FWT BUNDLE PROJECT - NHS Grampian · 6.1 Project Management 135 6.2 FWT Project Structure Concept...

FWT BUNDLE PROJECT

Forres Health and

Care Centre

Woodside Fountain Health Centre

Tain Health Centre

FULL BUSINESS CASE

1 MARCH 2013

NHS Grampian and NHS Highland FWT Bundle Project Full Business Case

21 January 2013

TABLE OF CONTENTS

Item Page No 1 EXECUTIVE SUMMARY 5 1.1 Introduction 5 1.2 Strategic Fit 5 1.3 Project Objectives 6 1.4 Option Appraisal 7 1.5 Economic Appraisal 9 1.6 Preferred Options and Sites 10 1.7 Planning Approval 10 1.8 Land Acquisition 11 1.9 The Procurement Process 11 1.10 The Preferred Lender, Financial Appraisal and Affordability 11 1.11 Risks 18 1.12 Equipment Procurement 20 1.13 Risk Analysis and Risk Management Strategy 20 1.14 Contractual Framework and Payment Mechanism 20 1.15 Key Stage Review 21 1.16 Project Management Arrangements 21 1.17 Benefits Realisation 22 1.18 Public and Staff Involvement 22 1.19 Conclusion/Next Steps 23 1.20 Sign Off 23 1.21 In Summary 23 2 THE STRATEGIC CASE 24 2.1 Introduction 24 2.2 Background and Strategic Context 24 2.3 Structure and Content of the Full Business Case 26 2.4 Business Strategy - National Context 26 2.5

Business Strategies - Local Context – NHS Grampian and NHS Highland

28

2.6 Overview of NHS Board Areas

39

2.7 Delivering the Strategy in Forres 44 2.7.8

2.7.9 2.7.10 2.7.11 2.7.12 2.7.13

Investment Objectives and Critical Success Factors Sustainability and Design Quality Objectives Existing Arrangements Business Scope Scope of Clinical Services Benefits

45 46 46 47 48 50

2.8 Delivering the Strategy in Woodside 51 2.8.6

2.8.7 2.8.8 2.8.9 2.8.10 2.8.11 2.8.12

Critical Success Factors Investment Objectives Sustainability and Design Quality Objectives Existing Service Arrangements Existing Premises Arrangements Business Scope Benefits

52 53 54 55 57 60 65

2.9 Delivering the Strategy in Tain 66 2.9.4

2.9.5 Critical Success Factors Investment Objectives

67 68


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2.9.6 2.9.7 2.9.8 2.9.9 2.9.10

Sustainability and Design Quality Objectives Existing Service Arrangements Existing Premises Arrangements Business Scope Benefits

71 72 74 78 81

2.10 FWT Bundle Risks 81 2.11 FWT Constraints and Dependencies 83 3 THE ECONOMIC CASE 85 3.1 Introduction 85 3.2 OBC Stage Shortlisted Options 86 3.3 OBC Stage Non-Financial Benefits Appraisal 87 3.4 Investment Appraisal/Value for Money Analysis 88 3.5 The Preferred Options 89 3.6 Risk Assessment 90 3.7 Development of Preferred Option - Forres 92 3.8 Development of Preferred Option - Woodside 93 3.9 Development of Preferred Option - Tain 94 3.10 Sustainability and Design Quality Objectives for the FWT

Bundle 96

4 THE COMMERCIAL CASE 102 4.1 Introduction 102 4.2 Scope and Services 102 4.3 Risk Allocation 104 4.4 Key Contractual Arrangements 106 4.5 Method of Payment 109 4.6 Personnel Arrangements 110 4.7 Implementation Timescales 110 5 THE FINANCIAL CASE 111 5.1 Introduction 111 5.2 Preferred Lender and hubCo Financial Modelling at

