OUTLINE BUSINESS CASE FOLESHILL AND BROWNSOVER … · OBC Outline Business Case CoCHC Procure 21+...
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OUTLINE BUSINESS CASE FOLESHILL AND BROWNSOVER PRIMARY CARE DEVELOPMENTS NHS England (West Midlands) and Coventry and Rugby CCG NOVEMBER 2016
Transcript of OUTLINE BUSINESS CASE FOLESHILL AND BROWNSOVER … · OBC Outline Business Case CoCHC Procure 21+...
OUTLINE BUSINESS CASE FOLESHILL AND BROWNSOVER PRIMARY CARE DEVELOPMENTS
NHS England (West Midlands) and Coventry and Rugby CCG
NOVEMBER 2016
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VERSION CONTROL
Version Commentary Date of version change
Author
1 Draft created
2 Issue to client for review
24.5.16 Arcadis
3.0 Issue to client to begin approval process
02.06.16 Arcadis
3.1 Incorporated DW comments
20.06.15 Arcadis
3.2 Inclusion of CHP information on shadow PSC
21.06.15 Arcadis
3.3 Further updates from NHSE and CCG added
27.6.16 Arcadis
3.4 Inclusion of NHSPS information on shadow PSC
3.7.16 Arcadis
3.5 Populated further information from NHSE, NHSPS and CHP
4.7.16 Arcadis
3.6 Updated follow ing review by PAU and subsequent meetings w ith
NHSPS 27.9.16 Arcadis
3.7 Updated follow ing meeting w ith CHP
25.10.16 Arcadis
3.8/3.9 Incorporated comments from DW
10.11.16 Arcadis
3.10 Completed version for issue to PAU
21.11.16 Arcadis
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CONTENTS
1. EXECUTIVE SUMMARY .............................................................................................. 15
1.1. Overview.......................................................................................................................... 15
1.2. Strategic Case .................................................................................................................. 16
1.2.1 National......................................................................................................................... 16
1.2.2 Regional ........................................................................................................................ 17
1.2.3 Local............................................................................................................................. 17
1.3. Economic Case ................................................................................................................ 18
1.3.1 Non-financial option appraisal ........................................................................................... 18
1.3.2. Quantitative benefits- economic appraisal ........................................................................... 19
1.3.3. Identification of the preferred option ................................................................................... 19
1.4. Commercial Case ............................................................................................................. 19
1.4.1 Foleshill......................................................................................................................... 19
1.4.2 Brownsover.................................................................................................................... 20
1.4.3 Development of generic key principles ............................................................................... 21
1.5. Finance Case ................................................................................................................... 22
1.6. Management Case ............................................................................................................ 23
1.7. Conclusion....................................................................................................................... 24
2. INTRODUCTION ........................................................................................................... 25
2.1 Background & Project Scope............................................................................................. 25
2.1.1 Background ................................................................................................................... 25
2.1.2 Project scope ................................................................................................................. 26
2.2 Wider Stakeholders .......................................................................................................... 26
2.3 Approvals Required .......................................................................................................... 27
3. THE STRATEGIC CASE .............................................................................................. 27
3.1 Introduction ..................................................................................................................... 27
3.2 Organisational Overview ................................................................................................... 27
3.3. National Strategic Context................................................................................................. 27
3.3.1 NHS Five Year Forward View ........................................................................................... 27
3.4. Local Strategic Context..................................................................................................... 28
3.4.1 Strategic Plan 2014 - 2019 ............................................................................................... 28
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3.4.2. Strategic and Operational Plans 2015/16 to 2018/19 ............................................................ 30
3.4.3. Primary Care Strategy 2015 – 2019 ................................................................................... 31
3.4.4. Commissioning Intentions 2016/17 .................................................................................... 34
3.4.5. Local Estates Strategy ..................................................................................................... 35
3.4.6. Joint Health and Wellbeing Strategy .................................................................................. 36
3.4.7. Current surgeries ............................................................................................................ 37
3.5 Foleshill ........................................................................................................................... 37
3.5.1 Overview ....................................................................................................................... 37
3.5.2 Health Needs ................................................................................................................. 38
3.5.3. Existing Arrangements..................................................................................................... 39
3.5.4. Malling Health Practice .................................................................................................... 40
3.5.5. Case for Change ............................................................................................................ 42
3.6. Brownsover...................................................................................................................... 45
3.6.1. Overview ....................................................................................................................... 45
3.6.2. Health Needs ................................................................................................................. 46
3.6.3. Existing Arrangements..................................................................................................... 46
3.6.4. Investment Objectives & Benefits ...................................................................................... 47
3.6.5. The proposed site ........................................................................................................... 48
3.6.6. Scope of Service............................................................................................................. 48
3.6.7. Capacity Planning ........................................................................................................... 48
3.7. Workforce ........................................................................................................................ 49
3.8. Summary ......................................................................................................................... 49
4. THE ECONOMIC CASE ............................................................................................... 51
4.1. Introduction ..................................................................................................................... 51
4.2. Constraints ...................................................................................................................... 52
4.3. Benefits Criteria and Critical Success Factors .................................................................... 52
4.4. The long listed options ..................................................................................................... 53
4.4.1. Foleshill long list options .................................................................................................. 53
4.4.2. Brownsover long list options ............................................................................................. 58
4.5. Short-listed options .......................................................................................................... 62
4.6. Qualitative Benefits Scoring .............................................................................................. 62
4.6.1. Foleshill......................................................................................................................... 64
4.6.2. Brownsover.................................................................................................................... 65
4.7. Preferred option ............................................................................................................... 67
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4.7.1 Foleshill......................................................................................................................... 67
4.7.2. Brownsover.................................................................................................................... 68
4.8. Quantitative benefits- economic appraisal.......................................................................... 69
4.8.1. Methodology .................................................................................................................. 69
4.8.2. Capital Costs.................................................................................................................. 70
4.8.3. Revenue Costs of Short-listed Options ............................................................................... 71
4.9. Net present cost results .................................................................................................... 72
4.9.1. Risk appraisal ................................................................................................................ 72
4.9.2. Sensitivity analysis .......................................................................................................... 73
4.9.3. Conclusions of Economic Appraisal ................................................................................... 74
4.10. The preferred option...................................................................................................... 75
5. THE COMMERCIAL CASE .......................................................................................... 76
5.1. Introduction ..................................................................................................................... 76
5.2. Foleshill ........................................................................................................................... 76
5.2.1. Required services ........................................................................................................... 77
5.2.2. Potential for risk transfer .................................................................................................. 77
5.2.3. Proposed charging mechanisms ....................................................................................... 78
5.2.4. Proposed contract length ................................................................................................. 79
5.2.5. Proposed key contractual clauses ..................................................................................... 79
5.2.6. Personnel implications (including TUPE) ............................................................................ 80
5.2.7. Accounting treatment....................................................................................................... 80
5.2.8. Public Consultation ......................................................................................................... 80
5.3. Brownsover...................................................................................................................... 80
5.3.1. Procurement Strategy...................................................................................................... 81
5.3.2. Planning permission ........................................................................................................ 81
5.3.3. Risk Transfer.................................................................................................................. 82
5.4. Equipment Strategy .......................................................................................................... 84
5.4.1. Equipment Identification and ERM – Equipment Responsibility Matrix ..................................... 84
5.4.2. IMT Strategy .................................................................................................................. 85
5.5. Public Sector Comparator ................................................................................................. 85
5.5.1. Overview ....................................................................................................................... 85
5.5.2. Generic Schedule of Accommodation................................................................................. 85
5.5.3. Capital Costs.................................................................................................................. 86
5.5.4. Design Principles ............................................................................................................ 87
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5.5.5. DQI............................................................................................................................... 88
5.5.6. VOA checklist................................................................................................................. 88
5.5.7. Concept drawings ........................................................................................................... 88
5.5.8. Infection Control ............................................................................................................. 89
5.5.9. Project synergies ............................................................................................................ 89
6. THE FINANCIAL CASE ............................................................................................... 89
6.1. Introduction ..................................................................................................................... 89
6.2. Sources of Capital Funding ............................................................................................... 89
6.3. Overall revenue affordability ............................................................................................. 90
6.3.1. Clinical costs .................................................................................................................. 90
6.3.2. Foleshill......................................................................................................................... 90
6.3.3. Brownsover.................................................................................................................... 92
6.4. Shadow Public Sector Comparator Lease Cost................................................................... 94
6.4.1 Foleshill......................................................................................................................... 95
6.4.2 Brownsover.................................................................................................................... 95
6.5. VAT Treatment ................................................................................................................. 96
7. THE MANAGEMENT CASE ........................................................................................ 97
7.1. Introduction ..................................................................................................................... 97
7.2. Project management arrangements ................................................................................... 97
7.2.1. Foleshill......................................................................................................................... 97
7.2.2. Brownsover.................................................................................................................... 98
7.3. Project plan...................................................................................................................... 99
7.4. Project Costs ..................................................................................................................100
7.5. Use of special advisers ....................................................................................................100
7.6. Outline arrangements for benefits realisation ....................................................................100
7.7. Outline arrangements for risk management.......................................................................102
7.8. Outline arrangements for post project evaluation ..............................................................103
7.8.1. DQI, BIM, VOA, BRE ......................................................................................................104
7.8.2. Implementation ..............................................................................................................105
7.8.3. Evaluation of the project in use – shortly after commencement of service ...............................105
7.9. Evaluation once the service is well established .................................................................105
7.10. Management of the evaluation process and resources to deliver ....................................105
7.11. Gateway review arrangements ......................................................................................106
7.11.1. Foleshill........................................................................................................................106
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7.11.2. Brownsover...................................................................................................................106
7.12. Contingency plans .......................................................................................................106
7.12.1. Foleshill........................................................................................................................106
7.12.2. Brownsover...................................................................................................................106
8. CONCLUSION ............................................................................................................ 107
9. APPENDICES ............................................................................................................. 108
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GLOSSARY
Acronym Meaning Acronym Meaning
3PD Third Party Development HTN Health Technical Note
AEP Arden Estates Partnership IM&T Information Management and Technology
APMS Alternative Provider of Medical Services JSNA Joint Service Need Assessment
BIM Building Information Modelling LIFT Local Improvement Finance Trust
BRE Building Research Establishment LPA Lease Plus Agreement
BREEA M Building Research Establishment
Environmental Assessment Method
MCP Multispeciality Community Providers
BRP Benefits Realisation Plan NHSE NHS England
CAMHS Child and Adolescent Mental Health
Services
NHSPS NHS Property Services
CCC Coventry City Council NIA Net Internal Area
CCG Clinical Commissioning Group NPC Net Present Cost
CHP Community Health Partnerships NPV Net Present Value
CIAMS Commissioners Investment and Asset
Management Strategy
OBC Outline Business Case
CoCHC Coventry & Rugby GP Alliance Limited P21+ Procure 21+ Framew ork (procurement
method)
CQC Care Quality Commission PACS Primary and Acute (Care Systems)
CRCCG Coventry and Rugby Clinical
Commissioning Group
PCT Primary Care Trust
CSU Commissioning Support Unit ETTF Estates Transfer Technology Fund
DDA Disability Discrimination Act PFI Private Finance Initiative
DQI Design Quality Indicator P21+ The ProCure21+ National Framew ork is a
DH framew ork agreement w ith six
Principal Supply Chain Partners (PSCPs)
and their supply chains, selected by OJEU
tender process for capital investment
construction schemes.
DV District Valuer PMO Project Management Office
HBN Health Building Note PPE Post project evaluation
HPCG Healthcare Premised Cost Guide PSC Public Sector Comparator
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EAC Equivalent Annual Cost QIPP Quality, Innovation Productivity and
Prevention
ERM Equipment Responsibility Matrix RPA Risk Potential Assessment
ESA European System of National and Regional
Accounts
SDLT Stamp Duty Land Tax
FUNDCO The development vehicle used by Arden
Estate Partnerships to fund and manage
the scheme for Foleshill
SOA Super Output Areas
FBC Full Business Case SoA Schedule of Accommodation
FM Facilities Management SWCCG South Warw ickshire Clinical
Commissioning Group
FRI Full Repairing & Insuring (lease) TUPE Transfer of Undertakings (Protection of
Employment)
GAAP Generally Accepted Accounting Practice VOA Valuation Office Agency
GEM Generic Economic Model WNCCG Warw ickshire North Clinical
Commissioning Group
GIA Gross Internal Area
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TABLES AND FIGURES
Table No.
Detail Figure No.
Detail
1 Preferred Options 1 Distance between proposed sites
2 Key financial information for each scheme 2 Commissioners options
3 Coventry and Rugby population and services 3 Coventry and Warwickshire Health and care
services
4 Residential development sites in Foleshill
catchment 4 GP Practices across 3 localities
5 Foleshill KPI’s 5 5 year strategic plan
6 Key indicators the APMS would like to provide 6 Map of current surgeries in Coventry and
Rugby
7 Some key objectives for a new development
within Foleshill 7 Index of multiple deprivation 2015i
8 Projected capacity growth Foleshill 8 Map showing secondary care sites and walk-in
centre
9 Key objectives for a new development within
Brownsover 9 Proposed site for the new building in Foleshill
10 Projected capacity growth Brownsover 10 Proposed footprint of the new facility at
Brownsover
11 Residential development in the Brownsover
catchment 11 The route to the preferred option
12 Meeting the national, regional and local strategic
contexts 12 Livingstone Road site
13 Constraints 13 Brownsover Centre site
14 Foleshill and Brownsover Benefits Criteria and
critical success factors 14 Project organisation Foleshill
15 Foleshill Long list of options 15 Project organisation Brownsover
16 Brownsover Long list of options 16 Post project evaluation at a glance
17 Shortlisted Options Foleshill
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Table No.
Detail Figure No.
Detail
18 Shortlisted Options Brownsover
19 Weighted Criteria – Foleshill and Brownsover
20 Non-financial option scoring - Foleshill
21 Scoring reasoning - Foleshill
22 Sensitivity analysis - Foleshill
23 Non-financial option scoring – Brownsover
24 Scoring reasoning – Brownsover
25 Sensitivity analysis - Brownsover
26 Economic Appraisal Assumptions
27 Capital costs
28 Foleshill revenue costs
29 Brownsover revenue costs
30 Foleshill Economic ranking of development
options
31 Brownsover Economic ranking of development
options
32 Foleshill Economic ranking of development
options risk adjusted
33 Brownsover Economic ranking of development
options risk adjusted
34 Foleshill – Sensitivity Scenarios
35 Brownsover – Sensitivity Scenarios
36 Foleshill Combined appraisal of options
37 Brownsover Combined appraisal of options
38 Preferred options
39 procurement option review
40 risk transfer matrix
41 NHSPS procurement options
42 Brownsover example risk transfer matrix via 3pd
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Table No.
Detail Figure No.
Detail
route
43 risk transfer matrix
44 Equipment groups
45 Generic Schedule of Accommodation
46 Capital costs from OB forms
47 Capital funding costs
48 Foleshill Recurrent Revenue Affordability Source
and application of funds
48a Foleshill summarised schedule of
accommodation
49 Foleshill non-recurrent costs
50 Brownsover Recurrent Revenue Affordability.
Source and application of funds.
50a Brownsover summarised schedule of
accommodation
51 Brownsover Non Recurrent Costs
52 Foleshill Benchmark capital costs
53 Brownsover Benchmark capital costs
54 Project plan
55 Special advisors
56 Key benefits
57 Key financial information
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APPENDICES
Appendix No. Appendix name
1 Project initiation document Foleshill
2 Project initiation document Brow nsover
3 Letter of support Foleshill
4 Letter of support Brow nsover
5 Slide pack from options appraisal w orkshop
6 Detailed economic appraisal – Foleshill
7 Detailed economic appraisal – Brow nsover
8 Planning consent for Foleshill
9 Concept draw ings for planning application for
Foleshill
10 Generic schedule of accommodation
10a Schedule of accommodation based on reduced m2
(626 m2)
11 Concept draw ing Option 1 Foleshill/Brow nsover
12 Concept draw ing Option 1 Foleshill
13 Concept draw ing Option 1 Brow nsover
14 Concept draw ing Option 2 Foleshill/Brow nsover
15 Concept draw ing Option 2 Foleshill
16 Concept draw ing Option 2 Brow nsover
17a OB forms Foleshill (782m2)
17b OB forms Foleshill (626m2)
17c OB forms Brow nsover (782m2)
17d OB forms Brow nsover (626m2)
18 Foleshill DV report
19 Brow nsover DV report
19a NHSPS Addendum Report
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19b CHP Addendum Report
20 BRP
21 Project risk register
22 NHS guidance on PPE
23 RPA – Foleshill
24 RPA - Brow nsover
25 Planning consent for Foleshill demountable
26 Planning extension request for Foleshill
demountable
27 VOA form for both Foleshill and Brow nsover
28 DQI report and attendance list
29 Letter from CCG’s regarding site acquisition for
Brow nsover from CWMIND
30 OBC approval letter Foleshill to CHP from NHSE
31 DOF letter to NHSE confirming approval of
additional revenue consequences
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1. Executive Summary
1.1. Overview
The purpose of this Outline Business Case (OBC) is to seek approval from NHS England, Community Health Partnerships (CHP), NHS Property Services (NHSPS) and Coventry and Rugby CCG for investment in two primary care developments in Foleshill, Coventry and Brownsover, Rugby. The OBC seeks to obtain approval for the investment, it is then intended that this document is used as a blueprint to creation of the Full Business Case (FBC) which will give details of the procurement process prior to financial close. Both projects had been approved by the previous Primary Care Trusts (PCTs) (pre April 2013) and are fully supported by both local commissioners, local authorities, MPs and the general public. At the end of the OBC period, discussions took place with both NHSPS and CHP. The outcome of the meetings are recorded in the addendums – Appendices 19a and 19b Figure 1 shows the location of each of the proposed sites and the estimated distance between them.
Figure 1: Distance between two sites
The scope for both projects is to provide permanent, fit for purpose, future proofed accommodation for each of the APMS practices to accommodate current and growing list sizes.
This OBC covers both projects to accelerate the business case process in a controlled process. The following two options were considered by Commissioners with Option 2 being the Preferred Option. Figure 2 below shows the two options considered by commissioners.
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Figure 2 Commissioners options
The two buildings will be of a similar size, progressing a joint OBC was more efficient for the commissioners. Separate FBCs enable individual information to be included following negotiations with potential service providers/suppliers prior to the formal signing of contracts and the procurement of goods and services.
1.2. Strategic Case
1.2.1 National
The NHS nationally is facing a number of challenges such as:
A greater life expectancy
Increased number of people living with long term conditions
Pressure to stay within budgets and to cut costs
Ongoing statutory and regulatory requirements around sustainability and energy consumption, carbon footprint and waste.
The pressure is on both nationally and locally to explore new ways of working and service provision to rise to these challenges and provide a more engaged relationship with patients, carers and the local community to promote wellbeing and prevent ill health.
Some of the changes needed can be brought about by the NHS itself whilst others require partnerships with local communities, local authorities and employers.
The Foleshill and Brownsover developments meet the demand of these national requirements by:
Providing patients with care closer to home and reducing admissions to local acute hospitals.
Promoting wellness and preventing ill health within the community.
Being a centre designed to meet the latest standards for health care buildings, with the flexibility to meet the changing demands of the local population
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1.2.2 Regional
The three Clinical Commissioning Groups in Coventry and Warwickshire (the CCGs) have agreed to work together to achieve common aims and to become a larger unit of planning, utilising resource in the most efficient way to rise to local challenges.
Some of the local challenges the CCGs face are:
Continued growth in population
Aging population
A more ethnically diverse population
A life expectancy gap between more and less affluent households in the area
The Strategic and operational plans 2014/2015 – 2018/2019 created by the CCGs in collaboration with local communities, third sector and voluntary organisation sets out a number of risks:
Financial targets
QIPP delivery
A&E Performance
In order to inform the strategic plan for the area and address the risks identified, the principles of the Coventry and Rugby CCG’s approach to transformation are:
To deliver care closer to home
Specialist care in the right place, at the right time
Enable patients to live the lives they choose
Clinicians from across health and social care working together
Use of innovative practice and technology to deliver care
Care delivered within a financially sustainable system
Mental disorders are treated on par with physical disorders.
Delivery of the Foleshill and Brownsover schemes will address these needs by:
Creating local accessible primary care spokes where services relevant to patient’s needs are delivered
New buildings would mean that space could be optimised providing for efficiency of use
The building would be designed to be a flexible model for future service delivery and would be a light modern space to promote wellbeing for both patients and staff.
1.2.3 Local
The scope of this business case is to build two separate Health Centres to meet the growing population of both the Foleshill and Brownsover areas. The buildings will be flexible enough to accommodate growth in the area in respect of new housing estates and expected list sizes of 10,000 each.
Foleshill
A Stage 1 LIFT approval was received by the then Midlands and East Strategic Health Authority in September 2011 for a new development in Foleshill. At the time the Local Authority, Coventry City Council (CCC), asked health colleagues to postpone development of the scheme on a planned and commercially
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available site, and to wait for the Livingstone Road Leisure centre site, owned by CCC, to become available following relocation of the leisure facilities which were planned for 2014. This site is now available as a brownfield site following the demolition of the leisure centre. GP services are provided in Foleshill through an APMS contract. The service provider currently operates from a demountable building located on the back of a pub car park in Station Street West which is under temporary planning permission. This planning permission has already been extended in 2012 and again in May 2016. The lease for the land expired in December 2015, however the Lease was not ‘contracted out’ therefore notionally the lease continues until brought to an end by notice of not less than 6 months.
