A HEALTH board paid out more than £11 million earlier this year to fix drainage and other issues at a delayed children’s hospital, a report has said.

The opening of the Royal Hospital for Children and Young People in Edinburgh was halted last month after final checks revealed the critical care unit’s ventilation system did not meet the necessary standards.

Health Secretary Jeane Freeman then said water and drainage systems at the site would also be assessed before a time frame for moving patients into the building could be set.

An Audit Scotland report into NHS Lothian from June this year – which was released yesterday – said the hospital was still scheduled to be fully operational by July 15.

The 2018-19 annual audit report also stated a payment was agreed in February with contractor Integrated Health Solutions Lothian (IHSL) Ltd in relation to the drainage, among other issues. The report states that there had been a series of technical and contractual disputes over the new hospital throughout 2017 “over and above what would generally be expected on such a project”.

It says NHS Lothian had identified a number of issues that it believed were not compliant with the original contractual requirements and raised concerns over what it felt would be a significant adverse impact on patients, staff and visitors.

The row was eventually settled when NHS Lothian agreed to pay IHSL £11.6m to resolve remaining issues – relating to a drainage solution, heater batteries, and void fire detectors – before the hospital was handed over in February. The audit report says: “This payment is in addition to the £150m construction cost as at financial close and £80m of enabling and equipment works outwith the agreement with IHSL.”

It has also emerged NHS Lothian is handing over around £1.4m a month to IHSL despite the delayed opening. KPMG is carrying out an investigation into the delays, while Scottish Labour has called for a public inquiry into the matter.

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The Auditor General for Scotland, Caroline Gardner, pictured above, said: “We have continued to monitor events since the annual audit report was issued and will be taking a close interest in the NHS safety review’s findings and KPMG’s report on the governance of the project.”

The report also said other problems had been identified and formal assurances sought over “key issues”, adding: “For example, given recent issues experienced at Queen Elizabeth University Hospital in Glasgow, NHS Lothian requested assurances regarding the cladding on the new hospital.”

Scottish Labour health spokeswoman Monica Lennon, who has previously called for a public inquiry into the scandal, said the report raises more questions than answers.

“The government has clearly known for some time about the serious issues around governance and problems with the progress of the contract for the new Sick Kids hospital Edinburgh,” she said.

“With the publication of this report, it begs the questions of why the Health Secretary hasn’t previously mentioned it and how the situation has been allowed to progress to this stage. We are learning more about this scandal by the day and events have now moved on even from when this audit report was signed off earlier in the summer.

“Concerns raised by trade union officials that the new Edinburgh Sick Kids could be ripped down before it even opens are unthinkable and a public inquiry must get under way.”

A Scottish Government spokeswoman said: "As part of this year's audit, Audit Scotland commissioned Scott-Moncrieff to carry out a high-level review looking specifically at arrangements around the settlement agreement between NHS Lothian and the contractor.

"The report notes that NHS Lothian sought professional advice and provided evidence of detailed evaluation of the available options before proceeding with the settlement agreement and that provision of a safe facility remained the board's priority at all times.

"The results of this review will be considered as part of the independent audit of the overall governance arrangements for the new hospital that KPMG are conducting, at the Cabinet Secretary's request, to provide an external and impartial assessment of the factors leading to the delay."

Susan Goldsmith, NHS Lothian finance director, welcomed the report, adding: "It reviewed the settlement agreement between NHSL and IHSL and considered the project governance and value for money.

"The report highlights that NHS Lothian provided evidence of detailed evaluation of the qualitative and quantitative options available to it before proceeding with the settlement.

"It also shows that the board sought technical advice and expertise throughout the project to ensure the safety of patients, staff and visitors remained the priority throughout."