National Dunedin list MP Michael Woodhouse said it was deeply disappointing the interprofessional learning centre (ILC) planned as part of the new hospital complex had been put on hold indefinitely.
Earlier this month it was announced the project, a collaboration between Te Whatu Ora Health New Zealand (HNZ), the University of Otago and Otago Polytechnic, now Te Pūkenga, would not go ahead.
Different stories have emerged about the cause of the decision.
The university has emphasised all three partners are under financial pressure, but HNZ has not cited its own finances as a factor, although calling it a combined decision.
Mr Woodhouse said this was an attempt to deflect responsibility that ultimately landed with the Government.
"The Government can’t avoid responsibility for this being put on ice, because after all they fund both Te Pūkenga and Otago University, and their financial situation is therefore directly linked to the decisions that Government make that has led to that financially strained position," he said.
The projected cost of the ILC had spiked from an estimated $50 million in 2020, to more than $130 million, a statement by the three partners announcing the decision said.
Yesterday, Dunedin Hospital local advisory group and ILC steering group chairman Pete Hodgson stressed the responsibility of the university and Te Pūkenga.
"The construction costs rose dramatically, and both Te Pūkenga and the university are facing a revenue cliff.
"Those few commentators who want to proceed anyway need to confront reality.
"The cost had become excessive, and the funding was no longer available."
Mr Hodgson said the university and Te Pūkenga needed to decide whether they would be part of a future project, as otherwise the Government would spend the $17 million on a PDU "somewhere" and they would effectively be shut out of the new hospital campus for some time.
This follows earlier comment from Health Minister Ayesha Verrall that the Government’s allocation of $17 million remained "should the views of support partners change".
Asked if this meant the decision was driven by the university and Te Pūkenga, she said it was a joint decision made by the three partners, supported by the Tertiary Education Commission.
Earlier this month acting vice-chancellor Prof Helen Nicholson said it was not a university-led decision, but rather a combined one.
"All three partners in this development are facing significant financial pressure," she said.
At a staff meeting on Monday, Prof Nicholson said the ILC had been put on hold, and HNZ and Te Pūkenga did not have the funding to carry on.
"We will still be pushing forward to develop more into professional learning ... but we will not be building in a new building in the next probably five years."
Te Pūkenga and HNZ have also said their commitment to interprofessional education remains despite the situation.
Mr Woodhouse said the biggest cost pressure on the project was delay, and the rising costs had been known for some time.
As reported by the Otago Daily Times in 2021, the approximate cost for the build according to a Cabinet paper was $51 million.
However, by last August the price tag had jumped to $115.5 million, and the proposed size of the building had also increased.
Mr Woodhouse said the hospital "should have been sufficiently designed so as to cost it properly" and the Government needed to have a more definite commitment to the project.