Since autumn 2014, when it was determined that the site should be held exclusively for Health, local commissioners have been under considerable pressure to deliver the new GP facility.
Brownsover
A business case for a new building in Brownsover was originally written in 2010. At this time the named surgery building was located at Albert Street near Rugby town centre with a branch surgery in Bow Fell, Brownsover. Both premises were closed when the GP contract ended on 17th April 2015.
At the time of the closure of the GP surgeries in Albert Street and Bow Fell, ‘caretaker arrangements’ were put in place to offer health services from temporary accommodation in Lower Hillmorton Road. This arrangement continues up to the present time.
The development outlined in the original business case was to be built on a piece of land next to the branch surgery premises in Bow Fell, Brownsover. This land by the Brownsover local centre is owned by Rugby Borough Council who are making it available to NHS England for the purpose of building the new health centre.
1.3. Economic Case
Robust option appraisals on the possible solutions to the need for new primary care centres on both Foleshill and Brownsover are included as part of the economic case. These comprise a non-financial and financial appraisal, which when combined identify the preferred option for each scheme.
1.3.1 Non-financial option appraisal
On 26th April 2016 a non-financial option appraisal workshop was held jointly for the two schemes which included the key stakeholders for each project. These included representatives from service providers, the CCG, NHS England and patient representatives.
Discussions took place around possible options for service delivery resulting in a long list of options being created. The strengths and weaknesses of each of those options was discussed and the stakeholders came to a consensus on which options to take forward to a shortlist.
Once shortlisted, the key benefits of the projects were weighted by importance and a raw score of 1 – 10 used as a multiplier. The options were then scored and the preferred option identified.
The outcome of this qualitative appraisal was the identification of the following as the preferred option:
Foleshill - New build development on the Livingstone Road site.
Brownsover - New building on Brownsover Local Centre site
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1.3.2. Quantitative benefits- economic appraisal
A quantitive appraisal was also undertaken on the shortlisted options. This section provides a detailed overview of the costs and benefits associated with each of the options and identifies the option which provides the greatest net economic benefit.
The outcome of this analysis identified the following as the preferred quantitive options:
Foleshill – Do minimum, remaining in the existing temporary location for the short term
Brownsover – Do minimum, remaining in the existing accommodation for the short term
The ‘Do minimum’ option would mean remaining in the temporary facilities for the short term. However a longer term solution would still be required as the temporary solution is only viable for a maximum of 2 -3 years
1.3.3. Identification of the preferred option
Following a detailed cost benefit analysis the preferred option for each development is shown in table 1
Foleshill Brow nsover
Option 3, to provide a new build development on the
Livingstone Road site.
Option 3, to provide a new build development on the
Brow nsover Centre site.
Table 1: Preferred options
1.4. Commercial Case
This section sets out the commercial arrangements for the project identifying the procurement strategy for each scheme. It looks at the strategies for the provision of equipment and IM&T and identifies the key risks the projects faces and who is best placed to manage these risks.
1.4.1 Foleshill
Although Foleshill is in a LIFT area, due to the scale of this development, the standard Lease Plus Agreement (LPA) normally used has been discounted due to the high costs on fixed items such as legal, financial and future maintenance and lifecycle factors. It has been therefore determined that the facility will still be procured through Arden Estates Partnership (AEP), the local LIFTCo, but using a 3pd type arrangement. AEP, will provide a formal lease for the whole building to CHP for a period of 25 years. The terms of this lease will need to be agreed at FBC stage between AEP, CHP and the District Valuer to ensure value for money of the transaction.
The land the new development will be built on at Livingstone Road is under the ownership of Coventry City Council. The site is significantly larger than that required purely for the health development. Discussions have therefore been under way with Coventry and Warwickshire Mind (CWMIND) who have indicated that they are willing to share the site. CWMIND have also indicated they are willing to purchase the whole site as they are in a position to move ahead in advance of health. The intention is therefore for CWMIND to progress with the purchase of the whole site for £425,000, with 0.38 acres of the site identified for health use at a cost of £125,000.
A planning application for the Livingstone Road was granted on 18 February 2016.
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1.4.2 Brownsover
Brownsover is not located in a LIFT area. NHS Property Services (NHSPS) will therefore lead the delivery of the new facility using NHS capital and the APMS contractor taking a lease (with suitable guarantees from the local commissioners).
Since April 2013 commissioners have met with local representatives from both NHSPS and CHP in an attempt to reach agreement on project delivery and have no preferred option for developing/delivery of this scheme other than value for money and shortest time to practical completion/commissioning. The final procurement route will be determined at Full Business Case stage.
The land for the proposed building in Brownsover is owned by the Council and they are making this available at an estimated cost of £280,000 to the NHS for the purpose of the scheme. There is currently no planning consent on the land, however, NHS PS are in active discussions with Rugby Borough Council who are fully supportive of the use of the site for a Primary Care facility The land held by Rugby Borough Council has been made available to accommodate a new surgery facility in Brownsover. An original Cabinet report in 2013 approved the in principle transfer of the land to the local GPs as part of the original proposed GP led scheme. In December 2015 the Council confirmed with NHSE the continuing intention to deliver the scheme following the collapse of the original GP led scheme and the Council confirmed that they continued to support the proposal and therefore were will ing to maintain the land allocation. The longstanding proposal has been that in lieu of a capital receipt for the site, the proposed development would provide approx. 100m2 new community facility and it has been confirmed by the Council that this requirement still stands. The completed community space would be owned and controlled by the Council. On the basis of the above NHSPS, Acquisition and Disposal team have commenced discussions regarding proposed terms of the agreement with the main aspect being the documentation of land values against build costs for the construction of the community space. Although there is a Cabinet approval in place, the Council still need to confirm the value of the transfer to satisfy the provisions set out on Section 123 of the Local Government Act 1973. The provision outlines that the Council should seek best consideration for the disposal of its assets and any deviation from this should be documented with an appropriate rationale. Assurance has been given by the council that this is a matter of reporting to Cabinet rather than seeking approval, however any difference in value will have to be explicitly reported. The proposed build cost for the community space to offset against the land value is still to be ascertained.
Discussions are ongoing with Rugby Borough Council and a schedule of accommodation has been agreed within the 100m2 (GIA) allowance. The design solution will be assessed by the consultant team to provide the most efficient solution. The current proposal is to provide a “completed” unit and not a shell only. NHS Property Services will continue to negotiate with Rugby Borough Council through the FBC development stage and the market valuation is agreed for the land. In the event that the land valuation is lower than the £280K, potential mitigation could be to defer to a shell only offer (i.e. just delivery of the shell of the building and not a fitted out unit), this will be discussed and agreed by all parties including Rugby Borough Council, NHS England and Coventry & Rugby CCG.
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1.4.3 Development of generic key principles
In addition to the summary information above, this section provides details on:
Equipment
As the build contract for both projects will be for just design and build of the new health centres the tenants will be responsible for procurement of much of the medical fixtures and fittings, the loose furniture and any Group 3 or 4 equipment. The cost of equipment has been included in the estimated capital costs for each scheme.
CHP and NHSPS will work together with the tenants to determine the most appropriate procurement and funding route for the equipment. Options include tenants funding and purchasing individual items to a combined procurement approach, with procurement from ETTF.
Where practical, it is planned to transfer equipment from the existing facilities to the new healthcare buildings. Where this is not practical, equipment will be procured, purchased, supplied, installed and commissioned, as to be set out in an Equipment Responsibility Matrix.
A fully costed equipment schedule for Group 3 and 4 items will be required to support the FBC (s) and the responsibility for procurement and funding will need to be clearly stated in the FBC (and cost forms) when seeking approval
For the purposes of calculating the capital costs of the projects a prudent approach has been taken and it has been assumed there is no equipment transfer.
The Public Sector Comparator
A public sector comparator has been developed for both schemes, based on the list size of 10,000 patients. This comparator will be used to compare against the 3pd proposal at FBC stage or used as a starting point for a capital funded scheme for Brownsover.
Generic Schedule of Accommodation
A generic schedule of accommodation has been developed for both schemes based on ‘Example schedules of accommodation for HBN 11-01 - 'Facilities for primary and community care services'. The assumption is that the facility should be sized to accommodate 10,000 patient list with 5 consult/exam rooms and 3 treatment rooms. A summary of the schedule of accommodation is shown in table 44 with more detailed versions including both 1 and 2 storey options shown at appendix 10 and 10a
Design Principles
A number of design considerations have been outlined in the commercial chapter of this OBC, these are:
Referenced to a set of drawings based on the generic schedule of accommodation
That the building is assumed to be linear
That the build will include flexibility and show a clear understanding of adjacencies and patient flow
Building measurements and capacity is shown including GIA
There are two options, single and 2 floor
BREEAM and BIM will form part of the design
The OBC estates standards are based on compliance with HBN 11-01 - 'Facilities for primary and community care services' and all HTM standards referred to / applicable to healthcare accommodation.
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DH Consumerism issues affecting the design of the facility are covered through compliance with HBN and HTM standards and reflected in the Department Costs £m2 used in the PSC
In respect to the commitment to the Government Construction Strategy and with regard to construction cost reduction this will be reflected at FBC when benchmarking construction costs against tendered work packages. Currently Procure 21+ is the only known, reliable source of cost £m2 for healthcare
DQI
The Design Quality Indicator is a toolkit to measure, evaluate and improve the design quality of buildings. A DQI event was held with key stakeholders on 22nd April 2016. The team wanted to test the: strength of the existing brief
assess functionality and
to revisit the potential of both sites.
The brief concentrated on function, impact and build quality. It was confirmed that these would be aspirations rather than an assessment of what was presented, given that no formal design was available to assess. The DQI attendance list and report can be seen at appendix 28. Concept drawings
A set of concept drawings have been developed based on the generic schedule of accommodation and takes into account good design principles.
The drawings show 2 available options, single and 2 floor. These drawings were produced by architects from Laing Construction and Murphy Philipps, both of these companies have extensive healthcare experience.
Valuation Office Agency (VOA)
As part of good practice and assurances, a Valuation Office checklist has been completed (jointly for both schemes). This document assists with identification of key areas of compliance of the development of the premises and at this moment in time both CHP and NHSPS have indicated their intent to comply with the checklist.
Project Synergies
The same principles for the sections above apply to both schemes. It is anticipated that there will be significant synergies as a result of the joint development of the two schemes. These synergies could be derived, for example, from the following:
standardisation of the design
ability to use the same advisors
ability to share development costs
NHS Property Services and CHP will continue to explore through the FBC stage all aspects of joint working to realise any cost benefits to both schemes.
1.5. Finance Case
An affordability analysis has been undertaken for both the Foleshill and Brownsover scheme. The additional revenue cost compared to current costs is anticipated to be £118,872 and £50,900 respectively. NHS England have reviewed the additional rent reimbursement and associated costs payable to the GP Practice under the Primary Care Premises Costs Directions, and following advice from the District Valuer, consider the additional costs to be appropriate for the proposed new facilities.
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NHSPS and CHP have modelled a shadow PSC, which complies with the DV valuation for each property. A number of further measures can be investigated in the event that a funding gap is identified at FBC stage. These include
Extending the length of the lease beyond 25 years
Using more shared space within the facilities
Derogating from the standard design specifications thereby further reducing the footprint of the building
Reducing the construction costs through using innovative methods
In addition to the recurring costs associated with the new facility a provision has been made for the non-recurrent costs of the lease transaction (legal and Stamp Duty Land Tax (SDLT)) these are anticipated to be in the region of £46,500 per project.
1.6. Management Case
This Section of the FBC explains how the Foleshill and Brownsover schemes will be governed, setting out the delegated authority actions required to ensure its successful delivery in accordance with best practice, This governance will be implemented on approval of the OBC and will stay in place until the new facilities are opened. This section includes the following information:
As the intention is to develop separate FBCs each scheme will have its own project and reporting structure and both will use Prince II methodology.
A summary project programme has been developed for both schemes which shows an anticipated operation date of Early 2018
A summary of project costs has been included. For both schemes it is anticipated that costs of £320k each will be required to take the scheme through FBC to delivery. However it is anticipated that this estimate will be reduced due to joint working by CHP and NHSPS, and their ability to exploit the benefits of delivering synergies by procuring the two schemes to a similar timescale and to a similar design and standard.
A Benefits Realisation Plan has been developed for the overarching project. These benefits will be monitored at regular intervals during the delivery and operation of the projects. The main benefits identified are:
– The facilities meet the needs of the local population
– Address "legacy" estates issues to provide a safe patient environment
– Ensure access to the facility remains "all inclusive", removing barriers to access and ensuring patients feel comfortable with their surroundings
– The facilities provide a high degree of independence and self-care for those with special needs and disabilities.
– Improved facilities for staff and patients
– Improved patient experience
– A place the local community can identify with have a sense of ownership
– Effective care delivered by well trained staff
– Deliver the appropriate capacity and service requirements within necessary timescales and the cost estimates
A risk register has been developed which identifies the key risks for each project. A mitigation plan, and where possible estimated financial impact has been developed for the high risks and this will be reviewed on a regular basis. The key risks identified are as follows:
– Business case approval refused
– Inability to negotiate appropriate terms with current landowners
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– Poor site/building conditions
– Growth in capacity not achieved
– Interdependencies with other services not achieved
– Project is unaffordable
– Unable to secure a suitable APMS provider
– Significant political and public interest could cause issues in completing this project within timescales
Clear guidance for evaluation of the project during and after its lifecycle has been developed. This includes undertaking review at regular intervals during the operation of the new facilities. The Post Project Evaluation will include the use of BIM, DQI and the monitoring against the Valuation Office checklist.
A Risk Potential Assessment (RPA) has been completed for both schemes both of which scored an overall result of ‘medium’. Further detail can be found in section 7.11 and the full assessments in Appendix 23 and 24.
1.7. Conclusion
This OBC has been submitted to NHS England and the Coventry and Rugby CCG, asking for approval to develop full business cases for both the Foleshill and Brownsover schemes.
The key financial information for each scheme are shown in table 2
Foleshill
£
Brownsover
£
Capital Cost of the compliant PSC
based on HPCG (including Optimism
bias, inflation and VAT)
4,409,741 4,653,982
Affordability Envelope set by DV for
rent on new building (627sqm) Based 108,500 98,000
Shadow Lease cost (627 sqm) 108.500 98,310
Non-recurrent costs 46,500 46,500
Project development costs 320,000 320,000
Table 2 key financial information for each scheme
Foleshill has a higher additional revenue requirement than Brownsover, as the latter has higher current costs due to: the current provision of a bus service
current rents and rates are higher for Brownsover
there is currently no reimbursement for water and clinical waste at Foleshill
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2. Introduction
The purpose of this Outline Business Case (OBC) is to seek approval from NHS England, CHP, NHSPS and Coventry and Rugby CCG for investment in two primary care developments in Foleshill, Coventry and Brownsover, Rugby. The OBC seeks to obtain approval for the investment, it is then intended that this document is used as a blueprint to creation of the Full Business Case (FBC) which will give details of the procurement process prior to financial close
This OBC justifies the requirement for capital and revenue investment to construct modern healthcare facilities for General Practice (GP) services provided in the Foleshill and Brownsover localities.
This OBC has been produced using the agreed standards and Five Case model format for business cases, as set out in guidance provided by NHS England. The following chapters are addressed:
The Strategic Case – sets out the strategic context and the case for change, together with the
supporting investment objectives for the scheme.
The Economic Case – presents the robust option appraisal process followed and the selected choice
for investment which best meets the existing and future needs of services and optimises value for
money.
The Commercial Case – outlines the content and structure of any commercial aspects of the project.
The Financial Case – assesses the affordability and proposes the funding arrangements of the
preferred option.
The Management Case – explains processes and procedures that have been put in place which will
enable the scheme to be delivered successfully in terms of quality, cost and time.
2.1 Background & Project Scope
2.1.1 Background
This OBC has combined two separate business cases for developments in Coventry and Rugby, one in Foleshill and the other in Brownsover. Due to a number of similarities shared across both schemes the information from the existing cases has been updated and amalgamated into this combined OBC.
Foleshill
A Stage 1 LIFT approval was received by the then Midlands and East Strategic Health Authority in September 2011. At the time the Local Authority, Coventry City Council (CCC), asked health colleagues to postpone development of the scheme on the planned and commercially available site, and to wait for the Livingstone Road Leisure centre site, owned by CCC, to become available following relocation of the leisure facilities. This site is now available and has been held exclusively for Health since 2014 when the existing Leisure centre was demolished. The service provider currently operates from a demountable building located on the back of a pub car park in Station Street West which is under temporary planning permission (see appendix 25), already extended in 2012 and currently subject to another application to extend, along with a land lease from the pub which expired in December 2015, a planning extension has recently been applied for (see appendix 26).
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Brownsover
A business case for a new building in Brownsover was originally written in 2010. At this time the named surgery building was located at Albert Street near Rugby town centre with a branch surgery in Bow Fell, Brownsover. Both premises were closed when the GPs contract ended on 17th April 2015.
The development outlined in the original business case was to be built on a piece of land next to the branch surgery premises in Bow Fell, Brownsover. This land is owned by Rugby Borough Council who are making it available to NHS England for the purpose of building the new health centre
The longstanding proposal has been that in lieu of a capital receipt for the site, the proposed development would provide approx. 100m2 new community facility and it has been confirmed by the Council that this requirement still stands. The completed community space would be owned and controlled by the Council. For the purposes of this business case and the development of a public sector comparator it has been assumed that the NHS will purchase the site and the community facility is excluded from the proposed schedule of accommodation. This position will be reviewed at FBC stage following further discussions with the Council
At the time of the closure of the GP surgeries in Albert Street and Bow Fell, ‘caretaker arrangements’ were put in place to offer health services from temporary accommodation at patient services Lower Hillmorton Road. This arrangement continues up to the present time.
2.1.2 Project scope
The scope of this project is to build two separate Health Centres to meet the growing population of both areas. The buildings will be flexible enough to accommodate growth in the area in respect of new housing estates and expected list sizes of 10,000 each. The land identified for Foleshill is located at Livingstone Road. This land is owned by Coventry City Council and has been held for health development. Planning consent has been granted for the building and is shown at appendix 8. The land identified for Brownsover is located in Bow Fell next to the Brownsover local centre site. This land is owned by Rugby Borough Council.
2.2 Wider Stakeholders
The key project stakeholders are:
Coventry and Rugby CCG,
NHS England,
The local primary care service providers. – Malling Health for Foleshill (APMS Contract) and Rugby Town practice (the caretaker practice offering services on a temporary basis to the patients of Brownsover)
All the key organisations have confirmed their support for the project. Support has been demonstrated through the involvement of clinical and non-clinical stakeholders in the development of the scheme proposals. Letters of support for the schemes can be found at appendix 3 and 4. Foleshill OBC approval from NHS England to CHOP can be found at appendix 30
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2.3 Approvals Required
A process of review and subsequent approval for the OBC has been agreed. The scheme will need Coventry and Rugby CCG to agree to the content and proposal and then the OBC will progress to the following bodies for approval:
NHS England (West Midlands - DCO)
CHP
NHSPS
NHS England National Director of Finance
3. The Strategic Case
3.1 Introduction
This section provides a description of Coventry and Rugby CCG; outlining the vision and objectives of the organisation and demonstrating the strategic fit of both the Foleshill and Brownsover projects within the national and local context. This section also presents the case for change with regards to the health needs assessment and regeneration programme for the two localities.
3.2 Organisational Overview
The Coventry and Rugby Clinical Commissioning Group (CRCCG) was licensed from 1 April 2013 under provisions enacted in the Health & Social Care Act 2012, and was fully authorised in January 2014. Since then, it has been responsible for planning and buying healthcare services across Coventry and Rugby. This includes hospital services, mental health services and community services such as district nurses and physiotherapists.
CRCCG comprises 76 member practices across Coventry and Rugby working in 3 locality groups with a registered population of 431,000, which includes some of the most deprived areas in the country. Rugby, as a borough, has a natural boundary. The Coventry and Rugby practices all work together over key decisions.
CRCCG works closely with other healthcare organisations within the local health economy – NHS Warwickshire North (WNCCG) and South Warwickshire CCGs (SWCCG), the Arden /Greater East Midlands Commissioning Support Service, the local area and regional teams of NHS England and local authorities in Coventry and Warwickshire. Risk and control issues are considered and reviewed with these organisations as appropriate, for example, with the local authorities through the Joint Adult Commissioning Boards, Better Care Fund, Health and Wellbeing Boards in both Coventry and Warwickshire and the System Transformation Board.
CRCCG has developed strong links with local communities, the third sector and voluntary organisations and allowing it to reach many different community sectors and involve them in its work. Its commissioning intentions were developed in partnership with its provider trusts, GPs, local authority and council organisations, voluntary sector organisations and members of the public, to ensure that the right services for the CRCCG’s population are commissioned.
3.3. National Strategic Context
3.3.1 NHS Five Year Forward View
The NHS nationally is facing a number of challenges, as people live longer and live with more long term conditions. Funding for health is not keeping pace with demand, resulting in the need to provide services more efficiently. Nationally and locally, health and social care budgets have been under unprecedented pressure and future years will be even more challenging, resulting in the need for a serious focus on new ways of working to provide services. In addition to these challenges, there are a number of statutory,
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regulatory and policy requirements specifically concerned with sustainable development, including various requirements to reduce energy consumption, carbon footprint and waste.
