful of the overall costs and the inherent risks of long-term private finance contracts. While I recognise there are those who remain opposed to the project, the processes followed by the Trust and the Welsh Government during the period we examined have, overall, provided a sound enough basis for those decisions.
“Our findings do not, however, mean that the construction and operation of the nVCC will be problem-free. And it will be some years before a broader assessment of value for money can be made.”