OBC/Stage 1 111

5.3 Preferred Lender and hubCo Financial Modelling at FBC 112 5.4 Technical Advisor’s Statement 113 5.5 Financial Advisor’s Statement 115 5.6 Key Stage Review (KSR) 115 5.7 Revenue Costs and Associated Funding for the Project 116 5.8 Capital Costs and Associated Funding for the Project 122 5.9 Comparison of OBC and FBC Revenue Costs 125 5.10 Comparison of OBC and FBC Capital Costs 128 5.11 Overall Affordability 130 5.12 Risks 131 5.13 Agreed Accountancy Treatment 133 6 THE MANAGEMENT CASE 135 6.1 Project Management 135 6.2 FWT Project Structure Concept to Operation 137 6.3 Roles and Responsibilities Concept to Operation 137 6.4 Roles and Responsibilities 144 6.5 Structure during Operation 147 6.6 External Advisors 149 6.7 Partnership Working 150 6.8 Change Management 150


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6.9 Benefits Realisation 151 6.10 Risk Management 152 6.11 Post Project Evaluation 155 6.12 Support from NHSG Boards 159

APPENDICIES 2a Forres OBC Addendum Approval Letter 2b Woodside OBC Approval Letter 2c Tain OBC Addendum Approval Letter 2d Letter of Stakeholder Support – Forres and Woodside 2e Letter of Stakeholder Support – Tain 2f Sustainability and Design Quality Objectives 2g Accommodation Schedule - Forres 2h Accommodation Schedule - Woodside 2i Accommodation Schedule - Tain 2j Risk Register 2k Risk Assessment Criteria 2l Public Stakeholder Involvement - Forres 2m Public Stakeholder Involvement - Woodside 2n Public Stakeholder Involvement - Tain 3a Drawings – Preferred Option - Forres 3b Drawings – Preferred Option - Woodside 3c Drawings – Preferred Option – Tain 4a Statements of ‘In Principle’ Agreement from GMS Practices 5a Revenue Consequences for Preferred Options 6a Benefits Realisation Plan - Forres 6b Benefits Realisation Plan - Woodside 6c Benefits Realisation Plan – Tain 6d Glossary of Terms

Page No 161 163 165 167 169 171 173 178 182 186 192 196 199 203 206 208 214 217 223 227 231 235 241


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1. EXECUTIVE SUMMARY 1.1 Introduction

1.1.1 The purpose of this document is to present the Full Business Case (FBC) to support the proposed investment to develop new premises for a range of primary and community services in the Grampian and Highland Health Board areas. The FBC includes the redevelopment of three Health Centres in Aberdeen, Forres and Tain. The projects are to be delivered using a single Design Build, Finance and Maintain (DBFM) bundled project with a single FBC and single SFT standard form Project Agreement covering two Health Board areas.

1.1.2 The three projects include the creation of the Forres Health and

Care Centre, the Woodside Fountain Health Centre and the Tain Health Centre. All three projects have Outline Business Case (OBC) approval from the Capital Investment Group (referred to hereafter as CIG) of the Scottish Government Health Directorate (referred to hereafter as SGHD). The OBC approvals authorise NHS Grampian and NHS Highland (referred to hereafter as NHSG and NHSH) to pursue the procurement of the three facilities through hub as a Design, Build, Finance and Maintain (DBFM) revenue funded solution. The three FWT Bundle projects are important to supporting delivery of the service strategy of both NHSG and NHSH. There is strong clinical and public support for these projects (see Appendix 2d, 2e, 2k, 2l and 2m).

1.2 Strategic Fit

1.2.1 The strategic context for all three projects from a national perspective is consistent. Planning of the proposed Health Centres has been taken forward in line with relevant national policy, local strategy and NHS guidance including:

• Better Health Better Care • NHSScotland Quality Strategy - Delivering Quality in

Primary Care Action Plan • Reshaping Care for Older People • NHSScotland Proposals for Integration of Adult Health and

Social Care (Consultation) in NHSG, already implemented in NHSH

• NHS Grampian Health Plan “Healthfit” • NHS Grampian Health and Care Framework • Aberdeen City Primary Care Development Programme • NHS Highland Corporate Objectives 2012/13 • Highland Quality Approach • Highland Health and Social Care Partnership Agreement

1.2.2 The financial and demographic context for the NHS in Scotland,

Highland and Grampian over the next 10-15 years has also been considered. The need for significant redesign of services with greater levels of need to be addressed in community settings and


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increased emphasis on anticipatory care, self-care, re-enablement and health improvement influencing the design.