The NHS Five Year Forward View (October 2014) sets out how the health service needs to change, arguing for a more engaged relationship with patients, carers and citizens so that it can promote wellbeing and prevent ill-health. It sets out a vision of a better NHS, the steps it should now take to get there and the actions it needs from others.
What will the future look like?
Getting serious about prevention
Empowering patients
Engaging communities
Multispecialty Community Providers (MCP); expanding the leadership of primary care
Primary and Acute Care Systems (PACS); to better integrate care
Urgent and emergency care networks; transitioning to a more sustainable model of care
Viable smaller hospitals
Specialised care
Modern maternity services
Enhanced health in care homes
New models of care
A new relationship with patients and communities:
Some of the change needed can be brought about by the NHS itself whilst others require partnerships with local communities, local authorities and employers. The NHS has therefore set out complementary approaches required in order to achieve its Forward View:
Backing diverse solutions and local leadership; driving change locally
Providing aligned national NHS leadership
Supporting a modern workforce; ability to deliver innovative new care models
Exploiting the information revolution; capitalising on the opportunities it presents
Accelerating useful health innovation; supporting research to transform services and improve outcomes
Driving efficiency and productive investment; to sustain a high quality NHS
The CRCCG has deferred a direct response to the Five Year Forward View and intends to collaborate with local partners to explore how services can be better integrated to improve the patient experience and to make best use of specialist skills. The CRCCG aspires to work with its local partners to agree a five year Sustainability and Transformation Plan by the summer of 2016, to describe how quality of care, preventative health and finance will be addressed as set out in the Five Year Forward View, by implementing new models of service delivery that will achieve the very best health outcomes within the overall resource available.
3.4. Local Strategic Context
3.4.1 Strategic Plan 2014 - 2019
There are three Clinical Commissioning Groups in Coventry and Warwickshire, the CRCCG, South Warwickshire CCG and Warwickshire North CCG. Each CCG has individual plans as to how it will deliver healthcare for its population but they have all agreed to work collaboratively to achieve common aims, to become a “larger unit of planning”.
Health and social services are delivered in a variety of ways, as demonstrated by Figure 3. The aim is for the best use of the resource available to conquer the local challenges.
Many health challenges are faced across Coventry and Warwickshire:
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The population is expected to continue to grow
between now and 2021, with the greatest percentage growth to be seen in Coventry (15%), closely followed by Rugby Borough (11.1%) and Stratford upon Avon District (9.5%).
In Warwickshire, the challenge relates to an aging population, with more people living for longer with long term medical conditions. Warwickshire currently has approximately 13,356 people aged over 85, and by 2021 this group is expected to be 18,965
A mix of urban and rural populations, with Warwickshire’s rural population being generally older than in the urban areas. The proportion of people aged 65 or over in rural areas is 21%, whilst in urban areas it is 17%.
In Coventry there is a high ethnically diverse population, with 33% of the city’s residents coming from minority ethnic communities compared to 20% for England as a whole.
There is a large gap in life expectancy between the richest and poorest areas of both Coventry and the county of Warwickshire.
The growing and ageing population means increasing financial and service delivery pressure on health and social care services, and this will continue and increase. Services which are flexible and responsive will need to be commissioned with more services provided closer to the patients’ homes.
The acute sector also has its own challenges, resulting in a need to adapt the way in which hospital services are provided, to ensure services are sustainable. The acute sector challenges can be summarised as follows:
A national drive to achieve and deliver changes in the way hospitals work and their relationship with the communities they serve.
A workforce with an older age profile. Many local clinicians are approaching retirement over the
next few years and there are not enough new doctors and nurses to take their place.
Clinicians increasingly wish to work in specialist areas, rather than in a general hospital setting.
In summary in order to inform the strategic plan for the area, the principles of the CRCCG’s approach to transformation are:
Care closer to home
Specialist care in the right place, at the right time
Enable patients to live the lives they choose
Clinicians from across health and social care working together
Use of innovative practice and technology to deliver care
Figure 3 Coventry and Warwickshire Health and care services
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Care delivered within a financially sustainable system
Mental disorders are treated on par with physical disorders.
Sustainability and Transformation Plans (STP) act as a ‘route-map’ to achieving the improvement goals set out in the ‘Five Year Forward View’. They present the best opportunity for transforming health and social care services on a geographic basis to be both sustainable and high quality. The Coventry and Warwickshire STP includes four main work programmes which are:
1. Proactive and preventative – focusing on promoting wellness, keeping people well and providing
ongoing support to patients and service users
2. Urgent and Emergency – focusing on developing a single urgent and emergency care system that
incorporates A&E, out of hours, urgent care centres and rapid social care response
3. Planned Care – developing an efficient and high-quality planned care system that meets national
performance standards and at lower costs, underpinned by effective co-ordination across the system
4. Productivity and Efficiency – focusing on system-wide collaboration which can realise productivity
and efficiency opportunities that lie beyond organisational boundaries and t raditional CIPs
STP plans have been submitted to NHS England. All STPs must demonstrate delivery of the strategies to improve the quality and sustainability of care and some of the improvements in our area will require transformation of our service offer to those who need care. Part of the STP process will include a listening exercise to allow development of the CCGs ’ high level ambitions into detailed plans.
3.4.2. Strategic and Operational Plans 2015/16 to 2018/19
CRCCG has developed strong links with its local communities, the third sector and voluntary organisations and this allows it to reach many different communities sectors and involve them in the CCG’s work. The CRCCG commissioning intentions were developed in partnership with provider trusts, GPs, voluntary sector organisations and over 1000 members of the public to ensure that the right services are provided for the local population. This in turn has helped the CRCCG formulate its vision and values:
Vision
To improve the health and wellbeing of our community
To provide the best possible patient experience
To ensure choice, value for money and high quality care
Values
We will ensure our population receives fair and timely access to a choice of services which are safe, clinically effective and patient centred
We will focus on health and wellbeing, preventing ill health and reducing health inequalities
Services should be as local as possible
Our resources should be used effectively and efficiently by investing in services that deliver quality and best value for money
We will be responsive and listen and work with the community, practices and partner organisations
We will enable and empower our workforce and members to be the best they can.
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CRCCG’s overriding priority is quality, and by working together with patients, hospitals, communities and local authorities it believes it is making positive and sustainable changes for the future for the people of Coventry and Rugby.
CRCCG has signed up to being a Good Corporate Citizen (GCC), and is looking at how it can act and commission services sustainably. Sustainability objectives have been developed and these have been reflected in an action plan based on the GCC guidance.
The CRCCG has collaborated on a number of initiatives to improve communication and involve the public in making decisions about the services it provides, by consultation and public involvement. It has amalgamated with or formed teams and groups to provide support to those providing care e.g. medicines management team, nursing, and quality and safety team, Referral Support Service. It has provided funding for a social prescribing pilot, and through its Partnerships Team, works with external organisations to develop new and improved local health services and pathways, in particular around Urgent Care, NHS Continuing healthcare, Mental Health and Learning Disabilities.
With the geographical footprint of CRCCG covering two local authority areas, CRCCG works closely with Coventry and Warwickshire Health and Wellbeing Boards. The work of the two Health and Wellbeing Boards along with the Joint Strategic Needs Assessments and Joint Health and Wellbeing Strategies inform CCG priorities which are reflected in key CCG documents such as the two year operating plan, the five year strategic plan and Equality Delivery System Action Plan.
CRCCG’s Risk Management Strategy identifies how risks are identified, evaluated, scored and monitored within the organisation. CRCCG has developed a risk matrix which is used for all risks, both clinical and non-clinical, incidents and complaints within the organisation.
3.4.3. Primary Care Strategy 2015 – 2019
Within the CCG area there are 75 GP practices of varying sizes. The GP practices are grouped into 3 localities - two in Coventry and one in Rugby. The map below shows the location of GP practices across the 3 localities. The annual spend on primary care in Coventry and Rugby is approximately £57 million.
Primary care services are currently delivered from a variety of settings across Coventry and Rugby including GP practices, pharmacies, NHS LIFT or similar buildings and secondary care provider and local authority premises, which incur a total of £44 million in estates costs. Figure 3 identifies the location of the primary care facilities.
The original Commissioners Investment and Asset Management Strategy (CIAMS) for Coventry, developed in 2010, envisaged a ‘Hub and Spoke’ service delivery model with a city centre hub, four neighbourhood hubs and a number of primary care spokes. Over the intervening period significant elements of this model have been realised with the completion of the city centre health centre and NHS LIFT (or similar) premises built or in development around the city. The Coventry premises model is to be refreshed to ensure its relevance within the primary care strategy and work undertaken in Rugby to develop an appropriate model for the future. Local authorities in Coventry and Warwickshire and provider NHS Trusts have also reviewed their estate plans and these will need to be taken into account in aspiring to make best use of the health and care estate. Both schemes are referenced in the CCG’s Strategy Estates Plan (January 2016).
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Figure 4 GP Practices across 3 localities
In early 2015, the Coventry Health and Wellbeing Board with the Local Medical Committee (LMC) coordinated a visioning workshop, involving patient representative groups, general practice, pharmacists, the local authority, NHS England and the CCG to explore and develop a 5 year vision for primary care. This was followed up in September 2015 with a further workshop to test and further define the key agreed themes. This resulted in a vision statement:
“Primary care in Coventry and Rugby will be provided as close to home as possible, reducing the dependence on secondary care, in appropriately equipped facilities and adequately resourced”.
The 5 year Strategic Plan on a page for the CCG is shown below on Figure 5.
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Figure 5
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Figure 5: 5 year strategic plan
To implement the vision, three key work streams were identified:
Model of care
Workforce
IT and information sharing
Enabling works associated with these would be undertaken within a clear governance framework, in the areas of commissioning, premises and engagement with patients, carers and stakeholders.
Following the consultation, a coherent work programme is under development to implement the strategy to take forward the vision.
The strategy concentrates in 2016/17 on general practice and it ’s staffing as this represents the highest area of risk, and further work will take place in 2017/18 to integrate the role of pharmacists, dentists, community optometrists and other parts of the system.
The model of care work stream focuses on agreed sets of standards, e.g. around equality and access, pathways and choice of pathway, the principle of “right care, right time, right person”. New ways of working and embracing technology will be explored.
The workforce work stream looks at recruitment, retention and training of primary care staff at all levels in the GP practice, the development of new roles within wider primary care to support multi-disciplinary working, and exploration of training, research and the adoption of best practice.
The technology work stream will build on the roadmap already put in place by the CCG IM&T Strategy 2015-2017, to make information more readily available, more appropriate and convenient for clinicians, managers, patients / carers and citizens.
3.4.4. Commissioning Intentions 2016/17
The commissioning intentions of CRCCG for 2016/17 take into account the specific local needs as described in the Joint Strategic Needs Assessments published by the Public Health Teams within Coventry City Council and Warwickshire County Council.
The CRCCG has four key principles which underpin its commissioning approach:
Assuring quality and safety
Promoting integration
Securing best value
Equality
In terms of responding to the NHS England priorities, the CCG will:
Strengthen primary care services
Improve the quality of care and access to cancer treatment
Upgrade the quality of care and access to mental health and dementia services
Transform care for people with learning disabilities
Tackle obesity and prevent diabetes
Redesign urgent and emergency care services
Provide timely access to high quality elective care
Ensuring high quality and affordable specialised care
Enabling whole system change
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3.4.5. Local Estates Strategy
Coventry and Rugby is comprised of population and services as shown in table 3:
Population and services Coventry Rugby
Population 330,000 101,000
Acute Hospitals 1 1
Health Centres 20 1
GPs 63 12
Dental Practices 41 14
Pharmacists 96 16
Optometrists 62 10
Children’s Centres 17 8
Primary Schools 86 32
Secondary Schools 23 6
FE Colleges 3 0
Libraries 17 3
Parks and open spaces 35 7
Leisure centres 17 1
Table 3: Coventry and Rugby population and services
In recent years, investment has been made to improve and release estate; some notable examples are as follows:
NHS lead development took place pre-LIFT at Tile Hill Health Centre and Willenhall Health Centre, both of which brought together GP practices and a range of community services releasing surplus estate.
PFI Hospital developed in 2006, releasing Coventry and Warwick Hospital Site for redevelopment.
Third Party GP lead developments have taken place in Holbrooks, Jubilee Crescent and Allesley Park Coventry to improve quality of primary care in area and release poor quality surplus sites.
£34 million invested in primary care over past 11 years through LIFT.
– Keresley Green Medical Centre
2 x large practices & pharmacy – releasing a number of sites.
– Longford Primary Care Centre
3 x practices with range of community services – releasing a number of GP sites.
– City of Coventry Health Centre
Number of GP practices and wide range of services including walk in centre, out of hours and a pharmacy
Released a number of surplus sites including; Coventry and Warwick Hospital Site, Hillfields Health Centre, River House, Gulson Clinic, Foleshill Rd GP surgery Broad Street clinic.
– Clay Lane Health Centre
3 x practices come together & pharmacy released 3 x poor quality GP facilities
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Rugby Health and Wellbeing Centre, Market Quarter, Rugby. This development brought together two GP practices, formerly in separate buildings in Rugby, a pharmacy and some community space and opened in March 2014.
Utilisation studies undertaken at key sites & implementation work streams in place (renal/ Coventry & Rugby GP Alliance Limited (CoCHC) /Mammography etc.).
Forrest Medical Centre, Canley developed to bring together a practice based over two sites and space for additional services and to accommodate population growth.
Notwithstanding the investment, a number of poor quality, GP owned premises remain. Some of these are in converted residential properties, and some require attention. The data on the quality of this estate is sparse and further work is required to consolidate local knowledge around the GP estate.
Following a gap analysis to determine future commissioning requirements, the CRCCG Strategic Estates Plan (January 2016) identified the Foleshill and Brownsover projects as being key strategic requirements to meet the predicted population growths for the respective localities.
3.4.6. Joint Health and Wellbeing Strategy
Coventry and Rugby CCG Summary
Mini Joint Service Need Assessments (JSNA) have been produced at district/borough level, by Public Health Warwickshire, to provide localised data and analysis to support the future commissioning plans of Warwickshire’s Clinical Commissioning Groups (CCG).
The following analysis uses the latest available data, which can vary between indicators.
Coventry and Rugby CCG at a glance
Coventry City
Life expectancy (male): 78.1 years (2010-2012)
Life expectancy (female): 82.1 years (2010-2012)
Smoking: 17.9% of adults smoke (2011 – 2012)
Obesity (adults): 26.2% of adults are obese (2012)
Obesity (children, Year 6): 20.4% of Year 6 children are obese (2012-2013)
Rugby Borough
Life expectancy (male): 80.2 years (2010-2012)
Life expectancy (female): 83.7 years (2010-2012)
Smoking: 16.9% of adults smoke (2012)
Obesity (adults): 20.4% of adults are obese (2012)
Obesity (children, Year 6): 16.7% of Year 6 children are obese (2012-2013)
Source: Public Health England – Health Profiles, 2014
Coventry and Rugby CCG summary
Coventry and Rugby CCG comprises of Coventry City and Rugby Borough. According to ONS mid-year estimates, in 2012 the combined population of the CCG area was 424,000, with Rugby providing 24% of this population, and Coventry providing 76%. Both areas within the CCG are projected to experience population increase over the coming years.
Life expectancy for males is 80.2 years in Rugby and 78.1 years in Coventry and for females is 83.7 years in Rugby and 82.1 years in Coventry. When compared with the equivalent national figures, life expectancy in Rugby is higher and in Coventry is lower, for both sexes.
In 2012, 16.9% of adults smoked in Rugby, this is lower than the Warwickshire prevalence of 17.9%. The figure in Coventry is equal to the Warwickshire rate at 17.9%.
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In 2012-2013, 17.6% of pregnant women smoked in Rugby, and 13.6% of pregnant women smoked in Coventry. This equates to 849 babies being born in the CCG to women who smoke.
In 2012, the rate of teenage conception in Rugby was 20.8 conceptions per 1,000 females aged 15-17. The equivalent figure for Coventry is 38.6 conceptions per 1,000 females aged 15-17. In comparison, the Warwickshire-wide rate for 2012 was 24.3, and the national rate was 27.7.
In Rugby Borough, 20.4% of adults are obese with the equivalent figure for Coventry at 26.2%. There is more inequality in proportion of year 6 children that are obese, with the figure at 16.7% in Rugby and 20.4% in Coventry. This compares to equivalent national figures where 23.0% of adults and 18.9% of children are obese.
Public Health Warwickshire has set priorities for Rugby which include: Alcohol misuse Smoking in pregnancy Tackling obesity.
Priorities in Coventry are in line with the Joint Health and Wellbeing Strategy and include healthy people, healthy places, reducing variation and improving.
3.4.7. Current surgeries
Figure 6 shows the location of current surgeries in the area along with their approximate list size
Figure 6: Current surgeries with list sizes
3.5 Foleshill
3.5.1 Overview
Foleshill is an area of approximately 1.4 square miles to the north east of the Coventry city centre and has a population of 19,943 people (2011 census).
38
Housing is a mixture of Local Authority, Housing Association and owner occupied properties. The area has one of the highest numbers of local community groups in Coventry, although it has a high transient population and a hugely diverse cultural mix.
Growth plans within the Foleshill catchment area have identified a number of sites set for residential development, as outlined in table 4.
Development Area Housing Units
Paragon Park 454
Little Heath 344
Total 798
Table 4: Residential development sites in Foleshill catchment
The size profiles of residential accommodation is unknown for these sites, although to give some context using an average of 2.4 persons per dwelling, this would result in a population increase of 1,915.
Foleshill is one of the most ethnically diverse Wards in the City. The majority of Foleshill residents are in the Asian/Asian British ethnic group, 50.1%; this is the highest proportion in the City. About a third of residents are White (30.8%). It is a highly transient population with the highest proportion of residents who were born in other countries (36.2%), and has the lowest proportion of households who are ‘not deprived’ in the whole City (21.6%) which is low compared to the City average of 38.4% .
3.5.2 Health Needs
The population of Foleshill experiences significantly more income deprivation, more child poverty and more old people in deprivation than the average for England. Coupled with:
Significantly more people suffering from limiting long term illness or disability than average in England,
The rate of emergency admissions for all causes is significantly higher than the England rate,
Rates of emergency admissions for coronary heart disease (CHD), Myocardial infarction and chronic obstructive pulmonary disease (COPD) are significantly higher than for England,
Life expectancy for both males and females living in Foleshill are significantly lower than England,
13.1% of the population surveyed in 2011-13 eat 5 portions of fruit or vegetables per day. Significantly less than the Coventry level of 26.6%.i
Figure 7 below shows a map of the index of multiple deprivation for Foleshill in relation to Coventry as a whole.
i Coventry Health ward Profiles Foleshill
39
Figure 7: Index of multiple deprivation 2015i
3.5.3. Existing Arrangements
The current model of Primary Care in Foleshill is a traditional model of GMS and APMS services provided by a range of GP practices of varying levels of age and estate condition.
The patient profile across these practices demonstrates a younger profile as all are below the CCG average of proportion of patients over 65.
Figures for July 2015 – June 2016 show that Foleshill ‘corridor’ practices (normalised per 1,000 population) still show a 14% higher attendance rate at the Walk in Centre (WiC) and an 8% higher attendance rate to UHCW A&E (10% higher aggregated together) than other Coventry practices. The high attendance at WIC could be attributed to the close proximity of the locality to WIC but this does not account for the higher attendance at A&E. The CCG continues to work with practices to reduce these figures by looking at increased capacity, improved access and patient education in use of local services.
Secondary care activity is delivered from the main acute site at University Hospital Coventry and Warwickshire less than 4 miles away, along with further services across the border in Warwickshire at George Eliot Hospital Trust, just under 7 miles, as shown on the map in figure 8.
i English Indices of deprivation 2015_Coventry Summary. Page 8.I
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Figure 8: Map showing secondary care sites and walk -in centre
3.5.4. Malling Health Practice
The APMS contract was procured in April 2010 and has been extended from April 2015 to 31st March 2020 to address inequalities in Primary Care provision in the Foleshill ward, designed to serve a registered list of 6,000 patients. The APMS contract runs for a period of five years.
The core hours for the APMS contract are 52.5 as follows:
Monday 08:00 - 18:30
Tuesday 08:00 - 18:30
Wednesday 08:00 - 18:30
Thursday 08:00 - 18:30
Friday 08:00 - 18:30
Saturday Closed
Sunday Closed
The main priority for the practice is to develop and provide new services to improve patient care. Whilst the current provider aims to maximise the quality of health care provision for its patients, the limitations of the building have meant that many of the aspects of patient care have, unfortunately, had to be compromised.
The APMS service is contracted to deliver the core General Medical plus Additional Services, summarised as;
Asthmas Clinic
Child health and development
Child Immunisations
COPD clinic with spirometry
41
Dressings clinic (nurse led)
Drug and alcohol services
Joint injections
Long-acting reversible contraception (LARC – e.g. IUD or implant)
Minor injuries
Minor surgery
Phlebotomy
Smoking cessation
Young person’s clinic
Learning Disability Health Check
The current APMS provider has a range of Key Performance Indicators (KPI) against their contract which ensures NHS England can measure quality against the service provided. The ability to flex the KPI’s also ensures the service provider responds and develops alongside the needs of the community. This flexibility would allow more relevant services to be brought into the community which in turn will improve the clinical quality of care. Patients can be more efficiently managed through low priority procedures and referral support services with the consequence of reducing unnecessary admissions and hospital referrals.
