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									CHAPTER 12 -CAPITAL INVESTMENT AND INFRASTRUCTURE


SUMMARY



The Health and Social Services occupies an extensive estate. The total
floor area is 1.6 million square metres, with 1600 blocks of buildings.
The total area of land is estimated at 1.2 million hectares. Equipment
ranges from major diagnostic and medical items, including linear
accelerators, imaging equipment and sophisticated laboratory analysers
to high volume smaller items including beds and simple diagnostic
equipment for use in wards.


Information and Communication Technology (ICT) covers all the
computers and network cabling (known as hardware) and the programs
that make computers and communications function (known as
software). Areas that have ICT systems include: finance; supplies;
personnel; payroll; patient administration; pathology; radiology;
clinical specialties; population screening; population indices; and family
practitioner payment systems.


Needs Issues
   • Much of the estate is outdated, in poor condition and badly
      located for modern health and social care.
   • The total amount of funding needed to bring the HPSS estate fully
      up to an acceptable standard of performance and physical
      condition, to replace obsolete equipment and ICT systems, and to


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      create new or replacement facilities compatible with modern day
      standards of health care, is estimated to be in the order of £1.9bn.
   • Significant backlogs of essential estate upgrading and replacement
      of critical diagnostic and medical equipment and ICT systems
      have accumulated. The present estimates are over £1800m for
      estate work, £37m for replacement of imaging and laboratory
      equipment over 10 years old and over £30m for replacement of
      existing outdated ICT systems.


Effectiveness Issues
   • The capital baseline, excluding non-recurring and other in-year
      additions for specific purposes, is in the range of £45-50m per
      year. Capital projects valued at over £25m have been procured
      under PFI public-private partnerships and further projects with
      an estimated capital value of over £100m are under consideration.
   • Rigorous arrangements are in place for appraisal, procurement
      and management of capital projects. Available resources
      including income from disposal of surplus land and property are
      used effectively.
   • In the NHS in England an increase of approximately 13% in cost
      allowances has recently been approved to provide the higher
      standards of accommodation required for modern health services.
      Unless there is a similar initiative in NI, the Department will not
      be able to achieve comparable standards in the HPSS.




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12.1          INTRODUCTION


12.1.1 The three key components of the Health and Personal Social
Services (HPSS) infrastructure are the estate, equipment and Information
and Communications Technology (ICT). The arrangements for the
application, control and management of capital resources are explained. A
significant investment deficit is identified, arising from an inability to invest
adequately in modernisation of building stock, infrastructure and renewal of
equipment. The scope and position in NI are dealt with separately for each
of the three areas, and then other issues are dealt with in a combined section
at the end.


ESTATE


12.2          SCOPE


12.2.1 The HPSS estate consists of a diverse range of facilities including
major hospital complexes, local hospitals, residential accommodation, day-
centres, health clinics, administrative buildings and staff residences. The
total floor area is 1.6 million square metres, with 1600 blocks of buildings.
The total area of land is estimated at 1.2 million hectares.


12.3          POSITION IN NI

Estate Condition


12.3.1 The buildings in the HPSS Estate are assessed within conditions based
on a set of criteria developed for the NHS. These are:-

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Condition A: the building is as new and can be expected to perform
adequately to its full normal life.


Condition B: the building is sound, operationally safe and exhibits only
minor deterioration.


Condition C: the building is operational, but significant repairs or other
works are required.


Condition CX: the building is operational but falls below Condition B. The
works to improve it are either impractical or uneconomical.


Condition D: the building falls significantly below Condition B, and major
repairs or other works are required to remove unacceptable risks of
breakdown.

Condition DX: the building falls significantly below Condition B, and the
repairs or other works to improve it are either impractical or uneconomical.
There is a serious risk of breakdown.


12.3.2 A systematic analysis of requirements conducted by the
Department’s Health Estates Agency in terms of statutory standards,
physical condition and energy efficiency indicates that overall some £170
million would be required to bring the existing HPSS estate up to
satisfactory standards.




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12.3.3 This backlog takes account of recent investment in major hospital
projects at Altnagelvin, Causeway, Craigavon and the Royal Victoria
Hospital sites. Despite an annual average in the range of £16m - £18m a
year made available for local investment since 1994/95, a persistent backlog
remains.


