FINANCIAL Secretary Mr Hamish Macleod's allocation of $1.1 billion for the construction of a new hospital to meet the needs of the northern New Territories will come as no surprise to those familiar with the area. The district has grown so quickly that its population has swollen to 200,000. Unfortunately, the standard of medical services has not kept up with demand so that residents needing medical care have to travel to hospitals in Fanling, Tuen Mun or Sha Tin depending on where they live. Yesterday, legislators quite rightly expressed concern over the cost of the project. While $1.1 billion may seem enough to build a hospital, the memory of the massive cost overrun on the third university is still fresh in the minds of many. It would be unthinkable to allow a repeat of the cost blowout that resulted in the price of the University of Science and Technology almost doubling from $1.9 billion in 1988 to $3.55 billion within a few years. Legislators will need to be vigilant to ensure that taxpayers' money is not being squandered and that the Government has learned from the third university cost fiasco. Building a hospital is one thing. Staffing it is quite another, as residents of Hongkong Island's Eastern District know full well. The hospital that was built especially to cater to their needs today remains empty and unused. Until the first stage of Chai Wan's Pamela Youde hospital finally opens in October - one year behind schedule - the 600,000 people living in the district must either make do with the Chai Wan Health Centre or journey to the Queen Mary Hospital on the other side of the island in Pokfulam. The delay, according to representatives of the nursing profession, is due to the chronic shortage of nurses. Hundreds more beds remain unused in Tuen Mun hospital and Sha Tin for similar reasons. Yet even before the Hospital Authority has fully taken possession of the building from the Architectural Services Department, Mr Macleod is handing out funds for another new hospital at the other end of the territory. Professional staff and bemused citizens may well ask where the Hospital Authority will find the nurses to staff all these medical facilities. Two years ago, the territory's health care services were estimated to have a shortage of 3,700 nurses with Government projecting a shortfall of up to 6,000 by 1995. How then, does the Hospital Authority expect to cope with either Mr Macleod's latest gift to the north district or the Governor's promise of an additional 4,200 beds by 1997? The Hospital Authority declines to talk in terms of quantifiable staff shortages. For the first time in some years, it claims to have more recruits than those leaving the profession. It is confident that if the present trend continues, it will be able tomeet the staffing requirements of each new service and hospital ward that comes on stream. It now has about 16,500 nursing staff for 22,000 beds and expects to meet its target of recruiting an additional 480 nurses this year for a total of 950 new beds. Such figures are heartening but not entirely reassuring. The official justification for the spare capacity at Tuen Mun and elsewhere is the need to plan ahead for future population expansion in the new towns. The sad truth remains that expansion is planned around nursing staff levels, not demographics. The Secretary for Health and Welfare admitted as much as far back as October 1991, when she told the Legislative Council that Tuen Mun hospital would not come into full operation until mid-1993, six months later than expected because of a ''pronounced'' staff shortage. Although recruitment is up and wastage has stabilised since the Hospital Authority took over the running of government and subvented hospitals, officials are acutely aware that the phenomenon may be temporary. A third of the 630 or so nursing graduates were returning from overseas with higher qualifications. However, that source could easily dry up if the recession eases in the West. Although there was an increase in 600 nurses, the number leaving was far higher at 928, a trend that is worrying. The Hospital Authority's current nursing review and its attempts to make nursing a more attractive career are a step in the right direction as are the Government's undertaking to set up an inter-departmental working group to follow up on the review once its findings are presented late next month. However, if the Hospital Authority spent less energy papering over its problems and put more into winning public and professional support for its attempts at reform, the Government might be readier to provide the resources it needs to attract, train and retain more and better qualified staff.