The current contract KPI’s are shown in table 5
No. KPI Measurement frequency Requirements
1 Access Quarterly Appointments in core hours per w eek and average per
quarter Minimum 30 practice nurse or ANP per 1000
patients Minimum 70 per GP per 1000 patients
2 Patient
engagement
Quarterly There is a representative PPG w ith at least 1 member per
1000 population. The meetings are quorate if attended by
4 or more members. Minuted meetings are held quarterly.
Minutes w ith actions from previous meetings are reported
to the APMS contract meeting.
Annually An agreed method of formal patient feedback is carried
out annually (this can be a survey, facilitated group, or
other qualitative method of feedback). The Area Team to
agree the format and content of the feedback.
The patient group devise actions as a result of the patient
feedback. Patients are informed of the results of the
feedback (e.g. via posters, w ebpage) and are invited to
comment further.
3 Child vacs and
imms
Quarterly Achievement of at least 90% coverage children up to the
age of 5 in accordance w ith routine immunization
schedule for England. To include DPT, Hib,
Pneumococcal, Rotavirus, Men C, MMR (excluding
influenza). An underpinning of up to 3% (i.e. to 87%) is
allow ed in any one quarter, providing the difference is
made up in the follow ing quarter (if the national target
increases above this percentage, the target for the KPI
w ill revert to the national target).
4 Cytology Quarterly Achievement of 80% coverage or equal to or above the
CCG. Average is w hichever is the highest.
5 Flu vacs Annually Achievement of 75% in the over 65 age group.
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No. KPI Measurement frequency Requirements
achievement Average achievement of 60% for at risk groups in year
one, rising by 1% for each year until 65% in year 5 (if the
national target increases above this percentage, the
target for the KPI w ill revert to the national target).
Table 5: Foleshill KPI’s
3.5.5. Case for Change
3.5.5.1. Existing Estate Condition
An APMS contract has been mandated by NHS England to provide services from the new health facility until 31.3.20, which coincides with the end of their contract.
The current APMS provider delivers services from a temporary demountable located at the rear of a former pub car park. The lease for this facility expired in December 2015. However the Lease was not ‘contracted out’ therefore notionally the lease continues until brought to an end by notice of not less than 6 months. Planning for the temporary facility has been extended until 2018. (see appendices 24 and 25).
Capacity in this area is very limited and there is the risk around the planning approval for the demountable and the possibility of the retirement of GP’s in the immediate vicinity. The APMS provider is needed to meet the planned increase in population in the Ward and to offer patients a choice of provider.
Some of the key indicators the APMS provider would like to address but are prevented by accommodation constraints are included in table 6.
Issue Description of Issue Proposed solution
Patient list grow th Development of 798 dw ellings
Possible migration of patients at
those practices w ith GP at retirement
Possible migration of patients at
those practices w ith accessibility
issues
Provide a new build facility
Ageing population Aspirations to tailor Commissioning
services from under one roof.
Provide increase capacity for
additional services
Increased Community Care Pressure to avoid referral and to
increase care in the community
Providing additional services that
could be commissioned such as the
Community Diabetes Transformation
Programme
Provide f lexibility of space w ith
consult/exam rooms at 16m².
Recruitment and retention Poor facilities result in a less
attractive w orking environment w hen
recruiting and retaining staff.
Provision of clinical space that
enables practitioners to implement
evidence-based practice w hen
delivering services.
Layout and design that fosters
communication and strong morale
amongst the team
Table 6: key indicators the APMS would like to provide
43
3.5.5.2. Investment Objectives & Benefits
Table 7 sets out some of the key objectives for a new development w ithin Foleshill.
Objective Expected outcome Indicator
To replace temporary APMS
accommodation at Station Street
West, Foleshill, Coventry, CV6 5ND
w ith new , purpose built premises
supporting a projected population of
10,000.
Improved patient access and
continuity of care in an area of
Coventry that is among the most
deprived w ards in England.
New development
Patient list sizes
To provide patients w ith improved
access to a range of services aimed
at reducing the demand for urgent
care and supporting patients to
manage their conditions at home or
in the community.
Integrated services that w rap around
the patient provided from a purpose
built facility that w ill enhance patient
comfort, safety and dignity.
Reduced unnecessary attendance,
referrals or admissions to hospital.
To ensure security of tenure of
APMS service.
Purpose built property on land held
for health use
New development
Providing modern Primary Care
services to meet Commissioning
strategies.
Continuing to improve the clinical
quality of care
Improved health outcomes for locality
population
To meet the required standards to
deliver the Coventry and Rugby
Primary Care Strategy
Continuing to improve the clinical
quality of care.
Reduced unnecessary attendances,
referrals or admissions to hospital.
Reduction in w aiting times for
practice appointments.
Provision of better reception facilities
and processes.
Updated w aiting times issued.
Improved patient experience and
choice
Increase in patient satisfaction GP patient survey
Provision of bookable appropriate
clinical space.
Increase in outreach services, public
health, Local Authority and third
sector organisations.
Updated utilisation f igures provided
by Centre /Practice Manager.
Provide appropriate choice and
services to the locality.
A w ider variety of services offered. Improved health outcomes for locality
population.
Better community relationship Targeting localities specif ied
problems.
Improved health outcomes for locality
population.
High quality personalised care Improved level of GP provision
delivering improved health outcomes
Reduction in health inequalities
Table 7: Some key objectives for a new development within Foleshill
3.5.5.3. Scope of Service
General Medical Services will be offered from the facility as per the existing APMS contract.
44
3.5.5.4. Capacity Planning
The new development is being built for a 10,000 patient list size. The current APMS contract holder is contracted for a list size of up to 6,000 patients. In addition to this there is a nearby practice which is GP owner occupied with the GPs considering retirement (list size c. 4,400) and both NHSE and C&R CCG are considering succession planning and capacity in this area for the future. The strategic view of NHSE and C&RCCG is to maximise opportunities in the Foleshill Locality and improve accessibility and efficiency. In addition to the above there are housing developments in the area which have already started and therefore there is a certain population increase.
The 10,000 patient requirement is broken down as follows:
2,300 – APMS contract current list size
3,700 – housing growth through two developments i
4,000 – Built in additional capacity to support patients of those GPs in the vicinity who are either approaching retirement age or are in poor premises, along with developing new models of Primary Care.
This is an area with a growing and ageing population with complex multiple health conditions. This building will provide the opportunity for the greater use of technology to enhance patient care and experience.
The patient requirement is broken down as shown in Table 8
Foleshill
Period List Size
Year 1 5000
Years 2-3 7,000
Year 4 10,000
Table 8: Projected capacity growth for Foleshill
The GP Forward View April 2016 outlines a number of developments in the delivery of care that are required and this development will allow these to be meet:
Out of hospital care and managing long term conditions
Greater use of technology to enhance patient care and experience
Redesign of space to enhance capacity for clinical consultation
Wider integration of health and social care
To promote health and wellbeing for the workforce
Discuss with other practices the possibility of ‘working at scale’ and collaborative working
3.5.5.5. Proposed site for Foleshill
Figure 9 shows the proposed site for a new building in Foleshill.
i Based upon ratio of 2.4 persons per dwelling. Type / size of dwellings unknown. 798 dwellings planned
45
Figure 9: Proposed site for the new building in Foleshill
Details of the accommodation requirements to meet service needs and deliver the required capacity are provided in the Commercial Case below.
3.6. Brownsover
3.6.1. Overview
The Borough of Rugby covers an area of 138 square miles located in central England, within the County of Warwickshire.
The Borough’s overall population remained steady between 1971-2001, but between 2001-2011 the population increased significantly by 14.5%. The rise in population was largely due to people migrating into the area and more single parent families, but also as a result of increased birth rate and people living longer. The projected population increase between 2010 and 2035 is expected to be 30%, which would bring the population to in excess of 130,000. This is the largest projected population increase in Warwickshire.
Across Warwickshire as a whole, the highest rates of projected population growth are in the groups aged 65 and over. The eldest age group (those aged 85 and over) is projected to increase by over 190% by 2035.
Between the years 2011-2031, a minimum of 12,400 homes need to be delivered within Rugby Borough. 9600 dwellings are required to meet the objectively assessed housing need for Rugby Borough. A further 2800 dwellings are required to meet unmet need arising from Coventry City. This will be delivered at a rate of 311 dwellings a year between 2022 and 2031.
46
Due to the significant housing development planned for the area, the limited capacity in other surgeries in the area and the Practice closure an urgent need has arisen for this new facility.
Brownsover South and Newbold Town Centre are the only Super Output Areas (SOA) in Rugby within the top 30% most health deprived SOAs in England (The indices of Deprivation Study of 2007)
Brownsover Local Centre is located within Rugby Borough Council and Warwickshire County Council. The local ward is Brownsover.
3.6.2. Health Needs
Poor health typically stems from deprivation and whilst health has been improving in more affluent areas, this is not the case in deprived locations. Given that Brownsover is one of the top three deprived areas within Rugby and across Warwickshire as a whole, it is important that the assessment of need is thorough and reflects the level of health services requiring commissioning.
In addition, the Brownsover area is the fastest growing district of Rugby with above average projected medical problems.
3.6.2.1. Cardiac
Currently 2/3 of the UK population who need cardiac rehabilitation are not getting care. This figure is larger in the Rugby Area as the Rugby Hospital cannot cope with demand.
3.6.2.2. Teenage Pregnancy
Rugby's overall under-18 conception rate Is marginally below the Warwickshire average (2004 to 2006), Brownsover South at 83.9 per 1000 females aged 1S -17 years is significantly above the average.,
In Rugby, Brownsover South ward records the second highest rate of under-18 conceptions.
Newbold ward which record the highest under-18 conception rate.
3.6.2.3. Deprivation
Brownsover South and Newbold Town Centre are the only Super Output Areas (SOA) in Rugby within the top 30% most health deprived SOAs in England (The Indices of Deprivation study of 2007).
Brownsover South is the most deprived SOA In the district and 13th
most deprived in Warwickshire (there are 333 SOAs in Warwickshire).
3.6.2.4. Smoking Addiction
Smoking prevalence for Brownsover South Is the highest in Rugby at 37%.
3.6.2.5. Obesity
The estimated obesity level is significantly higher in Rugby than the average across England with Brownsover South showing the highest level in Warwickshire at 27%.
Families for Health programmes running in Brownsover can be accommodated with on site licences, together with the integration with the local sports network.
3.6.3. Existing Arrangements
The former GP Practice covering this area had a main surgery located in the centre of Rugby town and a Branch surgery in Brownsover. The total patient list size for the Practice was circa 6,700. This Practice closed in 17 April 2015 and a ‘caretaker’ arrangement was put in place with another local GP Practice delivering services under an APMS contract until a new facility was built. An APMS provider will be procured and mandated to work from the new facility.
Following the closure of the former GP Practice some patients nearer to the town centre premises have registered with other practices but the remaining patients and the anticipated new patients into the area will be accommodated in this facility for 10,000 patients
47
3.6.4. Investment Objectives & Benefits
Table 9 sets out some of the key objectives for a new development within Brownsover.
Objective Expected outcome Indicator
To create a purpose built premises
supporting a projected population of
approximately 10,000 patients
(comprised of the list size at the GP
practice w hich closed as w ell as the
projected grow th expected in the
area) to allow the recommencement
of GP services after closure of the
Albert Street and Bow Fell surgeries.
Improved patient access and
continuity of care in an area of Rugby
that is among the most deprived
w ards in England.
New development
Patient list sizes
To provide patients w ith improved
access to a range of services aimed
at reducing the demand for urgent
care and supporting patients to
manage their conditions at home or
in the community.
Integrated services that w rap around
the patient provided from a purpose
built facility that w ill enhance patient
comfort, safety and dignity.
Reduced unnecessary attendance,
referrals or admissions to hospital.
Providing modern Primary Care
services to meet Commissioning
strategies.
Continuing to improve the clinical
quality of care
Improved health outcomes for locality
population
To meet the required standards to
deliver the Coventry and Rugby CCG
Primary Care Strategy
Continuing to improve the clinical
quality of care.
Reduced unnecessary attendances,
referrals or admissions to hospital.
Improved patient experience and
choice
Increase in patient satisfaction GP patient survey
Provision of bookable appropriate
clinical space.
Increase in outreach services, public
health, Local Authority and third
sector organisations.
Updated utilisation f igures provided
by Centre /Practice Manager.
Provide appropriate choice and
services to the locality.
A w ider variety of services offered. Improved health outcomes for locality
population.
Better community relationship Targeting localities specif ied
problems.
Improved health outcomes for locality
population.
High quality personalised care Improved level of GP provision
delivering improved health outcomes
Reduction in health inequalities
Table 9: Key objectives for a new development within Brownsover
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3.6.5. The proposed site
Details of the proposed site for a new build option for Brownsover can be seen in figure 10
Figure 10: Proposed footprint of the new facility at Brownsover
3.6.6. Scope of Service
General Medical Services are to be offered from the facility offering patient services as per an APMS contract.
3.6.7. Capacity Planning
The proposed accommodation will provide permanent accommodation for 10,000 patients. Although it may not be fully utilised initially, it will provide the means to develop and test other models of care for the community, this in turn will reduce the demand on secondary care in line with strategic objectives.
The patient requirement is broken down as shown in Table 10
Brownsover
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Period List Size
Year 1 5,800
Years 2-3 8,500
Year 4 10,000
Table 10: Projected capacity growth Brownsover
There is significant housing planned across Rugby Borough County and all GP practices have reported an increase in activity and identified a need for additional GP services to be provided. This is not an additional service but would ensure re-provision of an existing service which has been terminated as of April 2015 and would allow for additional capacity due to the growth expected in the area.
Growth plans within the Brownsover catchment area have identified a number of sites set for residential development, these sites are in very close proximity to the proposed new site for the development. The residential development sites are outlined in table 11.
Table 11: Residential development in the Brownsover catchment
These developments are predominantly due betw een the years 2015 – 2026, w ith a small percentage due after this
period.
It is expected that 50% of new residents w ill register w ith the new surgery.
The size profiles of residential accommodation is unknow n for these sites, although to give some context using an
average of 2.4 persons per dw elling, this w ould result in a population increase of 5,448.
Details of the accommodation requirements to meet service needs and deliver the required capacity are provided in the
Commercial Case of this document
3.7. Workforce
As shown in the local Primary Care Strategy, produced by Coventry and Rugby CCG, workforce is an issue from both a recruitment and retention perspective. One route to attract new clinicians is to ensure modern models of Primary Care is through estate infrastructure. It is anticipated that the two new developments will encourage the recruitment and retention of highly skilled APMS providers.
3.8. Summary
Table 11 summarises how both the Brownsover and Foleshill schemes meets the national, regional and local strategic context:
Key Strategic priority Brownsover and Foleshill
Development Area Housing Units
Eden Park / Gatew ay Site 1,300
Ambulance Station 29
Coton Park 300
Technology Drive 565
Coton House 76
Total 2,270
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Meeting increased population grow th Sized for a 10,000 list size w hich
allow s for increase in population
Local Hub and Spoke model
Creating local accessible primary
care spokes w here services relevant
to patient’s needs are delivered
Challenging f inancial position Project to be delivered w ithin budget
and value for money
Promoting w ellness and preventing ill
health w ithin the community.
Providing patients w ith care closer to
home and reducing admissions to
local acute hospitals, freeing up
valuable bed space
Delivering a facility that is f it for
purpose and f lexible to deliver new
models of care to the local population
Being a centre designed to meet the
latest standards for health care
buildings, w ith the f lexibility to meet
the changing demands of the local
population
Table 12 meeting the national, regional and local strategic context
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4. The Economic Case
4.1. Introduction
This chapter describes the process undertaken on both the Foleshill and Brownsover schemes in order to determine a preferred option in regards to the future provision of primary care services in the Rugby and Coventry areas.
A five - stage process (identified below) was adopted for the options analysis. Initially, a long list of options was generated by considering a range of option dimensions. This long list was subject to a preliminary appraisal using the Constraints outlined in Section 4.2 to produce an agreed short list. This short list of options was then subject to a more in-depth options appraisal and scoring (see workshop slide pack at Appendix 5). This process identified the preferred non-financial option.
A quantitive appraisal was then undertaken using the Generic Economic model to determine the preferred option from a financial perspective.
The outcome of both these appraisals is then merged to determine the preferred option using a cost/benefit analysis. Figure 11 shows the route to the preferred option.
Figure 11 The route to the preferred option
A workshop was held on 26th April 2016 to undertake the Qualitative option appraisal. This workshop was attended by the following:
Margaret Johnson NHSE (West Midlands)
Kerry Biggs NHSE (West Midlands)
Simon Acquah – CHP
Matthew Lynch – NHS Property Services
52
Matt Grant – Practice Manager Forrest Medical Practice
Charles Lockw ood – Patient representative Foleshill
Kamal Mehta – Brow nsover Patients Action Group
Mike McCarthy – Brow nsover Patients Action Group
Helen Davis – Arcadis
Julie Morgan – Arcadis
Nikkie Temperley – Coventry & Rugby CCG
Saf Naw az – Coventry & Rugby CCG
The detailed outcome of this workshop including the attendee list is shown in Appendix 5 and summarised in the following sections.
4.2. Constraints
Constraints are issues that impact upon investment objectives and set the boundaries for the potential investment. The constraints identified for consideration are shown in table 13. These will aid in the identification of a short list of options for both Foleshill and Brownsover respectively:
Constraints – Foleshill Constraints - Brownsover
Provide a service that meets known growing patient capacity
Provide a service that meets known growing patient capacity
Provides a permanent solution to the delivery of GP services for the population of Foleshill
Provides a permanent solution to the delivery of GP services for the population of Brownsover
Table 13 Constraints
4.3. Benefits Criteria and Critical Success Factors
The following sections looks at the criteria used to review the service options. The points listed underneath each heading provide further detail of the issues that were taken into account during the assessment of when each option.
These benefits criteria and critical success factors are reflected in Table 14. It was agreed at the workshop that due to the similarity of each project the Benefit Criteria and Critical Success Factors for both schemes would be the same.
Benefit Criteria Critical Success Factor
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Benefit Criteria Critical Success Factor
Service delivery and future flexibility
Continuation of care provided to local residents
Reduced admissions to hospital
Reduced A & E attendances
Greater integration with other health-related services
Opportunity for increased range of services
Better sign posting for other health related services in the area
GP services in locality
Multi-use facilities
Ease of adaptability
Potential for additional capacity
Future flexibility on IT and Comms
Staffing Improved recruitment and retention
Improved working conditions for staff including safety
Ease of Implementation
Low procurement costs
Management/clinical time input minimised
Facilities operational by [date]
Strategic fit with local/national guidelines
All relevant statutory primary care guidance achieved
Culture
Supports the culture of the locality
Supports a culture and ethos within the building
Positive impact on the local economy
Teaching and training
Provision of appropriate teaching facilities
Compliance with requirements for training status
Table 14 – Foleshill and Brownsover Benefits Criteria and critical success factors
4.4. The long listed options
A long list of options has been identif ied for each scheme at a w orkshop. The summary can be seen in tables 15 and 16.
4.4.1. Foleshill long list options
Option Strengths Weaknesses
Outcome
Option 1 Do nothing – retain APMS provider in demountable and extend temporary planning permission
No action required.
Minimal additional costs.
Current accommodation unfit to cope with increase in regeneration growth.
No co-location or additional service opportunities due to restrictive site and accommodation.
Risk of closing new patient lists due to lack of appropriate accommodation.
Not shortlisted
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Option Strengths Weaknesses
Outcome
Land lease expired in December
2015 – to be extended date to be confirmed.
Land is reliant on Landlord /
Future operator of the pub accepting the leased facility in the car park.
Local Planning Authority will not
extend temporary planning permission indefinitely.
Lack of parking facilities causing issues with parking enforcement.
Issue with parents with
pushchairs, the elderly, poorly patients and disabled patients.
Option 2 Do Minimum - Refurbish and extend current demountable and extend the boundary
Increased clinical accommodation.
Potential for co-location Opportunities with local participants.
Configuration of internal space may lead to compromise in ability to accommodate extension and refurbishment.
External treatment of different storey heights to be considered.
Sustainability measures of future proofing existing building fabric may be compromised.
No land opportunity to extend boundary.
Disruption to service while new demountable is stacked on top of existing.
Land lease to expired in December 2015 – To be extended date to be confirmed.
Land is reliant on Landlord / Future operator of the pub accepting the leased facility in the car park.
Local Planning Authority could refuse to grant further extensions of temporary, or new planning permission.
Lack of parking facilities causing issues with parking enforcement.
Issue with parents with pushchairs, the elderly, poorly patients and disabled patients.
Continuing ability to meet CQC requirements.
Existing building has short life
Shortlist as a benchmark
55
Option Strengths Weaknesses
Outcome
span and therefore permanent solution would be required in an estimated 2 years’ time period.
Option 3 New building on Livingstone Road site (200m from current site)
Increased clinical accommodation.
Potential for co-location opportunities, integrating services that wrap around the patient enhancing patient comfort, safety and dignity.
Allows APMS to continue to use current surgery while new building constructed.
Site can be configured to allow further extension of building in the future as and when required.
Internal layouts can be designed following best practice guidelines for modern delivery of Primary Care.
More car parking spaces.
Opportunity to be part of wider site development including Social Care providers adding to Health and Wellbeing of community.
Continued level of patient choices.
Purpose built design.
CQC, DDA, Infection control requirements met.
Provides increased
capacity from planned housing.