1.2.3 National and local strategies describe the need to provide

appropriate community services so that care can be delivered as close as possible to people’s homes. NHS Grampian and NHS Highland are committed to improving access to services for the public. There is therefore a need to provide investment in appropriate building infrastructure in the community to help achieve the objectives laid out in the local strategies.

1.3 Project Objectives

1.3.1 Forres Health and Care Centre

This proposed development will facilitate improved access to all health and social care for the patient/client group with the greatest mobility problems at the new Health and Care Centre. Integration of health and social services will provide best value to patients based on the ‘one-stop shop’ principle. As many services as possible will be available at each visit, especially for those with chronic disease and through removing the artificial boundaries between secondary, primary and community care, further progress will be made in improving the scope and range of health care locally. The services required to meet the need for modern healthcare delivery, integrated with the extended primary healthcare and social care teams are as follows: • General Practitioner Services for the Forres area; • Integrated Primary Care Services where patients can

access a range of health and social services in one visit; • Integral X-Ray Service to Primary and Intermediate Care; • A Rehabilitation Service including clinical space for OT,

Physiotherapy and Podiatry; • A responsive Health and Social Care Team; • Outpatient Services; • Minor Injury service

1.3.2 Woodside Fountain Health Centre

The key objectives of the Woodside Fountain Health Centre Project are as follows: • To create fit for purpose facilities for the Woodside Medical

Group in a location suitable for the patient population served by the Practice and also co-locating the integrated Health and Social Care Team including the Community Nursing Team and the Social Care Team.

• To create fit for purpose facilities to deliver improved dental services to an area of the City where oral health and the availability of dental practices is known to be poor.


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1.3.3 Tain Health Centre

The clinical services which will be provided from any redevelopment will be focused on the needs of the local community, integrated with extended primary health and social care teams within the Tain area and other local GP surgeries and health centres. This will comprise the following core Clinical Services: • All existing GMS clinical services including minor surgery

provided from Tain Health Centre, in addition to Dental Services.

• Provision of Dental Services for the local community including those with additional support needs and those in marginalised and impoverished groups within a building that serves the needs of the local community and complies with current guidance and legislation.

• Potential for accommodating other health and social care professionals as part of a network approach.

1.4 Option Appraisal

1.4.1 Using option appraisal and analysis techniques, the project teams for each of the three projects led workshops to create a list of options, which were then taken through the investment appraisal process. This process scored and ranked, by number of points, each option according to their non-financial benefits.

1.4.2 The options taken forward to the investment appraisal for each

project are listed in Tables a, b and c below: Table a

Forres Short List Options Option 1 Do minimum upgrading works to existing building Option 2 Upgrade Leanchoil Hospital and co-locate Forres Health Centre on Hospital site Option 3 Replace Leanchoil Hospital and Forres Health Centre Option 4 Build new Community Health Centre

Table b

Woodside Short List Options Option 2 Do minimum (investment in structural and DDA

works) Option 3 Complete redevelopment of existing site Option 4a New build on site adjacent to Marquis Road


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Table c

Tain Short List Options Option 1 Do Nothing Option 2 Extend Health Centre Option 3 New Build

1.4.3 The Options Scoring Methodology

The option scoring exercises were undertaken for each project

across a range of time-scales, by different people and by two different Health Boards. As a result, the scoring criteria differ between the projects. A summary of the option scoring and ranking exercises for each of the three projects is shown below.

1.4.4 The Options Scoring and Ranking

The summarised scores and rankings for each option, together

with confirmation of the preferred option from the non-financial benefits appraisal, across the three projects are shown in Tables d, e and f below:

Table d

Forres Short List Options Score Rank Option 1 320 4 Option 2 375 3 Option 3 860 1 Option 4 845 2

1.4.5 Applying the benefits criteria ranking for Forres demonstrates

that the preferred option is Option 3 “build a new community hospital and health centre”. However, the economic appraisal and affordability demonstrates that the project which has the greatest value for money and which therefore became the preferred option, is Option 4 “New Build Community Health Centre”.

