THE cost of redeveloping Townlands Hospital in Henley could rise by another £2 million.
The £8.7 million “health campus” could be liable to VAT because NHS Property Services, which is now responsible for the project, is a private limited company.
The revelation comes just two months before the redevelopment is supposed to be given final approval.
It is just the latest snag to hit the project, which has now been delayed by a total of more than three years from the original completion date.
Now there are fears there could be another delay as five issues, not including the VAT, that were scheduled to be resolved by the end of last year are still outstanding.
Ian Reissmann, chairman of the Townlands Steering Group, said he was particularly concerned about the threat of a VAT bill.
“It is potentially very serious news because 20 per cent of a project of this size is a lot of money,” he said.
“We have made it quite clear that this issue needs to be resolved, or at least a clear plan of resolving it should be found. If the issue remains unresolved then it is a major risk to the project.”
Harold Caldwell, the interim area manager for NHS Property Services who is in charge of the project, raised the VAT issue at a meeting with the steering group last week.
Cllr Reissmann said: “It was the first that we had heard of it as a potential problem and it may take a few months to resolve. The real risk here is that the affordabilty of the project comes into doubt.”
The group hopes the company will come to an agreement with HM Revenue and Customs or the shortfall could be funded from the surplus created by the rebate to the Department of Health from the sale of the land.
A spokesman for NHS Property Services confirmed the VAT arrangements were “yet to determined”.
“This is a decision that would not be taken until its completion,” he said. “We would, of course, only act according to the VAT regulations determined by HM Revenue and Customs and it should be noted also that tenants may be able to recover VAT payments, again within HMRC rules.”
Cllr Reissman said the steering group remained “fairly confident” that the latest plans would remain on schedule.
“Harold made it clear that although the project plan is achievable, there is always the unknown factor,” he said.
“The steering group knows a lot more and there is a greater sense of confidence in the project than, say, a couple of months ago when we knew very little.”
A public meeting due to be held on Wednesday was postponed until Wednesday next week to allow more talks to take place between care providers.
Mr Caldwell and representatives from the county council, Sue Ryder and South Oxfordshire District Council will attend the meeting, which will take place in the town hall from 7.30pm.
Progress made this week includes the approval of the nursing home development, which can now be signed off by the Oxfordshire County Council.
Cllr Reissman said: “The final plans have been received from the developer and each of the parts is now being discussed with each of the parties involved.
“We wouldn’t have been able to get all the information we wanted to people this week so we felt that a meeting next week would be more beneficial because there can be more detail about what’s been agreed.”
Meanwhile, Henley MP John Howell has urged health secretary Jeremey Hunt to speed up the Townlands project during the health question time in the House of Commons on Tuesday.
He said: “One of the principal ways of promoting the health and wellbeing of older people in my constituency would be a rapid sign-off for the rebuild of the Townlands hospital complex.
“I recognise that the decision lies with NHS Property Services, but will the Secretary of State join me in using whatever influence we have to put pressure on it to get a move on?”
Mr Hunt said the under-secretary of state for health had agreed to “do all we can to speed it along”. He added that the scheme “sounds excellent”.