Enhancement/regeneration of area.
Willingness of authorities to share goals.
Co-location opportunities with other local participants will increase car journeys and reduce number of parking spaces available.
Additional revenue implications for rent reimbursement.
CCC own land and have restrictions for its disposal.
Potential disruption on site while phased development is being constructed.
Time limit on land availability.
Shortlisted
Option 4 Locate the provider in another building within a
Quicker solution.
Minimal amount of investment required.
Search showed there was a lack of available accommodation.
Not shortlisted
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Option Strengths Weaknesses
Outcome
reasonable distance
Option 5 New building on an alternative site
Increased clinical accommodation.
Potential for co-location opportunities, integrating services that wrap around the patient enhancing patient comfort, safety and dignity.
Allows APMS to continue to use current surgery while new building constructed.
Site can be configured to allow further extension of building in the future as and when required.
Internal layouts can be designed following best practice guidelines for modern delivery of Primary Care.
More car parking spaces.
Opportunity to be part of wider site development including Social Care providers adding to Health and Wellbeing of community.
Continued level of patient choices.
Purpose built design.
CQC, DDA, Infection control requirements met.
Meeting increased capacity from planned housing.
Enhancement/regeneration of area.
Willingness of authorities to share goals.
Search has demonstrated lack of alternative sites.
Not shortlisted
Option 6 Moving patients (list dispersal) to
Speed of delivery. Insufficient capacity in surrounding areas.
Reduces patient choice.
Not Shortlisted
57
Option Strengths Weaknesses
Outcome
other surgeries
Option 7 Moving primary care into a secondary care environment (e.g. Acute)
Reduced requirement for capital investment.
Potential to deliver quickly.
Distance for patients to travel.
Capacity within secondary care facilities.
Promotes increase of visits to A&E.
Limits patient choice.
Limited appropriate capacity on acute site.
Not shortlisted
Option 8 Creating separate clinical and administrative space (staff hub and clinical hub)
Obtaining administration space cheaper.
Cause delays and issues with the service due to lack of availability of on-site staff.
Increase the pressure on GP’s due to lack of administrative support on site.
Increase in travel time.
Potential risk to staff and patient
security if insufficient admin staff on site to provide support.
Not shortlisted
Option 9 Larger facility – community ‘hub’
More services under one roof.
Co-location of services.
Increased clinical accommodation.
Potential for co-location opportunities, integrating services that wrap around the patient enhancing patient comfort, safety and dignity.
Allows APMS to continue to use current surgery while new building constructed.
Site can be configured to allow further extension of building in the future as and when required.
Internal layouts can be designed following best practice guidelines for modern delivery of Primary Care.
More car parking spaces.
Lack of land availability..
Similar hub or services available in the area already (City of Coventry Health Centre). The CoCHC is a large city centre development offering a variety of services to the population including the housing of 4 GP practices. The CoCHC is close to the proposed development and a number of services identified to move out of hospital are being delivered from the hub The Foleshill development will be considered a ‘spoke’ and the capacity is required to meet patient demand for access to primary care services in this area.
Lengthy timescales.
Not in line with the CCG commissioning strategy.
Not shortlisted
58
Option Strengths Weaknesses
Outcome
Opportunity to be part of
wider site development including Social Care providers adding to Health and Wellbeing of community.
Continued level of patient choices.
Purpose built design.
CQC, DDA, Infection control requirements met.
Meeting increased
capacity from planned housing.
Enhancement/regeneration of area.
Willingness of authorities to share goals.
Table 15: Foleshill Long list of options
4.4.2. Brownsover long list options
Option Strengths Weaknesses
Outcome
Option 1 Do nothing – provision the service at Lower Hillmorton Road
No disruptions to the current working environment.
No change management issues/management involvement within the new development proposal.
This option would be desirable for a very small number of patients who are able bodied and live very locally to each of the premises.
Configuration of internal space may be compromised to accommodate extension and refurbishment.
Sustainability measures of future proofing existing building fabric may be compromised.
No land opportunity to extend boundary.
Local Planning Authority
could refuse to grant further extensions of temporary, or new planning permission.
Lack of parking facilities
causing issues with parking enforcement.
Issue with parents with
pushchairs, the elderly, poorly patients and disabled patients.
Not shortlisted
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Option Strengths Weaknesses
Outcome
Risk to meeting CQC requirements.
We rent 2a Hillmorton
Road and the Landlord may not allow the service to continue beyond the current lease term.
Option 2 Re-negotiate the lease and refurbish rooms at Lower Hillmorton Road
Increased clinical accommodation.
Potential for co-location Opportunities with local participants.
Configuration of internal space may be compromised to accommodate extension and refurbishment.
Sustainability measures of future proofing existing building fabric may be compromised.
No land opportunity to extend boundary.
Local Planning Authority could refuse to grant further extensions of temporary, or new planning permission.
Lack of parking facilities causing issues with parking enforcement.
Issue with parents with pushchairs, the elderly, poorly patients and disabled patients.
Risk to meeting CQC requirements.
Existing building has short life span and therefore permanent solution would be required in an estimated 2 years’ time period.
Shortlisted as a benchmark
Option 3 New building Brownsover local centre
No restrictions to the overall design.
Ability to extend and future-proof services in the area.
Re-establish and strengthen the provision of general medical services in the Brownsover area.
Allow for patient population growth where
Co-location opportunities with other local participants will increase car journeys and reduce number of parking spaces available.
Additional revenue implications for rent reimbursement.
Shortlisted
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Option Strengths Weaknesses
Outcome
there is planned substantial residential housing development.
Collaborative community facilities in conjunction with Rugby Borough Council.
No decant facilities required.
Option 4 Locate the service in another building within a reasonable distance
Quicker solution
Minimal amount of investment required.
Possibility of using other buildings for minimum investment for short term needs.
Lack of space.
Would need a longer term solution if temporary short term solution was used.
Search was done but no available accommodation.
Not shortlisted
Option 5 New building on an alternative site
No restrictions to the overall design.
Ability to extend and future-proof services in the area.
Re-establish and strengthen the provision of general medical services in the Brownsover area.
Allow for patient population growth where there is planned substantial residential housing development.
Collaborative community facilities in conjunction with Rugby Borough Council.
No decant facilities required.
Site search identified a lack of alternative sites.
Not shortlisted
Option 6 Moving patients (list dispersal) to other surgeries
Speed of delivery.
Lack of spare capacity in Brownsover.
Reduces patient choice.
Not Shortlisted
Option 7 Moving primary care into a secondary care environment (e.g. Acute)
Potential to deliver quickly. Distance for patients to travel.
Lack of capacity within secondary care facilities.
Potentially promotes
Not shortlisted
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Option Strengths Weaknesses
Outcome
increase of visits to A&E.
Limits patient choice.
Option 8 Creating separate clinical and administrative space (staff hub and clinical hub)
Obtaining administration space cheaper.
Cause delays and issues with the service due to lack of availability of on-site staff.
Increase risks due to delays and potential to lose information.
Increase the pressure on GPs due to lack of administrative support on site.
Inefficient due to increased travel time.
Increased risk to staff and patient security due to lack of admin staff in site.
Not shortlisted
Larger facility – community ‘hub’
More services under one roof.
Co-location of services.
No restrictions to the overall design.
Ability to extend and future-proof services in the area.
Re-establish and strengthen the provision of general medical services in the Brownsover area.
Allow for patient population growth where there is planned substantial residential housing development.
Collaborative community facilities in conjunction with Rugby Borough Council.
No decant facilities required.
A facility is required to accommodate the increasing population on this side of Rugby. The Local Authority future plan highlights the growth in the area.
Similar hub or services are available in the area already.
Lengthy timescale for delivery.
Not in line with the CCG commissioning strategy.
Not shortlisted
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Option Strengths Weaknesses
Outcome
The Coventry and
Warwickshire STP proposals are seeking to improve out of hospital care, Rugby is a key focus for this. The aim is to prevent unplanned admissions to the hospital in Coventry. This facility offering a range of services will be key to meet demand locally.
Table 16: Brownsover Long list of options
4.5. Short-listed options
Following a detailed analysis against the constraints the options shown in tables 17 and 18 were shortlisted for each project.
Foleshill shortlisted options
Option 2. Do minimum, refurbish and extend current
demountable and extend the boundary
Option 3. New building on Livingstone Road site (200m
from current site)
Table 17 – Shortlisted Options Foleshill
Brownsover shortlisted options
Option 2. Do Minimum - Refurbish Low er Hillmorton
Road rooms
Option 3. New building on Brow nsover Local Centre
Table 18 – Shortlisted Options Brownsover
4.6. Qualitative Benefits Scoring
A non-financial option appraisal has been produced for the shortlisted options; the purpose of this w as to make an
assessment of the options against agreed benefit criteria. The options w ere review ed and agreed; criteria, and w eighting
w ere all assessed and agreed in advance of the scoring.
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The follow ing section looks at each project to identify the criteria used to review the service options and the w eighted
score against each criteria. The points listed underneath each heading provide further detail of the issues that w ere
taken into account w hen they each option is assessed against each criterion.
Criterion Dimensions Weighting
Service Delivery Flexibility
Ability to adapt
Meeting local needs
Accessibility
Meeting national targets
Ensuring best practice
Adjacencies with related services including support services
25
Estates related issues
Compliance with key standards
A workable footprint that
maximises patient flows and effectiveness
Running and maintenance costs
Patient privacy and dignity
Ensuring a pleasant working environment
15
Clinical Quality Provision of modern clinical accommodation to the highest standards
15
Staffing The ability to recruit, retain and
develop clinical and administrative staff
15
Teaching and Training
Provides support for the teaching and training aims of the practice
5
Ease of Implementation
Ensure continuity of services,
ensure smooth transition to new accommodation
Practicality and timeliness of implementation
10
Strategic Fit within National Priorities
NHS Plan targets
Waiting times
Service development in line with national initiatives
Integrated approach to care
Choose and book
48 Hour access to clinicians
Capacity and demand
Care management approach
New GP contract
10
Culture Support the culture of the practice
Impact on local economy
5
Total 100
Table 19: Weighted Criteria – Foleshill and Brownsover
An appraisal of the shortlisted options w as then undertaken against the non-financial criteria above. The criteria have
been w eighted to reflect their relative importance in respect of this project as show n in Table 19. Options w ere scored 1-
10 to produce a w eighted score. This score w as then moderated by the w orkshop participants to ensure the scoring w as
robust and comparable across all criteria.
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4.6.1. Foleshill
Foleshill
Benefit Criteria Weighting Option 2 – Do Minimum Option 3 – New Build
Raw
Score
Weig
hte
d
Score
Tota
l
Raw
Score
Weig
hte
d
Score
Tota
l
Service Delivery 25 4 25 100 8 25 200
Estates related issues
15 4 15 60 9 15 135
Clinical Quality 15 7 15 105 9 15 135
Staffing 15 6 15 90 9 15 135
Teaching and Training
5 4 5 20 9 5 45
Ease of implementation
10 3 10 30 8 10 80
Strategic fit within national priorities
5 4 5 20 8 5 40
Culture 10 2 10 20 8 10 80
Total 100 34 100 445 76 100 850
Table 20: Non-financial option scoring - Foleshill
The outcome of the non-financial option appraisal show s Option 3 as the highest ranking option, w ith a score of 850 out
of 1000. An explanation of the scoring for each option is detailed below in Table 21.
Option
Number Option details Weight score reasoning
2 Do minimum - Refurbish and extend Scored relatively w ell as a short term solution, although
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current demountable and extend the
boundary
this w ould not solve the future f lexibility needs,
Environmental quality w ould be compromised as services
w ould continue to located in pub car park
The risk of obtaining Planning permission to change to
permanent use w as considered substantial
There is an Inability to extend the boundary of the site and
therefore possibility of expansion is restricted
There is a risk of the pub car park becoming unavailable
should the land be sold to new ow ners
3 New building on Livingstone Road
site (200m from current site)
Scored high on all criteria, as it w as considered that the
provision of a new facility w ould provide the APMS w ith full
f lexibility for design and ability to continue providing
services w ithout disruption.
Scored low on practicality due to issues due to the need to
agree lease terms w ith AEP and CHP.
Table 21: Scoring Reasoning - Foleshill
A number of sensitivity scenario modelling have been carried out on the non-financial options appraisal;
Applying equal weights to the criteria,
Reducing the score of the highest weighted criteria to zero for the preferred option and;
Reversing the weights of each criteria so that teaching and training and culture became the most important with service delivery the least
The exercise concluded that none of the above impacted upon the overall scores or the ranking of options, indicating that
the results of the exercise are robust.
Option number Equal w eighting to the
criteria
Reducing highest w eight
criteria to 0 Reversed w eighting
2 425 345 413
3 850 650 850
Table 22 – Sensitivity analysis – Foleshill
4.6.2. Brownsover
Each of the options has been scored against the list of criteria using a sample scoring system of 1 – 10.
Taking the advantages and disadvantages into consideration for each option, the summary of this scoring exercise is shown in table 23 with the reasoning for the weighted score shown in table 24. Further details can be found in Appendix 5
66
Brownsover
Benefit Criteria Weighting Option 2 – Do Minimum
Option 3 – New Build
Raw
Score
Weig
hte
d
Score
Tota
l
Raw
score
Weig
hte
d
score
Tota
l
Service Delivery 25 3 25 75 8 25 200
Estates related issues 15 4 15 60 9 15 135
Clinical Quality 15 5 15 75 9 15 135
Staffing 15 5 15 75 9 15 135
Teaching and Training 5 4 5 20 9 5 45
Ease of implementation 10 4 10 40 8 10 80
Strategic fit within national priorities
5 4 5 20 8 5 40
Culture 10 3 10 30 9 10 90
Total 100 32 100 395 76 100 860
Table 23: Non-financial option scoring – Brownsover
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Option
Number Option details Weight score reasoning
2 Do minimum – Renegotiate the lease
and refurbish rooms at Low er
Hillmorton Road
Scored relatively w ell, although this is only a temporary
solution and w ould not solve the future f lexibility needs,
Inability to meet grow ing capacity
3 New building on Brow nsover local
centre
Scored high on all criterion, providing the full f lexibility for
design and ability to recommence GP services in the
Brow nsover locality.
Table 24: Scoring reasoning – Brownsover
Again a number of sensitivity analysis were carried out on the non-financial options appraisal;
Applying equal weights to the criteria,
Reducing the score of the highest weighted criteria to zero for the preferred option and;
Reversing the weights of each criteria so that teaching and training and culture became the most important with service delivery the least
The exercise concluded that none of the above impacted upon the overall scores or the ranking of options, indicating that
the results of the exercise are robust. This scoring and ranking is show n in Table 25
Option number Equal w eighting to the
criteria
Reducing highest
w eighted score to 0 Reversed w eighting
2 400 345 403
3 863 650 860
Table 25 Sensitivity analysis - Brownsover
4.7. Preferred option
4.7.1 Foleshill
The qualitative preferred option, is Option 3, to provide a new build development on the Livingstone Road site.
Figure 12 shows the proximity of the preferred site to the existing practice location. They are 0.2miles apart or a 4 minute walk, ensuring a reduced inconvenience to registered patients.
68
Figure 12: Livingstone Road site
4.7.2. Brownsover
The qualitative preferred option, is Option 3, to provide a new build development on the Brownsover Centre site.
Figure 13 shows the proximity of the preferred site to the existing caretaker practice location. The proposed building is located adjacent to the old branch surgery that closed in April 2015.
69
Figure 13: Brownsover Centre site
4.8. Quantitative benefits- economic appraisal
This section provides a detailed overview of the costs and benefits associated with each of the options and identifies the option which provides the greatest net economic benefit.
A discounted cash flow analysis of each of the options has been undertaken. This analysis assumes a 60 year time horizon and uses a discount rate of 3.5% for years 0 to 30 in line with the requirements of HM Treasury and the Green Book.
4.8.1. Methodology
A Generic Economic Model (GEM) is used to conduct the economic appraisal. This has been populated with the base data for each option.
It should be noted that capital cash flows exclude depreciation because this is not a cash payment. VAT is also excluded because it represents a transfer payment within the Government system. Irrecoverable VAT is recognized in the Financial (affordability) analysis but not in the economic case.
The key assumptions used in the economic appraisal analysis are summarised in table 26.
Issue Comment
General application
- All costs are set at 2016/17 prices.
- Cash f low s have been discounted over 60 years post operation Net Present
Cost (NPC) and Equivalent Annual Cost (EAC) results have been completed
for both options 2 and 3.
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Issue Comment
- Recoverable VAT has been excluded
- Capital charges are not included.
- Optimism Bias has been assumed at 25%.
- Life Cycle costs are based on a benchmarked cost from a portfolio of
LIFT Schemes of £21.29 per rm2 per annum.
Table 26 - Economic Appraisal Assumptions
4.8.2. Capital Costs
The technical advisers have calculated the capital costs for both projects using a standard schedule of accommodation (Section 5.5). The capital costs for the new build options are set out in Appendix 17a – 17d in the standard form OB forms. The following assumptions have been made when calculating the capital cost:
Departmental costs (Line 1 of OB1) have been estimated using Health Premises Cost Guide rates £m2
for HBN 11 guidance accommodation / functionality. These costs £m2 have been uplifted from BIS PUBSEC 173 (MIPs 480 as 2010 when published) to BIS PUBSEC 218 (2Q 2016). These costs include a 3% allowance (£64k) contribution to achieving BREEAM Excellent.
On-cost (external works, roads and drainage) at 14% of departmental costs. It is assumed neither site will have adverse conditions
A provisional regional location adjustment has been applied (-5%) that in in line with BIS forecasts for the Midlands region.
An allowance for project fees of 18% has been applied
Land values have been included as follows:
Brownsover - The land cost for the purposes of OBC assumes a land value of £280K, which will be provided in consideration for the provision of a community facility of circa 100m2 (GIA). Subject to the agreed market valuation, this will inform whether the facility will be provided as complete or shell and core. Land valuation is being independently assessed for NHS Property Services by Montague Evans.
Foleshill – £125,000 being the proportion of the site required for the health development
A £50k allowance to cover local planning applications has been included
10% allowances have been included for group 3 and 4 equipment. The assumption being all Group 1 & 2equipment is included in the departmental costs.
The ‘do minimum’ options are considered to be temporary, and the delay to provide a permanent solution creates a high risk of losing key sites. There is a view that whatever costs are incurred on the do minimum are ‘’sunk costs’ and there would still be a need to be out of the temporary facilities within 18 months. For this option the assumption is that that the costs below are relevant for the short term and then the capital costs for a new build will be incurred as per option 3.
The short term capital costs for the do minimum options are therefore calculated as follows: Foleshill - an application for temporary planning permission would be required (£15k). Planners would
require significant work if the current temporary facility is to remain in place longer term. This work could be in the region of £80k. The base for the current temporary facility is for single storey only and will not take an additional demountable
71
Brownsover – there are no short term capital costs. Any additional cost would be revenue and is set out in the section 4.8.3 below.
Table 27 sets out the capital cost assumptions per option.
Foleshill Brow nsover
Do-minimum – short
term costs New Build Do- Minimum New Build
Total capital cost
(excluding VAT and
inflation but
including optimism
bias)
95,000 3,552,908 Nil 3,746,658
Table 27– Capital costs
4.8.3. Revenue Costs of Short-listed Options
Tables 28 and 29 identify the relevant revenue costs per option for each scheme:
Revenue cost Do minimum
£
New Build
£
Rates 5,628 25,000
Utilities 10,000
Rent 19,000 (replaced in economic
appraisal by capital costs)
Table 28: Foleshill revenue costs
Revenue cost Do minimum
£
New Build
£
Rates 15,000 25,000
Bus Service 27,000
Rent 35,000 (replaced in economic
model by capital costs)
Utilities 5,100 10,000
Table 29 – Brownsover revenue costs
72
The revenue and capital cost inputs have been modelled to establish, for each option:
The Net Present Cost (NPC) of the discounted annual cash flows over the whole 60 year period;
The Equivalent Annual Costs (EAC), being an annualized equivalence of the NPC.
4.9. Net present cost results
The detailed economic appraisals for each option are attached at Appendix 6 and 7.
The economic ranking for each option is summarised in tables 30 and 31
Option
Net Present
Cost
£000s
Equivalent
Annual
Cost
£000s
Ranking
EAC Margin
above low est
£000s
EAC Margin
above low est
%
Do-Minimum 4,613 175 1 - -
New Build 4,790 184 2 9 4%
Table 30: Foleshill Economic rank ing of development options
Option
Net Present
Cost
£000s
Equivalent
Annual
Cost
£000s
Ranking
EAC Margin
above low est
£000s
EAC Margin
above low est
%
Do-Minimum 4,774 182 1
New Build 4,960 190 2 8 4%
Table 31: Brownsover Economic rank ing of development options
The above tables demonstrate that for both the Foleshill and Brownsover scheme, from a purely economic perspective the preferred option is the do-minimum. This appraisal does not take into consideration any of the quantitive benefits of each other which have been considered in section 4.7.
4.9.1. Risk appraisal
The short-listed options have been risk-adjusted to account for the ‘risk retained’ by the organisation under each option, these are shown in tables 32 and 33. For the purpose of this risk analysis, as it is a public sector comparator (see Chapter 5) that is being appraised, it has been assumed that the procurement route is a P21+ style contract. At FBC stage the risk appraisal will be determined by the specified procurement route, for example if it is determined that Brownsover will be procured via a 3pd an analysis will be undertaken to determine which risks are transferred to the private sector and which would remain with the NHS.