Table e

Woodside Short List Options Score Rank Option 2 250 3 Option 3 455 2 Option 4a 685 1

1.4.6 Applying the benefits criteria ranking for Woodside demonstrates

that the preferred option is Option 4a “new build on site adjacent to Marquis Road”.


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Table f

1.4.7 Applying the benefits criteria ranking for Tain demonstrates that the preferred option is Option 3 “new build”.

1.5 Economic Appraisal

1.5.1 The economic appraisal of each option is set in the context of the guidance provided in the Scottish Capital Investment Manual. Following the scoring of the non-financial benefits, a Generic Economic Model (GEM), using the discounted cashflow technique (DCF), was applied to the costs (exclusive of VAT and capital charges) to derive the comparative cost implications of each of the options in the form of Equivalent Annual Costs (EAC) and Net Present Costs (NPC).

1.5.2 Value for money is defined as the optimum solution in terms of

comparing qualitative benefits to costs. This analysis has been performed on an economic annual cost basis by dividing EAC by the weighted benefit points to arrive at a comparable economic appraisal, in line with HM treasury guidance, and the emergent preferred options are shown in section 1.5.3 below.

1.5.3 The Preferred Options

1.5.3.1 Table g below summarises the preferred options which have emerged from the economic appraisal exercise, approved by SGHD in the approved OBCs for all three projects.

Table g

Cost per Benefit Benefit

Preferred Options Score NPC £K EAC £K Point £

Forres - Option 4 New Build Community 845 6892 400 473 and Health Centre Woodside - Option 4a New Build Health Centre Adjacent to 685 6042 229 334 Marquis Road Tain - Option 3 New Build Health

Centre 2773 7195 307 111

Tain Short List Options Score Rank Option 1 1522 3 Option 2 1661 2 Option 3 2773 1


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1.5.3.2 Section 1.9 explains how the preferred options are being procured and Section 1.10 explains the situation in respect of the preferred lender and associated lending deal, as well as assessing the overall affordability of the projects.

1.6 Preferred Options and Sites

1.6.1 Forres

The preferred option is Option 3. A new build on the Grantown Road site, see Figure 15. 1:200 Plans for the preferred Option 4(a) are included in Appendix 3a.

1.6.2 Woodside

The preferred option is Option 4(a). A new build on the Marquis Road site close to the existing Woodside Community Centre, see Figure 16. 1:200 Plans for the preferred Option 4(a) are included in Appendix 3b.

1.6.3 Tain The preferred option is Option 3. A new build on the Craighill Terrace site, see Figure 17. 1:200 Plans for the preferred Option 3 are included in Appendix 3c.

1.7 Planning Approval

1.7.1 Forres Full planning consent for the development was granted in March 2012. The relocation of the existing football pitch is a condition of the consent and a Section 75 requires a financial contribution of £12k to public transport.

1.7.2 Woodside

Full planning consent for redevelopment of the Woodside Premises on the Marquis Road site was obtained from Aberdeen City Council in November 2011. A subsequent biomass planning application was submitted in November 2012. This planning consent is expected in January 2013.

1.7.3 Tain Full planning consent for the Tain Health Centre development was granted by Highland Council in June 2012. A Planning Gain Condition regarding payment of a contribution towards improved public transport services has been purified.


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1.8 Land Acquisition

1.8.1 Forres

The preferred site is in the ownership of NHSG on behalf of the Scottish Ministers. The missives for the purchase of the acquired site were exchanged with Moray Council in October 2009.

1.8.2 Woodside

The missives for the purchase of the Marquis Road site were exchanged on 30 November 2012 and are subject only to receipt of a satisfactory biomass planning consent.

1.8.3 Tain

Draft missives for the purchase of the site are being considered by Highland Council, the anticipated date of conclusion is 15 February 2013.

1.9 The Procurement Process

1.9.1 The hubCo route has been established to provide a strategic long-term programme approach in Scotland to the procurement of community-focused buildings that derive enhanced community benefit.

1.9.2 Delivery is provided through a joint venture company (hub North

Scotland Limited) which brings together local Public Sector Participants, Scottish Futures Trust (SFT) and a Private Sector Development Partner (PSDP).

