PFI HOSPITALS
The Bexley Wing (above left) – home to the Leeds Cancer Centre at St James’s Hospital in Leeds, and Wharfedale Hospital in Otley (right) – both good examples of England’s many healthcare PFI projects.
in staff and major contracts. I would therefore suggest we do have that level of embedded experience. In addition, while we have the challenge of this, the benefit of the TUPE transfer of all the staff currently in the consortium helps retain the corporate memory and resource. Those individuals that are 50% or more dedicated to their role should be coming with the PFI handback. “As there’s a significant HR TUPE
transfer, and a substantial contracting and asset transfer element to the handback of a PFI – which in some Trusts, could be heading towards 1000 staff – everybody really needs to start thinking about those plans a number of years before the PFI closes.”
JB: “Do you think the handback situation presents a good opportunity to assess and upgrade assets to meet current building regulations and sustainability guidance etc?” ID: “The PFI should be operating to, and the facility should be built to, the required standards, so ideally there shouldn’t be a need for much improvement work. What the handback may afford is an opportunity for a more cost-effective way to make some alterations that perhaps weren’t affordable with the PFI in a consortium arrangement. So, I think that will be another advantage in the future; once the assets have come back into the Trust ownership the cost of alterations may be more affordable. The price the Trust pays for that, however, is its ability to then manage and maintain the building(s)at the required standard, and keep it that way. That’s partly why it’s so expensive to operate PFIs now – because the Unitary Payment also includes keeping it at that standard.”
JB: “The National Audit Office has talked about ‘opportunities for collaboration between the public and private sectors to develop innovative handback solutions and service delivery models’. Do you think that there’s evidence of that?”
ID: Absolutely. Several Trusts have now taken back their in-house services, while some are looking at taking them back, and outsourcing them. I think that’s one area where numerous combinations will come to the fore and work quite well. I believe the Trusts are quite capable; the Estates and Facilities community has developed a whole range of excellent solutions using outsourced and ‘insourced’ services, as well as partnerships – with numerous frameworks now available, and in regular use. The expertise on the NHS side is excellent. It’s the capacity that’s the challenge.”
JB: “The NAO has said it ‘recognises the need for early and open engagement and communication and collaboration with all stakeholders – public sector, private sector consultants, surveyors, etc, in fostering transparency, building trust, and facilitating early identification and resolution of potential issues’. Has there been a good deal of positive engagement and openness between the various parties in some of the PFI contracts?” ID: “As far as I’m aware there’s been excellent communication on all PFIs through their joint performance management; where the level of ‘issues’ gets a little bit challenging and litigious is the concern. With the Trusts that our Capita forensic teams have worked with, that has been part of the process to survey to, with a view to assessing whether there are any issues, and having that open book / open door approach. Unfortunately, they’ve found repeatedly that there are problems that weren’t previously known, and needed to be resolved.”
JB: “How receptive are PFI consortia to forensic surveyors coming in? Presumably if the Trust wants them to do it, then they have to be open to it?” ID: “There are mechanisms within the contract to allow Trusts to conduct surveys with external parties to ascertain building conditions etc. Generally, where
the subject has been broached, it’s been allowed, and understandably there have been concerns. It’s fair to say that our Capita forensic team will only work for the NHS client side. If there are concerns on the consortia side that these surveys could identify problems, then that level of survey and inspection might not be welcomed. However, then you would ask yourself: ‘Why would that be the case?’”
JB: “PFI, as a funding model, has clearly had its pros and cons, but do you think there will be a successor emerging any time soon? Do you think there’ll be another model like it in the near future?” ID: “I think it’s the financial conditions that make it a challenge; not the market – which I think would welcome a new version in terms of construction. While the New Hospital Programme is most welcome, it’s not going to provide new hospitals fast enough or in the right volume for the needs of the hospital replacement programme. We do need a future alternative. I think the challenge will be the financial accounting treatment, and in particular, the capital limits and allowances for these sorts of costs. Having these within NHS Trusts’ annual accounts does set a challenge and limits for them to be managed effectively. “I’d suggest the solution is to develop
a countrywide full hospital lifetime replacement programme. It wouldn’t be that difficult to develop a 40-year programme of replacement, and to start to work on that alongside backlog and other investment plans. We need that alongside regional, into borough-based plans. ICBs arguably shouldn’t manage a national NHP programme; this is where regional teams could innovate and resource up and help deliver. To deliver that we need a structural reform of NHS estate management and major capital. This could be best delivered with a move somewhere back towards regional teams delivering major projects across larger areas, well-resourced and co- ordinated for a longer time period than is integral to ICBs and Trusts.”
June 2024 Health Estate Journal 37
Leeds Teaching Hospitals NHS Trust
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