12.3.4 Annual surveys indicate that a significant proportion of the estate (in
excess of 5%) was assessed as condition DX, i.e. impossible or uneconomic
to improve. The assessment was made in the following aspects: its physical
condition; statutory standards (health and safety, and fire safety); energy
performance; and its functional suitability (i.e. is the space appropriate for
delivery of a particular health care service). It is clear that any underused or
empty estate within the service is unlikely to prove to be of any real benefit
in an age when all HPSS accommodation needs to be designed to meet
specific requirements. Only services that support the care functions, such as
administration, might slot into redundant premises established but the
extremely high backlog is the consequence of inadequate capital having
been available historically, and the pressure of immediate priorities over
long-term estate issues. Pressures on services to provide immediate
treatment and care for people meant that it was not possible to increase the
priority given to capital investment.


12.3.5 Poor estate and old equipment result in inefficient use of resources,
particularly clinical staff, reducing the effectiveness of service. Recruitment
and retention of staff at those hospitals, which are no longer giving a modern
and effective service, is also an issue.



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12.3.6 Recently completed major schemes have made a significant
contribution to the overall standards in building stock. These are very
important improvements, but as a result of the shortfall in funding,
investment in these new facilities means under-investment and consequent
decline in existing estate.


12.3.7 The overall condition and standards in the estate are illustrated in
Figures 12.1 to 12.4. These show the percentage of the estate that is below
standard to a significant degree. The difference in grading from C to DX
reflects only the increasing difficulty in repairing. The range of scoring
from C to DX does not indicate the significance or risk associated with the
deficiencies in the estate.           Information on the extent of the risk is not
collected. These analyses have not changed significantly over the last 10
years.


Fig 12.1                                               Fig 12.2

            Physical Condition                                 Functional Suitability


   60.00%
                                                      60.00%
   50.00%
                                                      50.00%
   40.00%
                                                      40.00%
   30.00%
                                                      30.00%
   20.00%
                                                      20.00%
   10.00%

                                                      10.00%
    0.00%
            A   B   C   CX   D   DX
                                                      0.00%
                                                               A    B    C    CX    D   DX




                                            219
Fig 12.3                                                Fig 12.4


               Statutory Standards
                                                                   Energy

  60.00%
                                               50.00%

  50.00%                                       45.00%

                                               40.00%
  40.00%
                                               35.00%

                                               30.00%
  30.00%
                                               25.00%
  20.00%                                       20.00%

                                               15.00%
  10.00%
                                               10.00%

   0.00%                                       5.00%
           A     B     C    CX       D   DX    0.00%
                                                         A    B     C       CX   D   DX




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Capital Renewal


12.3.8 There are significant strategic problems in terms of the capacity,
location, configuration and modernisation of the estate. Following the
establishment of the NHS in 1948 there followed a programme of major
capital investment in the health service in Northern Ireland. This was
particularly focused on the acute hospital sector. Commencing in the late
1950s and running through to the early seventies, a range of major projects
were planned, designed and constructed at Altnagelvin, Craigavon, the
Ulster Hospital Dundonald, Daisy Hill in Newry and at the Royal Victoria
Hospital. The last in this sequence was the Belfast City Hospital, which
was planned and designed in the 1960s, constructed in the 1970s and opened
significantly behind schedule in the 1980s.


12.3.9 Since then, until relatively recently, the focus of capital investment
was largely on smaller projects on acute hospital sites and community
facilities.


12.3.10The original new hospital buildings are now approaching forty years
of age. The design of many of these now fail to reflect the needs of modern
day acute hospital facilities in relation to current methods of practice, space
standards, accommodating the latest equipment technology and capacity in
key areas such as intensive care. The expectations of patients and staff have
significantly increased in terms of the form and quality of accommodation
within which they are treated or provide treatment.




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12.3.11In recent years new hospital projects have been completed at Antrim
and Coleraine. More recently, major external remedial works have been
carried out at Altnagelvin and Craigavon hospitals, and a major extension at
Altnagelvin and Phase I of the Royal Victoria Hospital Redevelopment have
been completed.


12.3.12Current assessments indicate the need for major projects on all of the
acute hospital sites, which were developed in the 60s and 70s. In all cases,
this will require investment on a major scale, reflecting the second cycle of
major capital development. Without this expenditure, the HPSS will be
unable to deliver services to the standards which are expected, or in the
quantity which is necessary to meet the needs of the population.


Investment Deficit


12.3.13 In connection with the Review of Public-Private Partnerships (PPPs)
and the Private Finance Initiative (PFI), work has recently been carried out
to scope and update estimates of investment needed to bring the estate up to
modern standards. Accommodation needs of the HPSS account for £1.6
billion of the overall estimate of £1.9 billion for estate, equipment and ICT
for the HPSS and Fire Authority.