1.9.3 The North Territory hubCo PSDP was confirmed in October 2010

as a consortium between Miller Corporate Holdings and Sweett Group (formerly Cyril Sweett Investments Limited). Contract close was achieved in January 2011.

1.9.4 The FWT Bundle Project will be developed as part of the FWT

(Forres, Woodside and Tain) Project with a single Project Agreement by a non recourse vehicle (referred to hereafter as Sub-hubCo) funded from senior and sub-debt underpinned by a 25 year service concession contract.

1.10 The Preferred Lender, Financial Appraisal and Affordability

1.10.1 The preferred options for the Forres, Woodside and Tain

projects are being taken forward as a single hubCo DBFM Service Concession Contract within NHS Scotland, utilising revenue funding.


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1.10.2 Preferred Lender and hubco Financial Modelling at

OBC/Stage 1

1.10.2.1 Hub North Scotland Ltd submitted financial model v0850 as part of their overall Stage 1 submission for inclusion in the Woodside OBC and Forres/Tain OBC addendums. This model uses the costs of the three preferred options to provide an indicative annual Unitary Charge cost, in advance of financial close.

1.10.2.2 The financial model proposed utilising funding for the

projects from the Co-op Bank. This resulted in a total annual Unitary Charge for the three projects at the base year 2013/14 of £…… and £…… in 2014/15, as the first year of operation. The estimated breakdown of the cost between the projects in the first year of operation is:

• Forres £…… • Woodside £…… • Tain £……

1.10.2.3 Indicative lending rates from Aviva, the lender for the

NHS Grampian “Health Village” project were better than those offered from the Co-op. However, due to uncertainty surrounding the ability of Aviva to provide funding at the intended financial close (their lending for these types of projects is currently capped by the FSA), it was deemed prudent to use the Co-op lending rates for Stage 1/OBC.

1.10.3 Preferred Lender and hubco Financial Modelling at FBC

1.10.3.1 Since the submission of the OBC and OBC addendums in October 2012, the Co-op bank has withdrawn from the market for long term financing of projects of this type. It is therefore the preference of the FWT Bundle Project Board to proceed with Aviva as the preferred lender. Details of the reasons for this and progress made to date are highlighted in sections 1.10.3.2 to 1.10.3.7 below.

1.10.3.2 During the two month period following the submission

of the OBC for approval, discussions commenced with Aviva to ascertain whether the FSA lending cap that has been imposed on them for the “Composite Trade Model” will be lifted before financial close. Were this to be the case, this would allow Aviva to provide the funding for the FWT Bundle project on the same basis as applied to the “Health Village” project. Aviva have confirmed that the lending cap is still in place at the time of writing of the FBC and that the issue is still under discussion with the FSA.


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1.10.3.3 As part of the discussions with Aviva, an alternate lending type – the “Capital Tax Variant Model” has emerged as a potential solution for proceeding with them as preferred lender, should the FSA lending cap remain in place as we approach Financial Close. This type of model was common in public sector revenue funded projects until around 2003 and is not subject to an FSA cap. It has been confirmed by Pricewaterhouse Coopers (PwC) that this funding route would have no impact on the accounting treatment of the contract under IFRIC 12 and by the Scottish Futures Trust that it would have no impact on the accounting treatment under ESA 95. It therefore offers the projects a realistic and achievable alternative funding source, given the programmed Financial Close in March 2013.

1.10.3.4 The Capital Tax Variant Model from Aviva is less tax

efficient than the preferred method of lending (as provided by Aviva for the Village project) and hubCo has indicated that the annual Unitary Charge resulting from this method will be higher as a result. Not withstanding this, hubCo have also indicated that the Unitary Charge under this form of lending would still be significantly lower than the Co-op deal which was outlined in the OBC.

1.10.3.5 However, due to the shortened programme to submit

the FBC and complete Financial Close prior to 31 March 2013, the construction costs for the FWT Bundle Project are still under review at this time and will not be confirmed until the 4 March, as part of the Stage 2 submission by hubCo. As a result of this, the financial model for the Capital Tax Variant Model (using Aviva) has also not yet been finalised. Work will continue to finalise the model in advance of financial close, on the assumption that the FSA lending cap for the original lending method remains in place.