73
Option
Net Present
Cost
£000s
Risk NPV
£000s
Risk Adjusted
NPV £000s
Ranking
Margin
above low est
%
Do-Minimum 4,613 17 4,630 1 -
New Build 4,790 16.5 4,807 2 4%
Table 32: Foleshill Economic rank ing of development options risk adjusted
Option
Net Present
Cost
£000s
Risk NPV
£000s
Risk Adjusted
NPV £000s Ranking
Margin
above low est
%
Do-Minimum 4,774 16.8 4,791 1 -
New Build 4,960 17.4 4,978 2 4%
Table 33: Brownsover Economic rank ing of development options risk adjusted
The tables above demonstrate that when risk is considered in the quantitative appraisal the preferred option for each project remains the do-minimum proposal.
4.9.2. Sensitivity analysis
To understand the robustness of the economic appraisal a number of sensitivity analysis scenarios have been undertaken these scenarios are as follows:
4.9.2.1. Results of Changes in Costs
Table 34 and 35 show the revised NPVs for each option follow ing a series of scenario modelling.
Change in Costs (%)
Do Minimum
£’000
New Build
£’000
Scenario 1 – capital increase
10% 4,943 5,132
Scenario 2 – capital decrease
10% 4,309 4,419
Scenario 3 – revenue increase
10% 4,703 4,849
Scenario 4 – revenue
decrease 10% 4,524 4,669
Table 34: Foleshill – Sensitivity Scenarios
74
Change in Costs (%) Do Minimum
New Build
Scenario 1 – capital increase
10% 5,138 5,350
Scenario 2 – capital decrease
10% 4,534 4,703
Scenario 3 – revenue increase
10% 4,948 5,130
Scenario 4 – revenue
decrease 10% 4,736 5,060
Table 35: Brownsover – Sensitivity scenarios
4.9.2.2. Results of Sensitivity Analysis
For both Foleshill and Brownsover the ranking of each option does not change under any of the four scenarios. This demonstrates that ranking the do minimum option for each project as the preferred option is robust and is not affected by sensitivities.
4.9.3. Conclusions of Economic Appraisal
4.9.3.1. Foleshill
Since the non-financial and economic appraisals identified preferences for different options, the results of the two appraisals have been combined in order to establish the overall preferred option on the basis of a “benefits to cost” ratio test, this is shown in table 36.
Option Non-financial
scores
Risk adjusted
NPV Impact of
Option £000s
£000 NPV per
benefit point Rank
Margin of score
below highest %
Do Minimum 445 4,630 10.4 2 84.0%
New Build 850 4,807 5.6 1 -
Table 36: Foleshill Combined appraisal of options
This analysis confirms that when comparing a cost benefit analysis of the two options (i.e. amalgamating both the quantitative and qualitative appraisals, the new build is the preferred option scoring substantially higher than the do minimum option.
4.9.3.2. Brownsover
The outcome of the Brownsover non-financial and financial appraisal also identified preferences for different options, and therefore the results of the two appraisals have been combined in order to establish the overall preferred option on the basis of a “benefits to cost” ratio test. This is shown in table 37.
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Option Non-financial
scores
Risk adjusted
NPV Impact of
Option £000s
£000 NPV per
benefit point Rank
Margin of score
below highest %
Do-Minimum 395 4,791 12.1 2 108.6%
New Build 860 4,978 5.8 1 -
Table 37: Brownsover Combined appraisal of options
This analysis confirms that when comparing a cost benefit analysis of the two options (i.e. amalgamating both the quantitative and qualitative appraisals, the new build is the preferred option scoring substantially higher than the do minimum option.
4.10. The preferred option
Section 4.9 identified the preferred option for each scheme through the combining of the qualitative and quantitive analysis. The results of this cost benefit analysis are shown in Table 38.
Foleshill Brow nsover
Option 3, to provide a new build development on the
Livingstone Road site.
Option 3, to provide a new build development on the
Brow nsover Centre site.
Table 38: Preferred options
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5. The Commercial Case
5.1. Introduction
This sections sets out the commercial arrangements for the project identifying the procurement strategy for each project. It looks at the strategies for the provision of equipment and IM&T and identifies the key risks the projects faces and who is based placed to manage these risks.
5.2. Foleshill
Foleshill is located in the area covered by Arden Estates Partnership. Arden Estate Partnerships (AEP) is a Local Improvement Finance Trust Company (LIFTCo) which was set up by Government in 2003/4 to address inequalities in health and social care estate throughout Coventry and adjacent areas. Forty percent owned by a subsidiary of the Department of Health (Community Health Partnerships, CHP) and sixty percent through a private sector consortium gbConsortium2 Limited made up of Equitix and GB partnerships.
AEP provide a comprehensive range of services and works closely with local Commissioners and Providers, Public Sector Bodies from a national and local level, GPs as well as the Private, Voluntary and Independent (PVI) sector; from both a health and social care perspective. They are able to offer a full range of development and consultancy services direct to clients and can support at any stage of a project from Research and Development, Consultancy, Development, Project Management, through to Facilities Management.
As Foleshill is located in the geographical area covered by AEP, the project is covered by the LIFTCo exclusivity agreement. Therefore the project will be procured through AEP, unless:
AEP determine they do not want to proceed with the project; or
It is determined that it is not value for money for AEP to deliver the scheme.
For the scale of this development, the Department of Health Joint Development Group has determined that a Lease plus Agreement (LPA) synonymously linked to LIFTCos, was not appropriate for this scheme due to the high costs on fixed items such as legal, financial and future maintenance and lifecycle factors. A more commercial approach to a leased property has been requested by the Commissioners, having recently visited the newly completed third party development completed by AEP in Coventry. To this end the various procurement routes available to the NHS to deliver this development, have been appraised with the Commissioners. The conclusion of these options are shown in table 39.
Procurement option Review
Third party development Preferred option. Development company to take risk and fund themselves.
Allow s NHS England to control, and simplify the building contract structure.
Capital development NHS England have requested a revenue scheme.
LIFT development Fixed costs, legal documentation and construction methods in excess of an Full
Repairing and Insuring (FRI) lease model for size of development considered
too expensive.
GP-led development Due to nature of APMS contract, the practice is not in a position to take risk and
fund themselves.
Table 39: procurement option review
A meeting was held on 13 November 2015 between NHS England, Community Health Partnerships and NHS Property Services. At this meeting it was agreed that CHP would take the leading role in terms of
77
progressing the project from the perspective of NHS head tenant working with the third party developer (LIFTCo in this case).
5.2.1. Required services
AEP will provide Foleshill under a design and build contract that will culminate in a lease. It is unlikely AEP will provide soft FM* (Facilities Management), as in general this is provided by NHSPS on CHP LIFT buildings. At FBC stage it will be confirmed whether NHSPS will provide such services or that the GPs will have their own soft FM arrangements.
* Soft FM generically covers items such as cleaning, ground maintenance, pest control etc.
5.2.2. Potential for risk transfer
The general principle is that risks should be passed to ‘the party best able to manage them’, subject to value for money. This section provides an assessment of how the associated risks will be apportioned between the NHS and AEP. Table 40 shows the current risk transfer matrix.
Potential risk Risk management Risk allocation Risk to project
NHS England
approval refused
Early engagement w ith NHS England and
Coventry and Rugby CCG to determine
approval routes
NHS England Low
Inability to negotiate
appropriate terms
w ith the current
landow ners
Initial discussions have already taken place
w ith the vendor (Coventry City Council) and
Heads of Terms have been agreed.
AEP Very Low
Poor site / building
conditions
Site surveys have been carried to support the
Planning application and engineering solutions
have been developed and managed by AEP to
offset any risk.
AEP Low
Stakeholder
engagement
Communication is open and discussions are
on-going. This w ill ensure all stakeholder
requirements are met.
AEP Low
Changes to Design
follow ing Planning
Approval
The contract allow s for the variations by the
Head Tenant. AEP w ill manage variations in
the appropriate w ay as and w hen they occur
during Construction. Planning permission has
been granted.
AEP Medium
Project costs
incorrectly estimated
It is the responsibility of AEP to deliver the
project w ithin the bounds of the f inancial case
set out w ithin this document. It is also AEP’s
responsibility to ensure Value for Money is
achieved and signed off by the District Valuer.
A Price Tender Estimate has been produced to
show the robustness of the costs assumed.
AEP Low
Grow th in capacity
not achieved
Looking at additional service providers and
services NHS England Medium
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Potential risk Risk management Risk allocation Risk to project
Residential grow th and future proofing
Proposal does not
achieve Value for
Money
The rent proposed w ill have to satisfy the
District Valuer as providing Value for Money
and the costs incurred in getting to this stage
are carried by AEP.
AEP have recently completed a similar sized
scheme w ithin the City and w ill be bringing
experience to the Foleshill development.
AEP Low
Increased
Construction Costs
due to unforeseen
circumstances
These risks are carried by AEP w ith the
proposed rent agreed prior to commencement
of w orks on site. Any additional costs w ill fall to
AEP.
AEP Medium
Cost of additional
land is not recouped
through sale to third
party
AEP to continue discussions to reduce size of
plot to be purchased. AEP and CHP to w ork
w ith potential purchasers for surplus land.
NHS England Medium
GP rent is
unaffordable if current
high land purchase
cost is used in the
affordability
calculation
The cost of all of the site has been used in
each appraisal but there is the opportunity,
once f inal design is approved to reduce this
cost as it may be possible to sell on the
surplus site.
NHS England Medium
Unable to procure a
suitable APMS
provider
Look to procure early on in the development
stage
Soft market test to understand availability
NHS England High
Table 40: Foleshill risk transfer matrix
5.2.3. Proposed charging mechanisms
There is a commitment to deliver services from the facility for the length of the lease to be agreed. With such a strong commissioning intention, AEP secures private funding for each of their developments, and early discussions have been held with private funders to understand the covenant requirements of funding a third party development for an APMS contract. Advice has been provided through legal representatives of funders that an NHS body would be required to enter in to a Head Lease due to the nature of the APMS term of contract for a period of five years.
The current intention is to have a Tenants Internal Repairing lease with AEP, leaving the exterior lifecycle maintenance obligation with AEP. For the interior maintenance obligations, CHP would propose doing limited preventative FM and lifecycle works to manage the dilapidations risk at the end of the lease term. These would be charged back to the under tenants via the service charge, and would fund a sinking fund to smooth out the cash flow effects. The management of the works would either be delivered by CHP’s Property Management team, or sub-contracted back to AEP.
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5.2.4. Proposed contract length
AEP, will provide a formal lease for the whole building to CHP for a period of 25 years. The terms of this lease will need to be agreed between AEP, CHP and the District Valuer to ensure value for money. The terms of the lease may have an implication on the financial viability of the scheme if the term of the lease is reduced. This will be investigated further at FBC stage.
5.2.5. Proposed key contractual clauses
The land at Livingstone Road is, at the time of writing this report, under the ownership of Coventry City Council.
Several meetings have been facilitated by AEP and the landowners, Coventry City Council, over several years in respect of acquiring the site.
The land the new development will be built on at Livingstone Road is under the ownership of Coventry City Council. The site is significantly larger than that required purely for the health development. Discussions have therefore been under way with Coventry and Warwickshire Mind (CWMIND) who have indicated that they are willing to share the site. CWMIND have also indicated they are willing to purchase the whole site as they are in a position to move ahead in advance of health. The intention is therefore for CWMIND to progress with the purchase of the whole site for £425,000, with 0.38 acres of the site identified for health use at a cost of £125,000. The landowners have confirmed their intention to sell the freehold, subject to conditions set out below.
The conditions of the proposed sale are as follows:
£425,000 freehold for the whole site (£125,000k for the health element) subject to:
– Any covenants, rights, wayleaves, easements, quasi-easements and restrictions or other similar matters that may exist
– The freehold title is unregistered. A certificate of title will be given on completion in place of full deduction of title.
Non-refundable 10% deposit on exchange (£42,500)
The Purchaser must submit a full planning application for the change of use and the construction of the
D1 and C2 facility by no later than 24th December 2015. – This has been completed and the planning consent given (see appendix 8). This is shown at appendix 8
Completion is conditional on the following:-
– Detailed and approved planning permission being granted for a Class D1, and C2, use as defined by the Town & Country Planning (Use Classes) Order 1987 (as amended).
– Confirmation from Arden Estate Partnerships that NHS approval for funding has been secured for the construction of the medical centre which shall include formal approval and a copy of resolution. The conditions of acquisition is therefore linked to the approval of this Business Case.
The Purchaser will contribute towards the Vendor’s reasonable legal and surveyors costs associated with this transaction
There will be a restrictive covenant which will require the Purchaser to use part of the site for D1 use for a period of 10 years and there will be a prohibition on any dispositions unless the lessee/transferee enters into a Deed of Covenant to comply with the covenant. The covenant will be protected by a restriction on the title.
If after one year from exchange of contracts, the conditions have not been met the contract will be rescinded by the Vendor and the Vendor will have no further obligation to the Purchaser and the Vendor will be free to dispose of the Land as they choose
If the build of the medical centre is not commenced within 2 years from the date of completion the Council shall have the option to buy back that part of the land for the sum of £1.00 GBP
The proposed site plan used for the Planning submission is attached at Appendix 9. This plan is still in design and is subject to change. Planning consent has been given and is attached at Appendix 8
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The Council are requesting the NHS to submit a planning application in advance of exchanging Heads of Terms. To date the NHS has underwritten £100,000 of design fees to move this forward, and show commitment to the purchase of the land from the Council. To date £65,000 of these fees has been spent.
5.2.6. Personnel implications (including TUPE)
It is anticipated that the TUPE – Transfer of Undertakings (Protection of Employment) Regulations 1981 – will not apply to this investment.
5.2.7. Accounting treatment
The accounting treatment of the project is governed by a number of accounting standards. UK Generally Accepted Accounting Practice (GAAP) will govern the classification of the asset for the AEP and CHP. The accounting position for the Department of Health’s (DH) balance sheet, is governed by European System of National and Regional Accounts (ESA 2010). This replaces ESA95, and became effective from September 2014.
An accounting treatment opinion will be sought to clarify the treatment under ESA2010. It is currently anticipated that the asset will be off balance sheet for the DH. For Fundco and CHP the asset will be on balance sheet.
5.2.8. Public Consultation
Formal public consultation had taken place as part of LIFT Stage 1 approval in 2011 which subsequently did not progress. More recently a public consultation to support a Planning Application has also been undertaken in November 2015. Local engagement will continue as will meetings with Local Councillors who have been fully supportive to date and a planning application for a primary care facility has been approved. The Health and Wellbeing Board are supportive of the scheme and the Joint Co-Commissioning Board between the Local Authority and the CCG has supported the use for a social care on the preferred site.
5.3. Brownsover
The land for the proposed building in Brownsover is owned by the Council and they are making this available to the NHS at an estimated cost of £280,000 to the NHS for the purpose of the scheme.
The land held by Rugby Borough Council has been made available to accommodate a new surgery facility in Brownsover. An original Cabinet report in 2013 approved the in principle transfer of the land to the local GP as part of the original proposed GP led scheme. In December 2015 the Council confirmed with NHSE the current intention to deliver the scheme following the collapse of the original GP lead scheme and the Council confirmed that they continued to support the proposal and therefore were willing to maintain the land allocation.
The longstanding proposal has been that in lieu of a capital receipt for the site, the proposed development would provide approx. 100m2 new community facility and it has been confirmed by the Council that this requirement still stands. The completed community space would be owned and controlled by the Council.
On the basis of the above NHS Property Services, Acquisition and Disposal team have commenced discussions regarding proposed terms of the agreement with the main aspect being the documentation of land values against build costs for the construction of the community space. Although there is Cabinet approval in place, the Council still need to confirm the value of the transfer to satisfy the provisions set out on Section 123 of the Local Government Act 1973. The provision outlines that the Council should seek best consideration for the disposal of its assets and any deviation from this should be documented with an appropriate rationale. Assurance has been given by the council that this is a matter of reporting to Cabinet rather than seeking approval, however any difference in value will have to be explicitly reported.
The proposed build cost for the community space to offset against the land value is still to be ascertained.
Discussions are ongoing with Rugby Borough Council and a schedule of accommodation has been agreed within the 100m2 (GIA) allowance. The design solution will be assessed by the consultant team to provide the most efficient solution, current proposal is to provide a “completed” unit not shell only. NHS PS will continue to negotiate with RBC through the FBC development stage and the market valuation is agreed for
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the land. In the event that the land valuation is lower than the £280K, potential mitigation could be to defer to a shell only offer, this will be discussed and agreed by all parties including RBC, NHS E and C&R CCG.
5.3.1. Procurement Strategy
As Brownsover is not in a LIFT area it is proposed that the procurement for the Brownsover development is managed through NHS Property Services Ltd (NHSPS).
NHSPS is a limited company set up in 2013 and wholly owned by the Secretary of State for Health. NHS Property Services manages, maintains and improves NHS properties and facilities within their portfolio, their core business is those landlord and advisory services which most former primary care trust estates teams provided or managed.
NHSPS has considered a number of procurement options as shown in table 41.
Procurement option Review
Third party development Development company to fund.
Allow s NHS England to control, and simplify the building contract structure.
Cost to NHS funded through revenue. NHSPS w ill require letter of
commissioning requirements to underw rite Head lease.
Procurement could be through Community Health Partnerships using an
existing LIFTCO.
Capital development ETTF (Estates Transfer Technology Fund) may be available to fund this
project. In this case, the CCG w ould be bidding for funding to “mandate” over to
NHSPS via DH.
NHSPS may have access to customer capital to fund this project
LIFT development Outside of the LIFT geographical area
GP-led development Due to nature of APMS contract, the practice is not in a position to take risk and
fund themselves.
Table 41 NHSPS procurement options
Two options are therefore available to fund this project, a 3pd or NHS capital funding. Following detailed discussions between NHSE and NHSPs it has been determined that in the first instance the scheme will be funded through public capital. The appropriate lease arrangements will therefore be NHSPS acting as landlord, with providers as lease holders.
5.3.2. Planning permission
There is currently no planning consent in place for the land at Bow Fell for Brownsover, however, NHS Property Services are in active discussions with Rugby Borough Council who are fully supportive of the use of the site for a Primary Care facility. Appendix 29 shows a letter from the CCG’s to the council outlining funding commitment from Coventry and Warwickshire MIND (CWMIND) in respect of acquisition of the Foleshill site.
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5.3.3. Risk Transfer
The potential risk transfer will be determined by the final procurement route. If a 3pd route is pursued the risk transfer will be very similar to that for Foleshill see table 42. If it is determined that NHS capital is the preferred route the risk transfer will be as shown in table 43.
Potential risk Risk management Risk allocation Risk to project
NHS England
approval refused
Early engagement w ith NHS England and
Coventry and Rugby CCG to determine
approval routes
NHS England Low
Inability to negotiate
appropriate terms
w ith the current
landow ners
Ongoing discussions are taking place w ith
Rugby Borough Council (RBC). They continue
to support the scheme and require community
space w ithin the building in exchange for the
land. There are discussions betw een RBC
and NHSPS around land value v provision of
space. HOTs still to be drafted. RBC have
been included in events for stakeholders and a
representative did attend the DQI event
NHSPS Low
Poor site / building
conditions
Site surveys have been undertaken and the
results are aw aited. It is assumed good title
can be show n and that the property is not
subject to any unusual or onerous restrictions
etc as there are properties adjacent to this
piece of land.
NHSPS Low
Stakeholder
engagement
Communication is open and discussions are
on-going. This w ill ensure all stakeholder
requirements are met.
NHPS/NHSE Low
Changes to Design
follow ing Planning
Approval
The contract allow s for the variations by the
Head Tenant. NHSPS w ill manage variations
in the appropriate w ay as and w hen they occur
during Construction. Planning permission has
been granted.
NHSPS Medium
Project costs
incorrectly estimated
It is the responsibility of NHSPS to deliver the
project w ithin the bounds of the f inancial case
set out w ithin this document. It is also
NHSPS’s responsibility to ensure Value for
Money is achieved and signed off by the
District Valuer.
A Price Tender Estimate has been produced to
show the robustness of the costs assumed.
NHSPS Low
Grow th in capacity
not achieved
Looking at additional service providers and
services
Residential grow th and future proofing
NHS England Medium
Proposal does not
achieve Value for
Money
The rent proposed w ill have to satisfy the
District Valuer as providing Value for Money
and the costs incurred in getting to this stage
are carried by NHSPS.
NHSPS Low
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Potential risk Risk management Risk allocation Risk to project
Increased
Construction Costs
due to unforeseen
circumstances
These risks are carried by NHSPS w ith the
proposed rent agreed prior to commencement
of w orks on site. Any additional costs w ill fall to
NHSPS
NHSPS Medium
Unable to procure a
suitable APMS
provider
Look to procure early on in the development
stage
Soft market test to understand availability
NHS England High
Table 42: Brownsover example risk transfer matrix via 3pd route
Table 43: Brownsover risk transfer matrix example for NHSPS capital scheme
Risk Category Potential allocation
NHSE/NHSPS Shared
1. Design Risk
2. Construction and development risk
3. Transition and implementation risk
4. Availability and performance risk
5. Operating risk
6. Variability of revenue risks
7. Termination risks
8. Technology and obsolescence risks
9. Control risks
10. Residual value risks
11. Financing risks
12. Legislative risks
13. Other project risks
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5.4. Equipment Strategy
As the build contract for both projects will be for just design and build of the new health centres the tenants will be responsible for procurement of much of the medical fixtures and fittings, the loose furniture and any specialist equipment
The options for procuring this equipment are;
The tenants purchase each item at the most advantageous price on an item by item basis along with the relevant maintenance contracts.
