❓ Opposition questions the Health Minister regarding the Serco contract for Fiona Stanley Hospital, specifically concerning fixed costs and government responsibility for delays. The Minister's response is vague, promising future cost announcements after negotiations with Serco.
AnsweredQoN 242Legislative Assembly
QuestionView source ↗
FIONA
STANLEY HOSPITAL — SERCO CONTRACT
242. Mr R.H. COOK to the Minister for Health:
I refer to the minister's claim yesterday that it is
up to Serco to mitigate the cost of any delays at Fiona Stanley Hospital and
compare this claim to the advice provided to the Public Accounts Committee by
the director general of health.
(1) Can the
minister confirm that 87 per cent of the contract with Serco is a fixed component?
(2) Can the
minister also confirm that clause 16.5 of the ''Facilities Management
Services Contract'' states that the government is responsible for
reimbursing Serco for its unavoidable fixed direct costs of any delay in the
commencement date of the hospital?
(3) Can the
minister today tell the Parliament what he has been advised by the department
in relation to the estimated cost per day of any delay in opening the hospital?
STANLEY HOSPITAL — SERCO CONTRACT
242. Mr R.H. COOK to the Minister for Health:
I refer to the minister's claim yesterday that it is
up to Serco to mitigate the cost of any delays at Fiona Stanley Hospital and
compare this claim to the advice provided to the Public Accounts Committee by
the director general of health.
(1) Can the
minister confirm that 87 per cent of the contract with Serco is a fixed component?
(2) Can the
minister also confirm that clause 16.5 of the ''Facilities Management
Services Contract'' states that the government is responsible for
reimbursing Serco for its unavoidable fixed direct costs of any delay in the
commencement date of the hospital?
(3) Can the
minister today tell the Parliament what he has been advised by the department
in relation to the estimated cost per day of any delay in opening the hospital?
AnswerView source ↗
At the end of question time I was going to provide a further
explanation of the earlier questions asked by the Deputy Leader of the
Opposition. With your indulgence, Mr Speaker, I will do that at the start.
There was some concern that I said there were 20 beds plus
four swing beds. The report that the Deputy Leader of the Opposition referred
to said there were 23 beds. The figure of 23 beds was taken on the day the
question was asked. On that day, 20 beds plus three of the four swing beds were
in use, hence the figure 23, so my advice was correct.
(1)–(3) I
am advised by the Department of Health and our staff involved in developing,
signing and managing the contract with Serco that there is a mitigation clause
in the contract that allows us to negotiate with the company to offset all the
costs associated with the creation of that service. That is the contract. We
have had verbal discussions with senior people in Serco who accept that that is
the case and they are more than happy to cooperate in working out how we deal
with the costs. As I said, there may be some costs that are unavoidable, but a
large percentage of the costs are for the staff for the hospital. Some costs
are capital costs and there may be a relationship between the capital costs
that have been expended and some costs that we need to provide remittance for,
but there are other mechanisms for doing that, including in the terms of the
contract. We will sit down with senior staff and initiate those discussions. At
the end of the day, we will be announcing to the public exactly what the costs
are as a result of the six-month delay in the start of the contract.
explanation of the earlier questions asked by the Deputy Leader of the
Opposition. With your indulgence, Mr Speaker, I will do that at the start.
There was some concern that I said there were 20 beds plus
four swing beds. The report that the Deputy Leader of the Opposition referred
to said there were 23 beds. The figure of 23 beds was taken on the day the
question was asked. On that day, 20 beds plus three of the four swing beds were
in use, hence the figure 23, so my advice was correct.
(1)–(3) I
am advised by the Department of Health and our staff involved in developing,
signing and managing the contract with Serco that there is a mitigation clause
in the contract that allows us to negotiate with the company to offset all the
costs associated with the creation of that service. That is the contract. We
have had verbal discussions with senior people in Serco who accept that that is
the case and they are more than happy to cooperate in working out how we deal
with the costs. As I said, there may be some costs that are unavoidable, but a
large percentage of the costs are for the staff for the hospital. Some costs
are capital costs and there may be a relationship between the capital costs
that have been expended and some costs that we need to provide remittance for,
but there are other mechanisms for doing that, including in the terms of the
contract. We will sit down with senior staff and initiate those discussions. At
the end of the day, we will be announcing to the public exactly what the costs
are as a result of the six-month delay in the start of the contract.
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