Increased construction costs, supply chain issues, the effects of the coronavirus pandemic and late changes to design are all being blamed for the overspend.
Tynwald had previously approved funding £12.557m for the Summerhill View care home in Victoria Road, Douglas.
But Health and Social Care Minister Lawrie Hooper will this month seek Tynwald approval for extra funding of £2.333m from the capital financing reserve to complete the scheme, taking the new forecast price to around £14.9m. Summerhill View will provide a 60-bed residential facility and day care centre to replace Reayrt ny Baie, a facility that is no longer deemed fit for purpose.
The £12.557m budget had been subject to two prior Treasury-approved changes.
First was for the removal of a £500,000 allowance designated for ‘green energy’ efficiencies which at a late stage of project design could not be included.
The second was an increase of £515,000 concerning Covid and inflationary related costs.
These took the revised budget to £12.572m - £2.333m below the new cost forecast of £14.905m.
Among the most significant changes that have contributed to the bill spiraling are increased construction costs of over £2m and challenges within the building material supply chain resulting from the ongoing impact of Covid-19 and inflationary pressures.
Mr Hooper will also tell Tynwald that design changes instructed at a late stage have resulted in contractual compensation events.
There has also been a failure of a key product component resulting in the scheme being prolonged.
Additional professional fees resulted from the project over-running however, to reduce this consultants only worked on an ‘as needed’ basis.
Originally, much of the post-contract furniture and fittings were to be transferred from Reayrt ny Baie.
However, as that facility will now remain open beyond Summerhill View’s launch to enable residents to be safely moved, this won’t happen.
In addition much of this equipment is now deemed close to the end of its life.
The Department of Health and Social Care (DHSC) and Manx Care expect the handover of Summerhill View to be completed in spring of this year but no firm date for opening has been confirmed.
Originally it was hoped that the home would be fully staffed by Manx Care.
But as Summerhill View will requires many more staff than Reayrt ny Baie, with four 15-bed units, and en-suites for each resident, Manx Care is investigating the feasibility of commissioning an independent provider to staff and operate the home on its behalf.
It is expected that the process of commissioning a third party provider could take up to 12 months.
The healthcare provider said that 'the goal is to explore the opening of two of the four units in this new state-of-the-art building to accommodate some of the residents from Reayrt ny Baie by the end of 2024.'