PFI HOSPITALS
Planning early for a smooth handback process
Over the next 3-4 years, a number of the earlier hospital PFI projects will come to an end, and in the next two decades, a significant further tranche will reach ‘handback’ stage. NHS Trusts with PFI-funded buildings have been advised to start preparing early – particularly by ensuring they have a clear picture of the condition of the assets soon to return to their ownership, and getting any significant defects addressed now. HEJ editor, Jonathan Baillie, met by ‘Teams’ with Ian Daccus, Estates and Facilities Strategic Partnership director at Capita, to get his ‘take’ on the ensuing challenges and opportunities.
Opinions on the degree of success of the PFI funding model for hospitals and other healthcare facilities have always tended to be pretty polarised – with critics citing increasingly fractious relationships between PFI consortia / projectcos and their NHS counterparts, and difficulties in getting even basic maintenance or repairs undertaken without time-consuming and laborious contract variations. In PFI’s earlier days the funding consortia were also sometimes accused of profiteering. Advocates of PFI argue, however, that without its emergence in 1992 during John Major’s Conservative Government, many badly-needed new NHS hospitals would never have been built. Whatever one’s standpoint, over the next 15-20 years many healthcare PFI contracts (the average term is around 31 years) will end, and the built assets funded built, operated, and maintained via private finance will revert to Trust ownership. Many healthcare PFI contracts – and especially those drawn up in the earlier days – were complex. This necessitated the recruitment of specialist teams, both in-house at NHS Trusts, and at PFI consortia, to ensure an equitable agreement that would be workable over, typically, a 30-year lifetime, and, crucially, ensure that the built assets would be handed back in excellent condition.
Extensive experience in PFI Ian Daccus, who I recently spoke to by ‘Teams’, has extensive PFI experience – having for instance, being involved in the University Hospitals Birmingham PFI scheme in 2006. With a sizeable tranche of PFI handbacks now looming, I was keen to find out from him what he feels
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Ian Daccus said: “The contract is designed within the PFI schedules for all of that responsibility to sit with the consortia.”
will be the biggest associated challenges, and indeed opportunities, for both NHS Trusts with PFI-funded buildings, and the private sector consortia. How prepared, for example, does he believe Trusts with PFI estate are to address potentially unprecedented issues following handback. What follows is a Q&A-style report on an interesting 45-minute discussion with him.
JB: “Ian, can you firstly tell me a little about your own professional background and experience of PFI?” ID: “I worked in the NHS for nearly four decades – having started as a trainee with the old regional office at Cumberland
House as part of the National Programme for Training, primarily at Selly Oak Hospital, which developed into University Hospital Birmingham. My experience in PFI in particular was on the PFI project there. As part of the multidisciplinary Trust PFI team, I led on the contract schedules relating to all of the services and management of the hospital during its operation – to help the Trust team take the contract to financial close in 2006. The PFI, valued at about £550 m, was one of the last two large schemes in the second round. After that, more of the schemes were valued at under £300 m, and diminishing. So, my experience primarily involved looking at the contracting schedules for Estates & Facilities activity, and all the performance metrics around ongoing contract management.”
The pre-handback process really does require the Trust to lift all those lids, and indeed any they may not have thought of – including the construction elements and standards
JB: “What about your current role?” ID: “Today I’m the Partnership director for Capita Estates and Facilities, working in the NHS. I’m also Chair for HefmA London and South-East coast.
June 2024 Health Estate Journal 33
AdobeStock / ronstik
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