12.3.14 In addition to the needs of the acute sector there is a considerable
requirement for major investment in the areas of primary care, community
health and social services and mental health. The majority of the community
trusts are currently seeking to rationalise their estates in order to improve
public accessibility and effectiveness in the delivery of a wide range of


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community treatment and care services. The complete investment deficit
analysis is set out in Appendix 12.


EQUIPMENT


12.4 SCOPE


12.4.1 Equipment ranges from major diagnostic and medical items including
linear accelerators, imaging equipment, and sophisticated laboratory
analysers to high volume smaller items including beds and simple diagnostic
equipment for use in wards.


12.4.2 Ageing equipment is progressively more prone to breakdown. Spare
parts for obsolete machines are difficult to obtain. Some older machines
have to be maintained with second-hand parts and repairs inevitably take
longer. The costs of such repairs are a serious drain on revenue budgets.


12.4.3 Continuing use of equipment past normal effective life expectancy is
not value-for-money. Older equipment generally does not offer the full
range of test results or treatment options that are available from current
models. Poor performance and quality, and down time when patients have
to be turned away is inefficient from every perspective. Treatments are
delayed or postponed, and there is a significant impact on clinical staff time.




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12.5 POSITION IN NI


12.5.1 Advances in clinical practice and the need to use new technology
makes it imperative that medical equipment is continuously upgraded and
replaced. In this way, clinical staff time, a scarce resource, is not wasted
because of old equipment inadequacies or failures, and patient care is
delivered speedily, reducing the extensive waiting lists in many service
delivery areas here.


12.5.2 The total replacement value of major equipment items is estimated at
£89m.    A substantial backlog has developed because of the lack of
meaningful investment over past years.      An unacceptable proportion of
equipment is in service beyond its useful life.      An estimated £37m is
required to replace imaging and laboratory equipment items at present in use
and over 10 years old. This estimate increases to £63m if the equipment
replacement cycle is reduced to a maximum of 7 years.


12.5.3 The approach to equipment replacement has been focused on major
items over 10 years old in order to address the most pressing areas of
concern. This however raises a number of issues:


         •    Most equipment now incorporates microprocessors and the
              currency of most computers and their software is 5 years
         •    Equipment is more intensely used than ever before
         •    The availability of spare parts does not extend to 10 years




                                    224
         •    Major advances in equipment specification and performance
              mean that most 10-year old equipment is much less effective
              and efficient than current equipment




12.5.4 Consideration has not been given to the smaller items of equipment,
those under £5000 in value. It is estimated that there is about £100 million
worth of equipment in this category. This would not necessarily be subject
to replacement on the same scale as the major equipment; some would have
a significantly longer life, and other pieces would be regularly replaced from
revenue funds. It appears that there is a current backlog in replacing that
equipment amounting to approximately £10 million.




INFORMATION AND COMMUNICATIONS TECHNOLOGY


12.6 SCOPE


12.6.1 Information and Communication Technology (ICT) covers all the
hardware, software and services required to support all aspects of the HPSS.
It includes a wide range of ICT from large, HPSS-wide systems (finance,
payroll, population screening) down to individual PCs on desks providing
standard office services such as electronic mail and word processing.




                                     225
12.7 POSITION IN NI


12.7.1 A new ICT Strategy for the HPSS was published in July 2002. The
Strategy Vision published in July 2001 is consistent with the aspirations and
targets of the NHS. It describes health and social care supported by
information about services, about an individual’s care, about best practice,
about performance – all securely stored and communicated using ICT, and
accessible to authorised users wherever and whenever it is needed.


12.7.2 Comparing the current situation with the Vision it is clear that there
are very many gaps to be filled.


12.7.3 ICT has become a common business tool, yet in most areas of the
HPSS care professionals do not have access to any ICT services and the core
business of health and social care is still paper-based.


12.7.4 Where ICT has been deployed, most users consider the systems to be
at the end of their useful life and limited in capability, when compared with
ICT services now available and used elsewhere. Provision of information
services for the public, especially electronic information, is very limited.
The draft ICT Strategy that was issued for consultation in July 2002 sets out
a programme of projects that would lead to implementation of a fully ICT-
supported service by 2009/10.


12.7.5 In its simplest form, the Strategy can be regarded as having two major
interlocking themes:



                                      226
       •   Electronic Care Records

       •   Electronic Care Communications


While the strategic emphasis must be on these areas, the need to sustain and
modernise ICT in other areas is also recognised.


