Plans to build a replacement for Edinburgh’s Royal Hospital for Sick Children (RHSC ) and Department of Clinical Neurosciences (DCN) have been approved, it was confirmed today.

The outline business case sets out NHS Lothian’s vision for the new facility next to the Royal Infirmary of Edinburgh at Little France.

The building will provide a replacement for the current children’s hospital at Sciennes, the Department of Clinical Neurosciences currently based at the Western General Hospital and new facilities for the Child and Adolescent Mental Health Service (CAMHS) which will move from the Royal Edinburgh Hospital.

The project is due to be completed in 2017 and is part of the NPD and hub initiative pipeline, supported by the Scottish Futures Trust, which will see £750 million of investment in health facilities across Scotland.

Negotiations over the site for the new building, currently car park B at the Royal Infirmary of Edinburgh, have delayed the project but these were completed in August. Approval of the outline business case will see NHS Lothian take the next step in the process to select a private sector partner to design, build, finance and maintain the new facility.

Health Secretary Alex Neil made the announcement as he met young patients and staff at the current Royal Hospital for Sick Children.

He also confirmed his commitment to investing over £1billion in NHS Scotland capital projects over the next two years, including £485m in 2013-14. This funding is set to benefit the economy and boost jobs across Scotland.

Mr Neil said:

“I am pleased to say that the outline business case for the new RHSC and DCN has been approved meaning work to get the new hospital up and running for 2017 can move apace.

“There have been delays with the new Sick Kids Hospital in the past, due to land and commercial issues with an inherited PFI contract on the proposed site. I am pleased to say that there is now a framework in place to resolve the legal and commercial issues that arose in the original contract.

“This project is part of a £750 million health pipeline delivering a range of improvements to hospital and community health facilities right across Scotland.

“We have already seen £1bn being pumped into our hospitals and health centres since 2011 and I can confirm that another £1bn will be invested over the next two years. In 2013 alone we will invest nearly £500m.

“I’ve been clear in the past that investing in our infrastructure is vital to growing our economy and the NHS presents huge opportunities to do this. Not only will it bring benefits to business and more jobs but it also means that patients can be treated in the best possible surroundings.

“High quality health services as close to home as possible is what the people of Scotland want, and that is something this Government is determined to give them.”

Dr Charles Winstanley, Chair of NHS Lothian said:

“Having the outline business case approved is a significant step forward in this important project.

“The benefits of having children’s, maternity and adult services on the same site are well documented. This project to re-provide services from the RHSC and DCN will create a centre of excellence at Little France, bringing paediatric care, specialist neonatal care, neurosciences and A&E together. The proximity to the University and the BioQuarter will also improve opportunities for partnership working and bring research to the bedside.

“We are working closely with the Scottish Futures Trust to plan the procurement process and, as required, we expect to advertise the project in the Official Journal of the European Union before the end of the year.”

Alison Johnstone, Green MSP for Lothian, also welcomed today’s announcement by the Scottish Government about the replacement hospital.

Alison said:

“A new Sick Kids is long overdue and the minister must ensure the project comes in on time and budget.

“I’d also urge the Scottish Government and NHS Lothian to think carefully about what happens to the existing site at Sciennes. Tempting as it might be to flog off this prime public asset to a private developer, the needs of the community must be considered. The neighbouring Primary School is bursting at the seams and the community has no communal space or facility.

“A modern hospital for our children is to be warmly welcomed but we must ensure we make the most of the space it vacates in such a densely populated neighbourhood.”