The equipment requirements are collated together and a tender/fee proposal issued for a total equipping solution.
The equipment requirements are collated and provider of an equipping managed services is sought which will address the provision and maintenance of all equipment within the building. This is considered to be an unlikely approach due to the low value of equipment that will be required for the GP facilities.
A combination of the above.
This procurement process is included in the timeline for delivering this project and will need to commence in parallel with the build contract.
Where practical, it is planned to transfer equipment from the existing facilities to the new healthcare buildings. Where this is not practical, equipment will be procured, purchased, supplied, installed and commissioned, as to be set out in the Equipment Responsibility Matrix.
For the purposes of calculating the capital costs of the projects a prudent approach has been taken and it has been assumed there is no equipment transfer.
For Foleshill, AEP, and for Brownsover, NHSPS, will be required to enter into discussions with the tenants and will be responsible for ensuring environmental conditions, space and services installation supplies are appropriate for the equipment. For those items of equipment which AEP/NHSPS is responsible for supplying, installing and / or commissioning, such activities will form part of the Completion Tests required to be carried out by the Employer’s Agent in order for the DV to be satisfied on their appropriateness.
The procurement and choice of Furniture, Fittings and Equipment, will not be the sole responsibility of NHSPS/AEP. Input will be required from the tenants.
Working together NHSPS/AEP and the project teams will need to:-
Determine where transfer items can be removed from current position and moved to new facilities.
Ensure prompt payment of invoices to ensure that any prompt payment discounts are achieved.
Understand when the warranty period starts i.e. when equipment is brought into use or when delivered.
Ensure that any equipment is calibrated and electrically installed where necessary.
5.4.1. Equipment Identification and ERM – Equipment Responsibility Matrix
Table 44 sets out the different equipment groups, an explanation of the type of equipment that falls in each group and specific notes relating to the equipment group.
Equipment group Explanation
Group 1 Group 1 f ixed equipment to be included w ithin the building construction
cost (integral to the building and engineering installations) in respect of
supply, installation, & commissioning. These w ill include items including
engineering terminal outlets, supplied and f ixed w ithin the terms of the
building contract.
There may be items of Group 1 f ixed equipment, (to be determined) for
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Equipment group Explanation
w hich there are clinical considerations. Where applicable, the tenants w ill
provide input based equipment specif ication during the construction phase.
There may also be some Group 1 f ixed equipment items, (to be
determined) w hich w ill includes specialised equipment and may have
service requirements. These may be installed by third parties during the
construction or the commissioning phases. It is unlikely that such items w ill
be transferred from the existing healthcare facilities.
It is essential therefore that it is clear from the commencement of the
process as to the responsibility of selecting, procuring and installing items
based upon the attached groups.
Traditional Group 2 Items (all
items)
Items w hich have implications on space, building construction or
engineering services, and w hich are f ixed w ithin the terms of the building
contract but supplied under separate arrangements.
Items w ill be purchased and delivered to NHSPS/A EP for f ixing in the new
facilities.
Traditional Group 3 Items (all
items)
Outside the building contract, loose items of equipment supplied by the
tenants and w hich have a space implication. May have engineering
requirements. These w ill be funded from the 10% allow ance included in the
OB forms.
Traditional Group 4 Items (all
items)
Outside the building contract, w ill be required departmentally, but don’t
really have space implications. Have no effect on engineering
requirements. These w ill be funded from the 10% allow ance included in the
OB forms.
Table 44 Equipment groups
5.4.2. IMT Strategy
As the build contract will be for just design and build of the new health centre it is likely that tenants will be responsible for procurement of any IMT equipment/technology not directly included in the build of the new facility. An allowance for this has been included in the 10% equipment allowance.
5.5. Public Sector Comparator
5.5.1. Overview
A generic public sector comparator (PSC) has been developed for both the Foleshill and Brownsover schemes. This comparator will be used to compare against the 3pd proposal at FBC stage or used as a starting point for a capital funded scheme for Brownsover. The PSC is considered appropriate for both schemes to be able to use is as follows:
Both facilities are to provide primary care to a list size of 10,000 patients
Both facilities require a similar schedule of accommodation
Both facilities are to be designed to comply with all current good practice guidance
5.5.2. Generic Schedule of Accommodation
A generic schedule of accommodation has been developed for both schemes based on ‘Example schedules of accommodation for HBN 11-01 - 'Facilities for primary and community care services'. The assumption is that the facility should be sized to accommodate 10,000 patient list with 5 consult/exam rooms and 3
86
treatment rooms. A summary of the schedule of accommodation is shown in table 45 with more detailed versions shown at appendix 10 and 10a
Activity space
Primary care centre
Quantity Total area
m2
Public spaces, Entrance, reception, w aiting, WC's 41 118
Clinical spaces, consulting rooms, stores, clean/dirty utilities etc. 39 266.5
Staff spaces i.e. off ice areas 7 45.8
Staff support areas i.e. record stores, changing rooms etc. 42 128.1
Subtotal 560
Circulation space allowance 33% 185
Subtotal 745
Engineering allowance 5%
37
Total Estimate 782
Table 45: Generic Schedule of Accommodation
5.5.3. Capital Costs
A set of standard OB forms have been produced based on the generic Schedule of Accommodation. These have identified the costs shown in table 46.
Foleshill
£
Brownsover
£
Works Costs 1,918,178 1,918,178
Fees 345,273 345,273
Non Works costs 175,000 330,000
Equipment cost 177,530 177,530
Planning contingency 226,345 226,345
Sub – total 2,842,326 2,997,326
Optimism Bias 710,582 749,332
Inflation 179,422 189.206
VAT 677,411 718.118
87
Total 4,409,741 4,653,982
Table 46: Capital costs from OB forms
5.5.4. Design Principles
Drawing/design considerations
The drawings included in this OBC at appendix 11 - 16 are in the form of generic designs for a primary care health centre based on the SoA provided at appendix 10.
The approach is a linear building.
The clinical areas and their organisation is a key consideration but the plans have considerable flexibility should the spaces need to be moved around i.e. there are some shared spaces and receptions and shared utility space.
All drawings suit a volumetric construction solution, the cross section is 11.2m between the external walls with a c. 1.5m central corridor. In respect of the linear design these calculations produce an overall length (internally at gable walls) of 71m and a GIA of 795m2 GIA. This is slightly more than the SoA suggests but the project is at design stage so further detailed design will need to take place.
The key dimension is that between the external wall and the corridor wall which is 4.7m so in effect a 16m2 consulting or treatment room is 4.7m x 3.4m which is HBN compliant.
Spaces, particularly in the clinical areas have walls aligned that are likely to prevent cross joints from impinging on consult or treatment rooms, this is more likely however in the non-clinical areas. In staff spaces it is assumed that the continuous use and practitioner admin areas are in an open plan space with six desk areas of 6.6m2. Partitions could be included.
The drawing that places the accommodation over two floors follows the splits suggested by discussions with NHS England and other stakeholders and has the same setting out across the width as previously mentioned with the same central corridor. The design required two extra stores /spaces at 8m2 which is felt to be acceptable at the design concept stage.
BREEAM – Both facilities will be designed to meet BREEAM Excellent. Evidence to support this score will be provided at FBC stage. An appropriate allowance to achieve BREEAM Excellent has been included in the estimated capital costs
BIM – NHSPS and AEP have committed to design this facility to BIM Level 2. This will be evidenced at FBC stage
Both facilities will be designed to meet BREEAM Excellent and an appropriate allowance to achieve BREEAM Excellent has been included in the estimated capital costs
– BREEAM certification may only be undertaken by licensed assessors trained by the BRE
– Assessors produce a report outlining each projects performance against a series of the criteria – producing an overall BREEAM rating score
– A BREEAM assessment and pre construction design certificate will be required for each project as part of the FBC approval process
The OBC estates standards are based on compliance with HBN 11-01 - 'Facilities for primary and community care services' and HTM 05-03 FireCode. The design /drawings at FBC will be required to be signed off by the commissioners Approved fire safety advisor
The OBC estates standards are based on compliance with HBN 11-01 - 'Facilities for primary and community care services'. And HBN00-09 Infection Control in the Built Environment. The design /drawings at FBC will be required to be signed off by the commissioners Approved infection control advisor
The OBC estates standards are based on compliance with HBN 11-01 - 'Facilities for primary and community care services'. a) The design /drawings at FBC will be required to be signed off by the commissioners Approved nurse advisor in respect of compliance with Privacy and Dignity and by an approved nurse advisor and infection control advisor in respect of clinical and non-clinical adjacencies
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5.5.5. DQI
The Design Quality Indicator (DQI) is a toolkit to measure, evaluate and improve the design quality of buildings. To ensure good governance, involving stakeholders in creation of a robust design, the project will use this DQI tool for evaluation at different stages throughout the lifecycle. The first two evaluations; “The briefing stage” and the “Concept Design stage” took place at a workshop on 22nd April 2016. The event was well attended and given good feedback. A full report of the event and the attendance list can be seen at appendix 28. A provisional date in early 2017 has been set for the next DQI review. DQI Stage 2 will further develop the design brief and update any changes since Stage 1. The DQI Facilitator should be briefed on this and other key requirement to ensure the Stage review is a success. It is likely that new drawings will be required based on the Variant 2 preferred option and the commissioners will need to agree this with NHSPS and it is suggested share with CHP for the other project.
5.5.6. VOA checklist
As part of good practice and assurances a Valuation Office checklist has been completed for the business case.
DVS (part of the Valuation Office Agency) fulfils an essential and key role in the primary care development process. The role, acting on behalf on the NHS, is one of ensuring that best value for money is achieved from the project, whilst helping to ensure that the Developer’s design proposals comply with Department of Health, NHS England, Health Authority, Health and Safety Executive, HM Government and other applicable guidance and requirements, room sizes and efficiency of layout.
This document is to assist identification of the key areas of compliance during the development of the premises.
A completed VOA checklist for both schemes is attached at appendix 27. At this stage both CHP and NHSPS have signalled their intent to comply with the VOA requirements subject to the demonstration of value for money and affordability at FBC stage. The Checklist will be reviewed in line with the DQI stages.
5.5.7. Concept drawings
Concept drawings have been provided by Murphy Philipps and Laing construction as examples of the facilities that can be delivered for Foleshill and Brownsover with the following considerations:
The concept drawings have been based on the generic schedule of accommodation which is similar for both schemes.
The drawings have been produced with good design principles in mind
A linear approach has been taken to the design
These concept drawings formed the basis of discussions at the DQI event on 22nd April 2016
The concept drawings are available at the following Appendices:
Appendix 11 – Option 1 Foleshill/Brownsover
89
Appendix 12 – Option 1 Foleshill
Appendix 13 – Option 1 Brownsover
Appendix 14 – Option 2 Foleshill/Brownsover
Appendix 15 – Option 2 Foleshill
Appendix 16 – Option 2 Brownsover
5.5.8. Infection Control
The Infection Control Adviser to NHS England – West Midlands has reviewed the PSC drawings and has made the following comments:-
In terms of adjacencies the clean and dirty utilities are shown next to each, this is acceptable if they have entrances to each room off different corridors.
It would be preferential for the specimen WC to be located directly behind the dirty utility to enable the specimens to go directly into a dirty area.
Except for these two points the Infection Control Adviser has confirmed the proposals are in line with the guidance, however it should be noted that until both room data sheets and room loaded plans are received it is difficult to confirm whether or not all aspects of the control in the built environment have been included within the proposals. This next phase of the design process will ensure that the correct facilities are included and the correct materials used in terms of flooring, paint, etc. Particular attention will be paid to the ventilation requirements for each room which will depend on the functions being undertaken in them. This will all be confirmed once the design operational policy is developed with the users of the building.
5.5.9. Project synergies
It is anticipated that there will be significant synergies as a result of the joint development of the two schemes. These synergies could be derived, for example, from the following: • standardisation of the design • ability to use the same advisors • ability to share development costs NHS PS will continue to explore through the FBC stage all aspects of joint working to realise cost benefits to both schemes.
6. The Financial Case
6.1. Introduction
The purpose of this section is to set out firm financial implications and demonstrate the affordability of the project to the CCG and NHS England. It looks at the revenue and capital implications of the project and how these will be funded and by whom.
6.2. Sources of Capital Funding
The current capital cost of the schemes including VAT are as set out in table 47 and is supported by the OB forms attached as appendix 17a – 17b:
Foleshill Brownsover
90
£ £
Capital Cost incl VAT but excluding
Optimism bias and inflation 2,633,428 2,633,428
Land Cost incl VAT 150,000 336,000
Fees 345,273 345,273
Equipment 213,026 213,036
Source 3pd Funding 3pd Funding or NHS
capital
Table 47: Capital funding costs
The capital cost of the preferred option, at the FBC stage, this will be used as a benchmark Public Sector Comparator to compare against a 3pd proposal.
An equipment allowance of 10% has been allowed for furniture, fittings, equipment and telephony and IT. This cost will be minimised as far as possible by the transfer of any suitable existing equipment. Any IT or equipping costs that are not part of the building infrastructure will be subject to future bids agains t NHS England Capital and the ETTF
6.3. Overall revenue affordability
6.3.1. Clinical costs
The clinical costs for both projects remain as at present and will do so until the procurement of the APMS providers for both schemes. A separate business case will be produced at the time of the appointment of the new APMS providers, to demonstrate the affordability and value for money.
6.3.2. Foleshill
The new Foleshill Health Centre will be procured through CHP, with them taking the head lease. The
property will be leased by CHP directly to the APMS provider on a lease co-terminus with their service
contract. The lease will be tenant full repairing lease with the GPs being responsible for Soft FM
service under the tenancy.
NHS England have agreed and approved the additional rent reimbursement and associated costs
payable to the GP Practice under Primary Care Premises Costs Directions as detailed in the table 48.
The table also confirms the recurrent costs of occupying the existing centre vs. the recurrent costs of
occupying the new facility with the source of additional funding to cover the additional cost.
Current Costs
£
New Costs
£
Difference
£
Cost of occupation
Rent (Reimbursement
level) 19,000 108,500 89,500
Rates 5,628 25,000 19,372
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Water and clinical w aste - 10,000 10,000
Total Cost 24,628 143,500 118,872
Funded by
NHSE under PCD 24,628 143,500 118,872
Table 48: Recurrent Revenue Affordability. Source and application of funds
Working in partnership with CHP the commissioners have agreed that by extending the working hours
of the surgery that the gross internal area can be modelled at 627m2 and the net internal area of
564m2. The DV has confirmed that the lease cost of £108,500 based on a tenant’s internal repairing
lease is within the market level based on local valuation benchmarks. The summarised schedule of
accommodation is shown in Table 48a and detailed information can be seen in appendix 10 and 10a
Functional content Space requirements
Public spaces e.g. w aiting,
WC’s, reception etc. 114
Clinical spaces 203.5
Staff space 309.3
Total 626.8
Table 48a: Foleshill summarised schedule of accommodation
The rent reimbursement figures provided are exclusive of VAT. There is an assumption of the current
rate of 20% VAT recovery on the building development and VAT advice will be sought with regards to
the rent from APMS to ensure this is applied correctly.
This represents an increase in the revenue cost of the building of £118,872 per annum. Whilst this
does represent an increase in cost, it does reflect the need to accommodate more patients with the
increasing list size increasing to 10,000.
It also reflects the need to provide more modern, up to date facilities to meet current, future healthcare demands and meeting the demographic growth that has occurred in this area as explained in the Strategic Case.
NHS England has confirmed that as commissioners of the GP services, they will fund the additional rent reimbursement and associated costs per annum to the GP Practice. However the non-reimbursable costs (e.g. electricity and service charges) are not included above are not reimbursed under the Premises Cost Directions. These costs for the new building will met by the GP Practice and funded from the service contract payment they receive from commissioners.
Although NHS England reimburse the rent to the APMS provider, and will continue to in a new development subject to approval of this business case, the provider will see an increase in the facility management, running and operational costs of the new facility. The Head Tenant (CHP) may look to recoup additional charges from the provider for the above and will be taken forward as part of agreeing the sub-tenancy agreement.
There also a number of transitional, non-recurrent costs for the scheme as detailed in table 49.
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£’000
Non recurrent costs
Stamp Duty Land Tax 36,500
Legal Costs 10,000
Sub total 46,500
Funded by NHS England 46,500
Table 49 –Non recurrent costs
NHS England has confirmed that it will cover the cost up of non-recurring costs to a maximum of £50,000 which is at their discretion under Premises Costs Directions.
6.3.3. Brownsover
The new Brownsover Health Centre will be procured by NHS PS through either NHS PS Customer Capital. The property will be leased by NHS PS directly to the GP Practice on a lease co-terminous with the APMS contract on a tenant full repairing lease with the GP’s being responsible for FM services under the tenancy.
NHS England have agreed and approved the additional rent reimbursement and associated costs
payable to the GP Practice under Primary Care Premises Costs Directions as set out in Table 50. This
table also confirms the recurrent costs of occupying the existing centre vs. the recurrent costs of
occupying the new facility with the source of additional funding to cover the additional cost.
Current Costs
£
New Costs
£
Difference
£
Cost of occupation
Bus 27,000 0 -27,000
Rent (Reimbursement
level) 35,000 98,000 63,000
Rates 15,000 25,000 10,000
Water and clinical w aste 5,100 10,000 4,900
Total Cost 82,100 133,000 50,900
Funded by
NHSE under PCD 82,100 133,000 50,900
Table 50: Recurrent Revenue Affordability. Source and application of funds
Working in partnership with NHS Property Services the commissioners have agreed that by extending
the working hours of the surgery that the gross internal area can be modelled at 627m2 and the net
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internal area of 564m2 with the rent calculated at £174 per sqm. The DV has confirmed that the cost
per sqm is within the market level based on local valuation benchmarks. The summarised schedule of
accommodation is shown in Table 50a and detailed information can be seen in appendix 10 and 10a.
Functional content Space requirements
Public spaces e.g. w aiting,
WC’s, reception etc. 114
Clinical spaces 203.5
Staff space 309.3
Total 626.8
Table 50a: Brownsover summarised schedule of accommodation
The rent reimbursement figures provided are exclusive of VAT. There is an assumption of the current
rate of 20% VAT recovery on the building development and VAT advice will be sought with regards to
the rent from APMS to ensure this is applied correctly.
This represents an increase in the revenue cost of the building of £50,900 per annum. Whilst this does
represent an increase in cost, it does reflect the need to accommodate more patients with the
increasing list size increasing to 10,000.
It also reflects the need to provide more modern, up to date facilities to meet current, future healthcare
demands and meeting the demographic growth that has occurred in this area as explained in the
Strategic Case.
Foleshill has a higher additional revenue requirement than Brownsover, as the latter has higher
current costs due to:
• the current provision of a bus service
• current rents and rates are higher for Brownsover
• there is currently no reimbursement for water and clinical waste at Foleshill
NHS England has confirmed that as commissioners of the GP services, they will fund the additional
rent reimbursement and associated costs per annum to the GP Practice. However the non-
reimbursable costs (e.g. electricity and service charges) are not included above are not reimbursed
under the Premises Cost Directions. These costs for the new building will met by the GP Practice and
funded from the service contract payment they receive from commissioners.
Although NHS England reimburse the rent to the APMS provider, and will continue to in a new
development subject to approval of this business case, the provider will see an increase in the facility
management, running and operational costs of the new facility. The Head Tenant (CHP) may look to
recoup additional charges from the provider for the above and will be taken forward as part of agreeing
the sub-tenancy agreement.
There also a number of transitional, non-recurrent costs for the scheme as detailed in table 51.
£’000
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Non recurrent costs
Stamp Duty Land Tax 36,500
Legal Costs 10,000
Sub total 46,500
Funded by NHS England 46,500
Table 51 – Non recurrent costs
NHS England has confirmed that it will cover the cost of non-recurring costs up to a maximum of £50,000 which is at their discretion under Premises Costs Directions.
6.4. Shadow Public Sector Comparator Lease Cost
It is standard practice when using a public sector comparator (PSC) for a shadow lease cost to be calculated to demonstrate the affordability of the PSC. A number of workstreams have been undertaken to confirm the affordability of this shadow lease cost. These include:
Reviewing the PSC to determine if the schedule of accommodation can be value engineered and still
enable the delivery of the proposed services. This has been achieved by reducing admin and circulation space and assuming weekend working, thereby increasing the utilisation of the building. The resulting scheme has a minimum square meterage of 627m2.
Benchmarking of capital costs to compare HPCG costs against a P21+ benchmark cost of £1,821m2 and the average costs of 26 capital schemes. This has demonstrated that the capital cost is likely to be significantly less that that used in the PSC and will therefore contribute to a lower lease cost.