Resourcing


12.7.6 The Strategy sets a possible investment scenario that takes into
account the capacity of the HPSS to undertake change and would, if the
investment requirements were met, lead to implementation of the Strategy
Vision within around eight years.


12.7.7 If the additional funding was made available, ICT expenditure in the
HPSS would increase to approximately £30million pa in total (including
staffing and all funding sources). This represents approximately 1.2% of
HPSS revenue.


12.8         POLICY DIFFERENCES


12.8.1 There are no essential policy differences between the NIHPSS and the
NHS in terms of guidance in relation to management of the Estate or the
procedures for the approval and administration of capital expenditure.


12.8.2 Until a few years ago the deployment of ICT in the HPSS was
broadly comparable with most of the NHS. Areas where data processing is a
significant part of the business have ICT systems. These include, for

                                     227
example: finance; supplies; personnel; payroll; patient administration;
pathology; radiology; clinical specialties; population screening; population
indices; and family practitioner payment systems.


12.8.3 More recently, the NHS has significantly increased investment in ICT
to support care professionals at the point of care, and to enable sharing and
communication of care data. Major initiatives are also under way to replace
ageing business systems.


12.8.4 The HPSS has not kept pace with these developments and has now
fallen a considerable way behind the NHS in England, Scotland and Wales,
and the health service in the Republic of Ireland, where new ICT Strategies
and investment programmes are already well established.


12.8.5 The key distinguishing features are the per capita resources available
for capital investment in the health and social services (discussed in Section
12.9), and the delegated limits, reflecting the devolved Regional structures
within the NHS and decentralisation of the capital budget. Local Authorities
in GB have responsibility for capital spending on Personal Social Services.
It is unlikely also that the priorities in England for capital investment exactly
match those in the NIHPSS.


12.9 CONTEXT


12.9.1 Factors including relatively higher deprivation levels and the impact
of civil unrest means that the Service requires greater capacity. NI is more
rural than England and may therefore need a greater number of small


                                      228
buildings, which would be expected to add costs in terms of diseconomies of
scale. Equipment and ICT costs are also likely to be higher for a greater
number of sites.


12.9.2 The demands and expectations of services users are increasingly
driving Estate related issues. Examples are cleanliness in hospitals, cross
infection risks and the removal of mixed sex wards.


12.9.3 Because of historical underfunding, it has not been possible to
maintain adequate investment levels in upkeep and modernisation of a very
large stock of diverse and dispersed facilities. Significant backlogs of Estate
upgrading have therefore built up. The need has also been identified for a
major modernisation programme across a range of facilities including
hospital services, residential children’s homes, learning disability, mental
health and elderly care.


12.9.4 There is a considerable range of operational and other deficiencies
associated with outdated medical and scientific equipment. Service and
maintenance costs increase with continuous, heavy use of ageing diagnostic
and therapeutic items. For major items, beyond a life of 7 years, servicing
costs inevitably increase and replacement parts cease to be guaranteed,
leading to increased downtime and increasing use of components from
decommissioned equipment.

12.9.5 This is critical to the delivery of hospital care. In addition to issues of
nugatory investment, questions of safety, quality of performance and
diagnosis and general efficiency arise. With outdated imaging equipment,


                                       229
patients can be exposed to unsafe levels of ionising radiation. Frequent and
prolonged breakdowns means that, at best, patients are inconvenienced or at
worst denied the standard and quality of treatment to which they are entitled.
In all cases, where equipment more than 5 years old is in service, patients
are denied the benefits of up-to-date technology. This has implications for
waiting lists, and staff resources are under utilised.


12.9.6 ICT develops rapidly and both out-of-date hardware and old versions
of software will no longer be maintained by suppliers. Support for the HPSS
is now so dependent on computers that when there are failures it has a
significant impact on the efficiency of the Service.


12.10 KEY COMPARISONS


12.10.1 In this Section the key issue of resources against the levels of capital
funding available in the NHS is assessed. Local arrangements for the
management of capital and procurement of projects are described, and issues
of the scope for increased investment through disposal of surplus property
and Public-Private Partnerships under the Private Finance Initiative
(PPP/PFI) are considered.




Estate and Equipment


12.10.2 The current level of capital funding has largely remained the same in
cash terms over the last number of years. This has failed to keep pace with



                                       230
construction inflation as shown in Figure 12.5 and represents a reduction
since 1991/92 of some 25%.


