IHEEM PAST-PRESIDENTS’ ROUNDTABLE – PART TWO
it’s not just about the hospital, it’s about all the efficiency within it – the way it’s laid out, with A & E next to Diagnostic Imaging, Diagnostic Imaging next to High Dependency, and with the way that HDU, ICU, and all of the wards ‘flow’. The distance from the acute wards to the theatres is very short.
Rambling facilities GM: (continued) “In contrast, I remember my hometown hospital in Halifax. You had a series of lines to follow to get around an old rambling estate. I remember being trolleyed down from A&E when I injured myself, and it must have taken 20 minutes to get to X-ray with a porter, and then I had to wait on on a very cold, draughty corridor for an X-ray to come back. In most new PFI hospitals, the X-ray department is part of the A&E, so that part of it has absolutely worked. However, I feel we didn’t always capture lessons learnt from the earlier builds and replicate them. Some of the companies did, but didn’t then work with each other to share good learnings, because they were all looking for competitive advantage.
“I think with the later PFIs there was such a squeeze on money, that that’s where some of the risks emerged. It’s the age-old thing – from the trio of quality, time, and cost, you can only ever have two out of three. The early PFIs, in my view, entailed very generous financial rewards for the funders. With those in the ‘middle’ there was a better balance, while the latter ones probably veered too much towards affordability, and when you ‘value engineer’ something, you tend to only get out what you put in.”
Construction ‘issues’ PS: “From my perspective – in terms of a vehicle to modernise the estate – I’d say PFI was a good thing. Where it failed, however – and you can still read about this in the papers regularly – was on the financial model.” GM: “I think the basic rule is that the costs of a typical PFI increase by RPI every year, but the NHS is faced with cost
Pete Sellars in discussion with IHEEM’s oldest living Past-President, Lawrence Turner.
improvement programmes to reduce the impact of RPI and even make it a negative. That flexibility has gone from the Trusts in PFI contracts. It’s also the rigidity of the original agreement, often set in stone for 25-30 years. If you look at the design, it’s a 30-year life. How can you be so rigid with a financial arrangement for 30 years?” PS: “The way some contracts were set up has seen some of the unitary charges double in 10 years, which is not sustainable to either the NHS or the taxpayer. That’s the bottom line.” JB: “What do you think about PFI, Lawrence?” LT:“It certainly saw a lot of new hospitals built. For Static Systems it was very successful, but it was also a steep learning curve. A lot of risk and responsibility is passed on to suppliers, not just during the design and construction phase, but also beyond, with ongoing maintenance and support. It’s about the longevity of equipment and the ability of the supplier to provide service and support over many years.”
A need for the NHS to ‘look inwardly’ PS: “I think the NHS needs to look inwardly at what it did with PFI. In quite a lot of cases we created a lot of extra capacity, but we didn’t simultaneously disinvest
from our old estate – one of the legacy problems today, and that’s why we’ve got such a huge backlog, and some high operating costs. It’s a bit like a motorway, isn’t it? – put an extra lane in and it’ll get filled up. Nobody effectively managed the disinvestment.” GM: “I wasn’t there when Swindon’s Great Western Hospital opened, but I remember some of the statistics. I think, for example, that the portering journey was reduced by something like 80% between departments compared with the predecessor facility, the Princess Margaret Hospital, because of the adjacency design; you typically can’t do that in an existing building. I would also suggest that the whole compliance agenda started from PFIs. You had to prove compliance with the contract, and that was the most difficult thing with the TUPE-transferred workforce from the NHS; they got on and did the job but didn’t record things. The paperwork became secondary. It subsequently became important in PFI because you had to prove to the PFI provider and the Trust that the facility was being well managed and well maintained – since that is what they were paying for. I think that’s the bit that’s actually driven up standards across the NHS. Then the regulatory frameworks came through to expect exactly the same. I think that’s a big positive.
Single-digit profits GM: (continued) “From my experience, when you’re in a PFI contract you don’t see yourself as a PFI contractor. You still feel you are the maintenance department providing a service to the hospital, and, as such, the community. Finances don’t come into it day to day. I appreciate there’s the business case because none of the PFI providers were in it altruistically; they all had a profit to make. Most, however, were only making single digit profits, and that’s not an unreasonable return on that kind of risk.” PS: “I feel that if you transfer risk to someone else, you have to pay for that. I believe one of the financial difficulties the
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www.haigh.co.uk June 2018 Health Estate Journal 21
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