HPCG
£m
P21+ benchmark
£m
Average cost of 26 schemes
£m
Original PSC of 782m2 4,409,741 3,797,336 4,020,413
Revised PSC of 667m2 3,871,239 3,366,854 3,547,944
Revised PSC of 627m2 3,665,668 3,212,571 3,410,218
Table 52 – Foleshill Benchmark capital costs
HPCG
£m
P21+ benchmark
£m
Average cost of 26 schemes
£m
Original PSC of 782m2 4,653,982 3,928,852 4,380,413
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Revised PSC of 667m2 4,115,531 3,460,740 3,907,944
Revised PSC of 627m2 3,909,900 3,344,088 3,770,218
Table 53 – Brownsover Benchmark capital costs
Figures above are inclusive of all costs included in the OB Forms, i.e.:
Construction Costs
Equipment Costs
Location Factor
Planning Contingency
Optimism Bias
Inflation
Professional fees VAT
CHP and NHSP have undertaken an assessment of the proposed PSC to determine a shadow rent for the Foleshill and Brownsover schemes respectively. The assumption has been made that the resulting building will be for the value engineered schedule of accommodation (ie 627sqm) and it will be fully compliant with all NHS HBNs and HTMs and good practice design requirements. CHP have prepared their assessment with AEP, while NHSPS assessed the anticipated costs using their standard models.
6.4.1 Foleshill
CHP and AEP have worked up a number of appraisals to determine a shadow PSC. The preferred option is based on the smallest PSC option of 627m2, on the basis that this would represent better value of money to the NHS to provide the smallest building possible. The key points on the appraisal are set out below and with the detail attached in Appendix 18:
Land values have been based on the area required for the GP development. It has been agreed that the capital costs provided by CHP include for BREEAM excellent, this will
continue to be reviewed during the design development of the FBC and if the capital cost envelope is exceeded as a consequence of achieving Excellent, the impact of this will be discussed and agreed with NHS England and Coventry & Rugby CCG.
There are no additional enhancements from such items as S106 funds or pharmacy. If these occur they will contribute positively to the position
The proposed annual rent is £108,500 pa which supports the valuation provided by the DV (appendix 18)
6.4.2 Brownsover
NHSPS has undertaken a similar appraisal to CHP to determine a shadow PSC for Brownsover. The preferred option is again based on the smallest PSC option of 627m2. The key points on the appraisal are set out below:
The construction cost includes for an element of contingency / risk / optimism bias with the base costs being reflective of recent tender returns to NHS PS for similar sized buildings.
The proposed building will be single storey
It has been agreed that the capital costs provided by NHS Property Services include for BREEAM excellent, this will continue to be reviewed during the design development of the FBC and if the capital cost envelope is exceeded as a consequence of achieving Excellent, the impact of this will be discussed and agreed with NHS England and Coventry & Rugby CCG.
There are no significant abnormal ground conditions (bearing capacity or contamination for example) The land value is not less than the cost of building the community facility
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Rents based on the NHSPS methodology of market rent reviews rather than a capped annual RPI
rent increase of 2.5%
The initial NHSPS rent estimates differed considerably from the DV assessment (Appendix 19) which set the benchmark for value for money for the scheme at £172sqm and this led to a series of meetings with the DV, NHSE and NHSPS ) to establish why the difference and how this would be addressed. The outcome of these meetings is set out in Appendix 19a but in summary NHSPS confirmed that they were able to estimate a starting rent of £98,000 p.a. for the Brownsover scheme (reduced from £142.5k p.a.) based on the measures discussed in the meeting. As a further consequence of the review NHS PS confirmed that they remain committed to the provision of a building that is both compliant with the VOA checklist and provides for a BREEAM Excellent rated building. Any potential derogations that may arise as a consequence of the detailed design process at FBC stage will be fully reviewed, the implications discussed and any possible mitigation strategy agreed with NHS England / Coventry and Rugby CCG and the PAU, prior to incorporation into the scheme proposals
There are zero design derogations at OBC
For FBC the commissioners are required to ensure that any proposed derogations are recorded in a derogation register stating
The agreed standard (at OBC)
The proposed derogation
The reason for the proposed derogation
The effect of the proposal on cost, risk to users and which of the commissioner professional advisors review and recommendations for approval will be required from.
The derogation register for each project should be reviewed and signed on a monthly basis by the Project Director and Project Board as the FBC is produced
The derogation register must be closed prior to seeking commissioner Board approval.
It is advised that the commissioners seek PAU estates advice during the FBC stage on all proposed derogations to avoid the projects being delayed when FBC approval is sought
6.5. VAT Treatment
Foleshill
It will be the intention of AEP as Landlord, and CHP as the Head Tenant, to elect to Opt to Tax the building. CHP has made a blanket election over all the properties it occupies. This election has the effect of making VAT on construction costs recoverable. However, it also means that the Landlord and Head Tenant would charge VAT on the rent to their under tenants. The VAT charged to GPs is currently irrecoverable for medical practices.
Formal advice on VAT treatment will be obtained for the FBC.
Brownsover
It will be the intention of NHS PS as Landlord to review the option of electing to tax during the production of the FBC. Any positive selection has the effect of making VAT on construction costs recoverable. However it also means that the Landlord would charge VAT on the rent to the tenant. The VAT currently charged to GP’s is currently irrecoverable for medical practices.
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7. The Management Case
7.1. Introduction
This Section of the FBC explains how the Foleshill and Brownsover schemes will be governed, setting out the delegated authority actions required to ensure its successful delivery in accordance with best practice. It outlines the internal project structure for the projects in the context of the overall primary care development programme.
The governance arrangements detailed in this Section will be implemented immediately following approval of the OBC. These arrangements will replace any existing governance structure and will be in place until the opening of the new facilities.
7.2. Project management arrangements
Project management arrangements have been implemented for the Foleshill and Brownsover schemes to ensure their successful delivery and timely completion. The key tasks and deliverables that make up the developments are:
Design and construction of the new Foleshill primary care centre with all associated clinical and non-clinical support services
Design and construction of the new Brownsover primary care centre with all associated clinical and non-clinical support services
Relocation of primary care centres into the new facilities
7.2.1. Foleshill
The Foleshill project is led by NHS England, who have engaged Community Health Partnerships to support them as their delivery partner with Arden Estates Partnerships (AEP). AEP have a proven track record of developing Primary Care estate, with over £34m locally invested to date through five centres.
The project will be structured using PRINCE2 methodology. The reporting organisation and the reporting structure for the project is shown in figure 14
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Figure 14: Project organisation Foleshill
7.2.2. Brownsover
The Brownsover project is led by Coventry and Rugby CCG, who are working with NHSPS. NHSPS have a proven track record of developing Primary Care estate, since its formation in 2014.
The project will be structured using PRINCE2 methodology. The reporting organisation and the reporting structure for the project is shown in figure 15
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Figure 15 – Project Management structure Brownsover
7.3. Project plan
A development programme has been drawn up and agreed by all stakeholders, this is shown in table 54.
Milestone Target date
PID approval February 2016
High Level Options Appraisal Approval February 2016
Commence Stage 1/OBC March 2016
High level Design proposals March 2016
Completion of Stage 1/OBC Business Case May 2016
Stage 1/OBC Approvals as follow s:
CCG BOARD June 2016
NHS ENGLAND July 2016
CHP BOARD Sept 2016
Commence Stage 2/FBC Business Case Dec 2016
2nd
DQI event Feb 2017
Stage 2/FBC Approval June 2017
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Financial Close July 2017
Commence Construction August 2017
Building Operational June 2018
Post Project Evaluation August to Dec 2018
Table 54: Project Plan
7.4. Project Costs
A budget of £320,000 for scheme has been allowed for the fees associated with the delivery of the Foleshill and Brownsover Schemes. This has been underwritten by NHSE in the event that these schemes do not progress.
This budget will cover the following:
Legal and financial transaction advice
Development of the FBD
Development of the detailed design
Technical advice
District Valuer review
DQI assessment
It is anticipated that the £320k per project estimate will be reduced due to joint working by CHP and NHSPS, and their ability to exploit the benefits of delivering synergies by procuring the two schemes to a similar timescale and to a similar design and standard.
7.5. Use of special advisers
Special advisers will be for the development of the FBC used in a timely and cost-effective manner in accordance with the Treasury Guidance: Use of Special Advisers. It is envisaged that the advisers shown in table 55 will be required. The anticipated cost of this support is included in the project costs above.
Specialist Area
Financial
Technical (architectural, cost
management and M&E)
Procurement and legal
Business Case w riting
District Valuer
Table 55: special advisers
7.6. Outline arrangements for benefits realisation
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The Benefits Realisation Plan (BRP) describes the objectives and benefits associated with a project and how these benefits will be delivered. It ensures that the project is designed and managed in the right way to deliver quality and value benefits to patients, staff and local communities. The BRP also defines how and when outcomes and benefits are measured.
Key benefits identified are summarised in table 56 with further details shown at appendix 20
Benefit How benefit will be delivered
Strengthen capability of current service provision across core and non-core services
Provide modern facilities that meet modern standards to ensure current services are being delivered to a high standard.
Strengthen capability of current extensive service provision across core and non-core services
Provide modern facilities that meet modern standards to ensure current services are being delivered to a high standard.
Improved quality of care Reconfigure services and staff teams to reflect new model of care in new facilities
Clean and modern building Design of new facilities fully involved service users and providers
Increase the capacity of service provision to meet demand from an increased local population; and a growing list of patients
Facility allows for an increase in capacity of service provision to meet growing demography in the area locally in short, medium and long term. Match the new models of care for all patient groups. Allow flexible use of rooms for provision of services
Provide facilities that encourage the integration of health and social care, allowing for new working practices and subsequently providing working efficiencies
Improve functional relationships/adjacencies and increase operational efficiency to deliver better quality care.
Unsure size will allow or commissioning intensions
Reconfigure services including developing primary and community services to support the new service model. Good signposting to other local services essential.
Design incorporates flexible facilities
Facilities can be adapted for alternative future use.
Allocation of shared and flexible space within the facility to encourage shared working and resources.
Design flexibility to support foreseeable changes in service provision or need
The facilities meet the needs of the local population, therefore providing appropriate care and catering to increase in number of patients including, children, adolescents, vulnerable adults and the elderly
Waiting areas with appropriate facilities are provided to cater for all groups
Address "legacy" estates issues to provide a safe patient environment, i.e. Statutory compliance, Eliminate high-risk backlog maintenance
Facilities can be adapted for alternative future use.
Allocation of shared and flexible space within the facility to encourage shared working and resources.
Design flexibility to support foreseeable changes in service provision or need
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Benefit How benefit will be delivered
Ensure access to the facility remains "all inclusive", removing barriers to access and ensuring patients feel comfortable with their surroundings
The service offered from the premises will be all inclusive and every attempt will be made to ensure specific groups are catered for i.e. vulnerable groups and those with English as their second language etc.
The facilities provide a high degree of independence and self-care for those with special needs and disabilities.
Patient facilities accommodate the needs of independent wheelchair users.
Access between related services is not an impediment to people with disabilities
Improved facilities for staff and patients, assisting in recruitment and retention
Work towards national standards.
Maintain and improve wider care in the community.
Provide better staff working environment.
Teaching and training opportunities
Improved patient experience
Increase in access to a range of GMS services in one location with high staff awareness of local services and signposting for patients
Links with other services such as Adult Social Services, Children’s Social Services and the nearby schools and the Children’s Centre.
Providing health related sessions to the community utilising the community facilities being provided as part of the development.
A holistic approach to the community where the APMS service provider participates with other agencies in delivering good additional services to the community.
A place the local community can identify with have a sense of ownership
Good use of facilities by community, positive feedback from users
Effective care delivered by well trained staff Sufficient numbers of medical/clinical staff required in order to deliver appropriate service
Deliver the appropriate capacity and service requirements within necessary timescales and the cost estimates
· Agree brief with key stakeholders and ensure that project is delivered on time and to budget.
Continued engagement throughout design phases of project with stakeholders
Table 56 – key benefits
A copy of the project BRP is attached at appendix 20. This will be reviewed and updated during the development of the FBC
7.7. Outline arrangements for risk management
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The objective of the risk management process is to establish and maintain a “risk aware” culture that encourages on-going identification and assessment of project risks. Risk management is an essential part of the development of any project. Risk should be managed proactively through a process of identification, assessment and mitigation. The risk management strategy incorporates the following activities:
Identifying possible risks at an early stage and minimizing or mitigating these risks, via a risk log;
Allocating individuals responsible for each risk and a timeframe for completion;
Agreeing processes to monitor the risks and have access to reliable and up to date information;
Controls to mitigate against the consequences of the risks;
A robust decision making process supported by a framework of risk analysis and evaluation.
All members of the project team will play an active role in the identification, analysis, classification, allocation and mitigation of risks and escalating risk where appropriate to the Project Director.
Risks have been identified and compiled into a Project Risk Register, attached in appendix 21
The Risk Register will follow the same methodology recommended by the Department of Health and adopted by local NHS’ for corporate governance purposes. This will follow the below structure:
Risk identification and scoring from 1 to 5 of likelihood and impact;
Allocation of risk owner and identify mitigation procedures;
Evaluation of proximity, probability and impact of the risk occurring and colour coded by the traffic light system to highlight the overall risks;
Development of risk responses and agree management actions to prevent, reduce, transfer, mitigate or accept the risks. Focusing on the red and amber issues;
Plan and resource the response to the risks;
Monitor and report risk status.
The Risk Register will be reviewed on a regular basis by the Project Teams at a risk workshop; risks will also be assessed and discussed at each meeting where required. Risks will be scored as per a risk scoring matrix; risks of a pre-mitigation score of 16 or above will be escalated to the Programme Board on a monthly basis.
At present the key risks for both schemes include:
Business case approval refused
Inability to negotiate appropriate terms with current landowners
Poor site/building conditions
Growth in capacity not achieved
Interdependencies with other services not achieved
Project is unaffordable
Unable to secure a suitable APMS provider
Significant political and public interest could cause issues in completing this project within timescales
7.8. Outline arrangements for post project evaluation
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7.8.1. DQI, BIM, VOA, BRE
Figure 16 shows post project evaluation at a glance through the various stages of the project.
Figure 16: Post project evaluation at a glance
The CCG and NHS England are committed to ensuring that a thorough and robust post project evaluation is undertaken at key stages in the project, to ensure that positive lessons can be learnt. The lessons learned will be of benefit when undertaking future capital schemes.
Post Project Evaluation (PPE) also sets in place a framework within which the benefits realisation plan can be tested to identify which benefits have been achieved and which have not – with the reasons for these understood in a clear way.
Due to the healthcare element of this project, NHS guidance on PPE has been considered, this guidance is attached at appendix 22. The proposed approach will accord fully with this during the various evaluation stages. The key stages that will be evaluated are:
Implementation
Shortly after the new service has been brought on line
Once the service is well established
The following will be used to assess the effectiveness of the project at each stage:
BIM - Building information modelling is a process involving the generation and management of digital representations of physical and functional characteristics of places.
VOA - The Valuation Office Agency gives the government the valuations and property advice needed to support taxation and benefits. (see completed VOA form at appendix 27)
BRE - The Building Research Establishment carries out research, consultancy and testing for the construction and built environment sectors in the United Kingdom
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DQI - The Design Quality Indicator is a toolkit to measure, evaluate and improve the design quality of
buildings. A DQI event was held with key stakeholders on 22nd April 2016. The report and attendance list can be viewed at appendix 28
7.8.2. Implementation
The objective of this evaluation stage is to assess how well and effectively the project was managed from the business case process through to implementation, including the construction phase.
It will be undertaken using a 360º view of the process using internal and external stakeholders.
It is planned that this evaluation will take place within three months of opening of the primary care centres and will examine:
the effectiveness of the project management of the schemes – viewed internally and externally
communications and involvement during the project
the effectiveness of advisors used on the schemes
7.8.3. Evaluation of the project in use – shortly after commencement of service
It is proposed that this stage of the evaluation be undertaken between six and twelve months after the completion of the primary care centres, in order that many of the lessons learned are still fresh in the minds of the stakeholders. This stage of the evaluation will also encompass the evaluation of the scheme whilst in construction.
The objective of this stage is to prepare a report which assesses how well and effectively the projects were managed during the initial operation of the new facility. Again, the objective is to use a 360º view of the process using internal and external stakeholders.
The evaluation at this stage will examine:
The effectiveness of the project management of the scheme – viewed internally and externally.
communications and involvement during initial service
overall success factors for the project in terms of cost, time and quality
extent to which it is felt the new facilities meet users’ needs – from the point of view of service users/carers and staff
7.9. Evaluation once the service is well established
It is proposed that this evaluation is undertaken approximately two to three years following the establishment of the new facilities.
The objective of this stage will assess how well and effectively the projects were managed during the actual operation of the service. Again the objective is to use a 360º view of the process using internal and external stakeholders.
The evaluation at this stage will examine:
the effectiveness of the new cohesive working practices
the extent to which it is felt the design of the new facilities meets users’ needs – from the point of view of the staff, service users and carers
7.10. Management of the evaluation process and resources to deliver
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The process will be managed by the NHS England Project Director.
All evaluation reports will be completed within three months of the completion of the data collection. The results of each report will be made available to all participants in each stage of the evaluation and issued to key stakeholders.
The costs of the final post project evaluation, once the service is fully established, are not included in the costs set out in this OBC as it is assumed that this work will be undertaken in-house as part of the Project Director’s role.
7.11. Gateway review arrangements
The impacts/risks associated with the Foleshill and Brownsover projects have been scored against the risk potential assessment (RPA) for projects.
7.11.1. Foleshill
The Foleshill project has scored a medium RPA score due to the following issues:
further consideration to be given to governance arrangements to ensure involvement of NHS England, the CCG, CHP and other key stakeholders
service provision continues from a temporary location
there is an opportunity to create fit for purpose permanent accommodation, which will cater for a growing population.
The report is attached at Appendix 23
7.11.2. Brownsover
The Brownsover Project has scored a medium RPA score due to the following issues:
further consideration to be given to governance arrangements to ensure involvement of NHS England, the CCG, NHSPS and other key stakeholders
final agreement to the scope of the project
the project will deliver significant benefits and is a significant investment for the system
Regular project meetings to review the business case arrangements and ensure governance is in place
The report is attached at Appendix 24
7.12. Contingency plans
7.12.1. Foleshill
In the event of this project failing to proceed, the NHS would be unable to fulfil their contract with the APMS provider. Planning permission and the land lease for the existing demountable facility are only temporary and would require renewal. Patients would continue to be seen in a portacabin on the back of a pub car park, which is unsuitable for long term delivery of quality health care. This would continue to severely impact on patient services.
7.12.2. Brownsover
In the event of this project failing to proceed, primary care will be delivered from the former GP branch surgery; this will be a temporary measure on lease terms, and is restrictive in enabling modern healthcare services to be provided. The NHS would be unable to meet the increased demand for general medical services in this area.
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8. Conclusion
This OBC has been submitted to NHS England and the Coventry and Rugby CCG, asking for approval to develop full business cases for both the Foleshill and Brownsover schemes.
The key financial information for each scheme is shown in table 57.
Foleshill
£
Brownsover
£
Capital Cost of the complaint PSC
based on HPCG (including Optimism
bias, inflation and VAT)
4,409,741 4,653,982
Affordability Envelope set by DV for
rent on new building (627sqm) Based 108,500 98,000
Shadow Lease cost (627 sqm) 108.500 98,310
Non-recurrent costs 46,500 46,500
Project development costs 320,000 320,000
Table 57– Key financial information
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9. Appendices
Appendix No. Appendix name Link to document etc.
1 Project initiation document Foleshill Appendix 1 Revised
PID for Foleshill.doc
2 Project initiation document Brow nsover Appendix 2 Revised
PID for Brownsover.doc
3 Letter of support Foleshill
4 Letter of support Brow nsover
5 Slide pack from options appraisal w orkshop Appendix 5 Option
appraisal slides for F&B.pptx
6 Detailed economic appraisal – Foleshill Appendix 6
Foleshill GEM v3.xls
7 Detailed economic appraisal – Brow nsover Appendix 7
Brownsover GEM v1.xls
8 Planning consent for Foleshill
9 Concept draw ings for planning application for
Foleshill
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10 Generic schedule of accommodation Appendix 10
Rugby-primary care SOA 14th March 2016.xlsx
10a Schedule of accommodation based on reduced m2
(626 m2) Appendix 10a
Rugby-primary care SOA 626m2.xlsx
11 Concept draw ing Option 1 Foleshill/Brow nsover
12 Concept draw ing Option 1 Foleshill
13 Concept draw ing Option 1 Brow nsover
14 Concept draw ing Option 2 Foleshill/Brow nsover
15 Concept draw ing Option 2 Foleshill
16 Concept draw ing Option 2 Brow nsover
17a OB forms Foleshill (782m2)
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17b OB forms Foleshill (626m2)
17c OB forms Brow nsover (782m2)
17d OB forms Brow nsover (626m2)
18 Foleshill DV report
19 Brow nsover DV report
19a NHSPS Addendum Report Appendix 19a
NHSPS Addendum v9.doc
19b CHP Addendum Report
20 BRP Appendix 20
Benefits Realisation Plan (v1) .xlsx
21 Project risk register Appendix 21 RISK
REGISTER v3.xlsx
22 NHS guidance on PPE Appendix 22 Post
Project Evaluation guidance.docx
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23 RPA – Foleshill Appendix 23 Risk
Potential Assessment - Foleshill.doc
24 RPA - Brow nsover Appendix 24
Brownsover Risk Potential Assessment.doc
25 Planning consent for Foleshill demountable
26 Planning extension request for Foleshill
demountable
27 VOA form for both Foleshill and Brow nsover Appendix 27 DV
VOAQ.docx
28 DQI report and attendance list
29 Letter from CCG’s regarding site acquisition for
Brow nsover from CWMIND
30 OBC approval letter Foleshill to CHP from NHSE
31 DOF letter to NHSE confirming approval of
additional revenue consequences
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