12.10.3 The yearly allocation in the range of £45m - £50m has reflected an
historic annual allowance, rather than a figure based on any assessment of
need.    Accordingly, it does not address the major injection of capital
required for the cyclical upgrading/replacement of hospital buildings over
the coming years.


12.10.4 The NHS in England has reported the decision to allocate an annual
capital investment for each of the next five years of £3.1 billion. On a per
capita basis this would be equivalent to approximately £105m/annum in N.
Ireland, almost twice the current baseline level of investment. Even if this
level were achieved, it would fail to recognise the serious under-investment
in NI over recent decades. It also ignores the fact that in England this level
of investment is only for health buildings as opposed to NI, where the capital
allocation has to provide for both health and the full range of social services.
Epidemiological studies of NI indicate a much higher level of ill health and
chronic disease than that experienced in England. Accordingly, greater
capacity in acute and community facilities would be required to achieve the
same level of health provision in NI. Unless there is a significant increase in
the current level of funding it will be impossible to provide a built estate that
satisfactorily meets the stated aspirations for health and social services in
Northern Ireland.




                                      231
                                                                                            Fig 12.5

Capital Investment 1991/92 – 2002/03


                                                CAPITAL INVESTMENT 1991/1992 - 2002/2003
          £80,000,000


          £75,000,000


          £70,000,000                                                                Equivalent funding compared to                        real reduction in
                                                                                     1991/1992 taking account of                           capital funding
          £65,000,000                                                                movements in GDP                                      £29.64M approx.
                                     Equivalent funding compared to                                                                        equal to 39.22%
                                     1991/1992 taking account of
          £60,000,000                construction price inflation
CAPITAL




                                                                                                                                                  real reduction in
          £55,000,000                                                                                                                             capital funding
                                                                                                                                                  £15.96M approx.
                                                                                                                                                  equal to 25.79%
          £50,000,000


          £45,000,000


          £40,000,000
                                                             Actual baseline
                                                             funding (Cash)
          £35,000,000


          £30,000,000
                        1991/1992   1992/1993    1993/1994   1994/1995   1995/1996    1996/1997   1997/1998   1998/1999   1999/2000   2000/2001   2001/2002    2002/2003
                        £45,740,000 £47,956,476 £52,792,423 £55,814,890 £55,814,890 £59,038,855 £61,053,833 £63,874,802 £67,300,264 £70,524,229 £73,345,198 £75,561,674
                        £45,740,000 £35,450,000 £44,019,000 £45,208,000 £44,698,000 £47,632,000 £47,380,000 £45,184,000 £45,184,000 £56,925,000 £41,925,000 £45,925,000
                        £45,740,000 £47,219,822 £48,387,013 £49,028,940 £50,426,007 £52,017,318 £53,620,698 £55,120,059 £56,430,923 £57,468,809 £58,905,530 £61,887,586
                                                                               232
                                                                                     FINANCIAL YEAR
ICT

12.10.5 Until a few years ago the deployment of ICT in the HPSS was
broadly comparable with most of the NHS. Areas where data processing
is a significant part of the business have ICT systems. These include, for
example: finance; supplies; personnel; payroll; patient administration;
pathology; radiology; clinical specialties; population screening;
population indices; and family practitioner payment systems.


12.10.6 More recently, the NHS has significantly increased investment in
ICT to support care professionals at the point of care, and to enable
sharing and communication of care data. Major initiatives are also under
way to replace aging business systems.


12.10.7 The HPSS has not kept pace with these developments and has
now fallen a considerable way behind the NHS in England, Scotland and
Wales, and the health service in the Republic of Ireland, where new ICT
Strategies and investment programmes are already well established.


12.10.8 The ICT Strategy can be regarded as having two major
interlocking themes:


•     Electronic Care Records

•     Electronic Care Communications


12.10.9 While the strategic emphasis must be on these areas, the need to
sustain and modernise ICT in other areas is also recognised. The Strategy
sets a possible investment scenario that takes into account the capacity of
the HPSS to undertake change and would, if the investment requirements

                                    233
were met, lead to implementation of the Strategy Vision within around
eight years. The additional funding required is indicated in Appendix 12.


12.10.10 If this additional funding was made available, ICT expenditure
in the HPSS would increase to approximately £30million pa in total
(including staffing and all funding sources). This represents
approximately 1.2% of HPSS revenue.


