Consultants’ bills exceed $3.3m

A view of the main inpatient hospital building from Cumberland Street.
Image: supplied
The government spent more than $3 million on consultants while planning cutbacks to the new Dunedin hospital, it has finally confirmed.

The figure — released to the Otago Daily Times following three requests under the Official Information Act — was reasonable given the scale of the project, Te Whatu Ora Health New Zealand (HNZ) said.

The ODT contacted the Office of the Ombudsman, which deals with complaints about government agencies, about the issue earlier this year.

HNZ told the ombudsman last month it had not understood the first two requests were asking for costs.

Last December, the government announced a $110m funding boost to address a $200m budget blowout for the new hospital and $90m of design cuts.

Asked the total cost of consultancy work for the value management process which established the saving, HNZ said records indicated the spend was $3,344,880.

Director of delivery, infrastructure and investment Monique Fouwler said the money was spent "to better manage evolving risks to the project" and to "provide market-led design innovations and efficiencies".

"This amount for consultants to carry out this work is 0.2% of the total budget of $1.59 billion and is reasonable within a project of this scale and magnitude," she said.

HNZ did not clarify language used in the response or the end date in which the work was carried out until last month, in a response to the ombudsman.

HNZ said it could have been more explicit and apologised if its terminology was confusing.

The value-management process that resulted in the approval of a $90m design cutback was carried out between September 2021 and December 2022, but the majority of the consultancy work was carried out between May and October 2022, it said.

It understood the first two Official Information Act requests were asking about the consultants who undertook the value management, "not the cost related to value management", HNZ told the Ombudsman.

In January, the ODT asked several questions with the explanation that it wanted information about the consultants who undertook the value management for the new Dunedin hospital resulting in the $90m savings.

This included a question on "the total cost of the consultancy work".

HNZ responded that the total cost for all consultancy work on the inpatient building as at February 23, 2023 was $51,444,302, but said the figure was not limited to the value management work.

After a second unsuccessful attempt, the ODT complained to the ombudsman, and sent a similarly-worded third request to HNZ which yielded the $3.3m figure.