12.10.11 There are some key characteristics of ICT in the HPSS that have
enabled efficient and cost-effective deployment of ICT in the past, and
offer particular opportunities for the future:


         The HPSS has always worked together in ICT matters.                The
         strength of the commitment to collective action is stronger now
         than ever before. This has many benefits:



     •      The overheads of undertaking new developments are shared
            across the service rather than falling entirely on individual
            organisations.

     •      Co-operation promotes Value for Money in procurement.

    •       With very few exceptions, the HPSS has common application
            systems across all organisations.

     •      This results in the same data structures being used across the
            HPSS and in effect creates data standardisation.

     •      Users who become familiar with a system do not have to learn
            another when they move location or if they work in more than
            one organisation.


                                     234
12.10.12 The ICT strategy for the HPSS expresses the need to increase
spending to at least 1.2% of revenue. In comparison, by 2005 the NHS in
Wales should have reached their declared target of 2% of revenue. In
HPSS terms that would amount to £50million pa, £20 million pa more
than the Strategy envisages.


12.10.13 In England the NHS is projecting an ICT spend of around
£2billion pa. That is more than 3% of revenue, equivalent to £75million
pa for the HPSS or 2½ times the Strategy estimate.


12.10.14 The lower percentage is attributed to the scale of the HPSS, and
the presumption that the existing practices of collaboration and common
procurements will continue in the implementation of new services. This is
an indication of the effective use of ICT resources in the past.


Capital Expenditure Framework

12.10.15 The arrangements for the distribution and application of capital
resources have been in operation from the 1994/95 year. This framework
aims to take forward critical major hospital developments and support
strategic rationalisation, and make more resources available to providers
to address local needs and priorities, reflecting the added responsibility to
meet statutory standards.


12.10.16 A rigorous planning regime is in place.            Business cases
conforming to the Capital Investment Manual, which is derived from the
Treasury Green Book, are required for all projects, whether or not formal




                                    235
approval under delegated arrangements is required.             The process
requires:-


      •      a detailed, systematic examination of service needs, options
             and cost, non-monetary evaluation, risks and affordability.
      •      formal requirements for procurement, project management
             and control including structures, lines of responsibility,
             reporting and central monitoring.
      •      for all major projects, frequent reporting and regular formal
             reviews by Major Project Monitoring Groups representing the
             Department, the Trust owner and the principal HSS Board
             commissioners.
      •      post-project evaluation.


Procurement Practice


12.10.17 All major projects are undertaken by Trusts with the full
involvement of Health Estates Agency professionals specialising in the
project management, planning and design of health projects.            This
agency is recognised as a Centre of Excellence in the most recent DFP
Review of Procurement and has developed and refined best practice
methods for the delivery of major capital projects. Some of these best
practices are currently being adopted by the NHS for use in England.
Performance over recent years on a range of major projects, such as the
new Causeway Hospital and the Royal Victoria Hospital, is equal to or
better than that being achieved elsewhere in the UK.




                                        236
Capital Developments



12.10.18 A number of significant hospital and other developments have
been achieved over the last 5 years. The major developments completed
are:


       •   the new Causeway Hospital, replacing the existing Coleraine
           and Route Hospitals
       •   a major extension at Altnagelvin Hospital. This is part of a
           major modernisation programme to extend the life of the main
           hospital which dates from the 1960s
       •   a major refurbishment of the external cladding of Craigavon
           Hospital
       •   Phase 1 of the Redevelopment of the Royal Victoria Hospital


12.10.19 Other hospital developments include the expansion of renal
dialysis services to local satellite sites, removal of acute services from the
Ards Hospital and consolidation on the Ulster Hospital site, and
establishment of cancer units at major hospital sites in line with the
Department’s strategy for the provision of cancer services. A programme
to install Magnetic Resonance Imaging in all the major acute hospital
sites has been launched, and PET scanning has been introduced at the
RVH on a research basis. A regional brain-injury unit and specialist
medium-secure facility are in planning, and a programme of expansion of
residential children’s homes is under way.




                                     237
12.10.20 Significant additional resources have also been made available
for investment in local pressures and priorities identified by Trusts. This
has helped to address unacceptable deterioration in the fabric of the HPSS
Estate and assisted Trusts’ attempts to become compliant with health and
safety standards, including Firecode. It has not however enabled
significant inroads to be made in rationalising and modernising outdated
and inappropriately placed building stock providing local community
services.



Rationalisation of the Estate


12.10.21 When HSS Trusts were created in the mid-90s, only those land
and property assets that were required to deliver their services were
transferred to their ownership. This process brought about a substantial
rationalisation of the whole HPSS estate.


12.10.22 To date, some 185 sales have been concluded for some 390
acres of property realising almost £33m. This year, some further 11 sales
are forecast to dispose of a further 32 acres approximately and realise
over £3.5m.


12.10.23 The remaining surplus, excluding those held by the Trusts,
occupy almost 800 acres and might realise £50m if planning decisions are
favourable on the largest sites close to our major towns and cities. Trusts
are required under the Department’s Priorities for Action - 2002/03 to
include timetabled programmes for disposal of surplus property in their
Trust Delivery Plans.



                                    238
Fig 12.6

            Disposals




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                                                                                                                           2002/3
                                      1993/4 1994/5 1995/6 1996/7 1997/8 1998/9 1999/0 2000/1 2001/2
                                                                                                                            Est
               Sale proceeds £m        £2.2      £4.3    £2.1   £3.3    £1.2    £4.2      £5.0        £2.6        £4.6      £3.5
               No of sales                 30      26     28     15     13      20        12           9              21    11
               Site area (acres)           45      78     27     52      7      41        31           9              66    32




      12.10.24 The remaining surplus property that is saleable is all currently
      being marketed, largely to various disposal strategies recommended by
      the Valuations and Lands Agency. These remaining properties generally
      have been the more difficult rump that have been less easy to market, or
      are part of a protracted disposal strategy.




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12.10.25 The Trust’s estate, having been stripped of its surplus property
at their formation generally had limited scope for much further substantial
rationalisation at this time. However, a significant number of Trusts that
occupy larger land holdings are currently in the process of further
rationalisation of their estate.


12.10.26 Some Belfast Community Trusts have decided to withdraw from
the many small properties in which they deliver their services, to improve
the efficiency of delivery by concentrating on larger single “one stop
shop” premises which may be part funded from the proceeds of these
rationalisations. Most other Trusts are exploring similar approaches and
models to see whether their estate would lend itself to a similar
reconfiguration. Outside Belfast, the same scope for estate rationalisation
is however unlikely, due to lack of market value.


PFI/PPPs


12.10.27 To date PFI contracts with a Total Capital Value of £25.7
million have been signed. These include equipment leases (total capital
value - £12.5 million), the Car Parking Scheme at the Royal Group of
Hospitals (capital value - £2 million), the Energy Management Systems at
the Craigavon Area and Holywell hospitals (combined capital value -
£0.7 million), the Renal Dialysis Units at the Belfast City and Antrim
hospitals (combined capital value - £6 million), a Laboratory Information
Technology System for the Link (RGH/BCH) Laboratory (capital value -
£1 million), and a Joint North/South Clinical Waste Disposal Project (NI
capital value - £3.5 million).




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12.10.28 A number of schemes are under consideration for PFI
procurement. These have a total capital value of around £45 million and
include Ambulance replacement (£3.4 million), the new Services Centre
at Altnagelvin Hospital (£13 million), equipment for the Imaging Centre
at the Royal Group of Hospitals (£20 million), as well as various ICT
schemes and equipment leases (£8.7 million).


12.10.29 There has to be a genuine transfer of risk if value for money is
to be achieved through PPP/PFI schemes. The costs of such schemes can
represent significant revenue commitments for a number of years ahead.
For that reason the transfer of risk, value for money and overall long-term
affordability are key considerations in determining the way forward in
individual cases. Experience of PFI over a number of years now enables
a number of factors to be highlighted:



    •       HPSS PFI solutions in many cases represent very costly,
            complex investments, with a high technological component.
            These can prove challenging, even daunting, for private sector
            interests, with a range of public sector PFI candidates on offer;
    •       The type of scheme impacts on the scope for external revenue
            generation, which in turn offers greater possibilities to the
            private sector.


12.10.30 There are a number of constraints on the scope of the private
sector to out-perform the public sector comparator. These are:


        • The exclusion of clinical staff from any PFI/PPP solution. Staff
           costs account for around 70% of HPSS revenue;


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      • The rigour of the Business Case process in the HPSS which
             ensures that the public sector comparator already reflects the
             optimal level of efficiency (and leaves little scope for the
             private sector to squeeze efficiency savings);


      • The Department’s rigorous management of major capital
             projects which out-perform the NHS in general, and again
             leaves less scope for the private sector to do better.


12.10.31        As a result of the constraints above there is little evidence of
PFI solutions generating revenue savings.           Hence PFI solutions pose
major affordability problems for the HPSS. Each capital investment is,
however, subjected to investment appraisal and reviewed for the potential
application of PPP/PFI based on criteria laid down by the Treasury issued
in June 1998.


12.10.32        The majority of successful PPP/PFI proposals within GB
have been for design, build, finance and operate solutions for new NHS
hospitals.      In NI, the majority of capital expenditure is spent on
refurbishment/upgrade work or in developing new units/blocks on or
adjacent to existing hospital sites. Experience to date has shown that
these are not as suitable for implementation of a PPP solution. Within
RoI, there has been little success in adopting PPP solutions in Health in
the main for similar reasons.




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12.11      PRESSURES ON SERVICE


Backlogs


12.11.1 Because the capital resources available to the Department have
not kept pace with the need to modernise building stock and equipment,
significant backlogs have built up. Critical issues therefore need to be
addressed in the modernisation of facilities and new developments, estate
upgrading and equipment replacement.


12.11.2      Redevelopment     programmes      have   been    initiated   at
Altnagelvin, the Ulster Hospital and the Royal Victoria Hospital. Some
of these facilities date from the 1960s or in the case of the Royal much
earlier.   All are in need of major upgrading or replacement, and
modernisation needs to continue if the full value of investment to date in
the redevelopment programmes is to be realised.


12.11.3 Any decision to advance these programmes, on present resource
levels, will inevitably squeeze out other developments. Alternatively,
general capital (that capital normally distributed to Trusts for investment
in local estate priorities) may need to be diverted to cover expenditure
commitments to major schemes.


Quality Issues


12.11.4 In the NHS in England, consumers of health services were
canvassed to gauge their views on the quality of the services they
experienced as they passed through the system at any level of that
experience. The findings of this survey constituted the NHS Plan. This


                                   243
focused not only on the additional staff that was deemed as required, but
also issues such as the food in hospitals, their cleanliness and the overall
environment within which patients were treated.


12.11.5 The ‘patient environment’ issues included items such as: greater
space in wards, receptions and waiting areas; softer finishes throughout
healthcare premises; better control of the environment by patients; patient
advocate facilities; and many aspects of the privacy and dignity of
patients.   Incorporating all these new standards into Health Building
Notes (HBN) and Health Technical Memoranda (HTM), the guidance
documents on the built healthcare estate, has had the effect of adding on
average a 13% increase in the cost allowances for hospital building.
Various other increases in other types of healthcare facilities would
increase or decrease this figure depending on the percentage of patient
area included in the buildings. New building stock in England will be
built to these new NHS Plan standards, increasing the quality of the
patients’ experience throughout their care, and contributing to that care.


12.11.6 Lack of resources have not allowed these new standards to be
adopted and, therefore, patients will not benefit from this quality of
healthcare, creating as it will a second class of service for patients in NI.


12.11.7 None of the figures associated with needs in the health and social
care service in NI mentioned in this paper include this “consumerism”
uplift.




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Controls Assurance


12.11.8 The Department has decided that a comprehensive Controls
Assurance system should be adopted by all Trusts, similar to that
currently running in the NHS in England. This requirement to
demonstrate incremental improvement against a wide range of standards
(nine of which are estate-related) annually will impose a new rigour on
Trusts forcing them to address areas that have had to be neglected over
the years due to the lack of capital.


This system, which is part of the whole clinical governance approach in
the HPSS, will allow parity of approach with the NHS.


12.12 CONCLUSIONS


      •      Useful progress has been made in the strategic development
             of hospital sites, and in tackling a range of service pressures.


      •      This has been achieved through efficient use of existing
             resources, in terms of procurement and management of
             capital investment.


      •      All capital investments are already reviewed against
             Treasury criteria for the applicability of PFI/PPP, resulting
             in a range of PFI/PPP procurements and plans for others,
             within the constraints of suitability and affordability.


      •      Income from disposals of surplus land and property is being
             maximised.

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•   A significant proportion of the health and social services
    buildings and equipment is in an unsatisfactory condition,
    and improvements in backlog position are proving difficult
    to achieve with present capital provision.


•   The key strategic issues of capacity, configuration, location
    and modernisation of the estate cannot be properly addressed
    within the current level of capital allocation.


•   Many of the main ICT systems require replacement and
    significant new investment is required if care professionals
    are to have ICT support equivalent to their NHS colleagues.


•   Lack of resources is hampering investment in rationalization
    and securing modernisation of services, which would
    provide better placed facilities, with improved standards for
    service users.


•   Fewer strategic projects can be taken forward, and projects
    are being delayed and critical service developments denied
    to patients because of lack of resources.




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