1.10.3.6 The FWT Project Board, in consultation with SFT,

has therefore taken the decision to continue to use the Co-op lending terms for the FBC, as indicated by financial model v0850. It is considered to be too high a risk to use the interim financial model for the alternative funding method from Aviva (which indicates a reduced annual cost compared to the OBC Co-op deal) for the FBC, due to the possibility of final costs at Financial Close exceeding those within this interim model. Such a scenario would prevent the signing of the contract, since the costs would exceed the approved limit.

1.10.3.7 The OBC Co-op lending terms, although no longer

available, therefore become a cap, or “not to be


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exceeded cost” via the approved FBC. Hence, the deal ultimately agreed with Aviva (original or alternate lending method) at Financial Close must not exceed the original Co-op terms approved at OBC. The cap is therefore as laid out in section 1.10.2.2.

1.10.3.8 An update paper will be forwarded to the Scottish

Government Capital Investment Group in advance of their meeting on 26 February 2013, where this FBC will be considered. This paper will outline further progress made on the financial deal with Aviva and also provide an update on the costs which are being prepared for the Stage 2 submission.

1.10.3.9 The Boards’ Technical and Financial Advisors have

provided assurance, as far as is practicable at this stage, that the costs and lending deal presented at OBC and FBC represent value for money. The Boards will continue to work with their advisors to ensure that value for money is achieved throughout the process to Financial Close. The Financial Advisors have also provided assurance that the lending deals and rates being put forward by hubCo are representative of what they are seeing in the market-place.

1.10.4 Financial Appraisal and Affordability

1.10.4.1 The recurring revenue cost estimates assume that services are in place and available for use from April 2014. Tables h, i and j below show the breakdown of these by individual project.

Table h Forres Recurring Revenue Costs

Forres FBC £m Costs Unitary Charge …… Additional Depreciation (Equipment) 0.030 Other Scheme Costs (Net Additional) 0.021 Total Additional Scheme Costs …… Sources of Funding SGHD Unitary Charge …… GDS Non Cash Limited …… Third Parties (Practices, Social Work) …… Total Sources of Funding …… Board Funded Additional Revenue Costs ……


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Table i

Woodside Recurring Revenue Costs

Woodside FBC £m Costs Unitary Charge …… Additional Depreciation (Equipment) 0.018 Dental Salaries 0.060 Other Scheme Costs (Net Additional) 0.027 Total Additional Scheme Costs …… Sources of Funding SGHD Unitary Charge …… GDS Non Cash Limited …… Third Parties (Practices, Social Work) …… Total Sources of Funding …… Board Funded Additional Revenue Costs ……

Table j

Tain Recurring Revenue Costs

Tain FBC £m Costs Unitary Charge …… Additional Depreciation (Equipment) 0.032 Dental Salaries & Supplies 0.030 Other Scheme Costs (Net Additional) 0.127 Total Additional Scheme Costs …… Sources of Funding SGHD Unitary Charge …… GDS Non Cash Limited …… GMS/GDS Cash limited …… Third Parties (Practices) …… Total Sources of Funding …… Board Funded Additional Revenue Costs ……

1.10.4.2 Tables h, I and j above contain the total Predicted

Maximum Unitary Charge of £…… in 2014/15 as the first year of operation, which is allocated to the projects as; Forres £……, Woodside £…… and Tain £……. From the Stage 1 model, the collective


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proportions attributable to the SGHD and the NHS Boards are 90.1% and 9.9% respectively. Annual revenue support funding totaling a maximum of £……, indexed year on year for inflation is therefore requested from the SGHD. A full breakdown of the Unitary Charge and its associated funding can be found in section 5.6.3.

1.10.4.3 There are a number of issues which will/could impact

on the financial deal that is ultimately signed up to and the resultant annual Unitary Charge value:

• The lender and the lending rate will change

prior to FC. The current UC was derived using the OBC approved Co-op model. As indicated in section 1.10.3.1, this deal is no longer available and the costs above are therefore stated in the FBC as a “not to be exceeded” Unitary Charge. Discussions are on-going with Aviva as the preferred funder.

• The CAPEX for the projects is still under review as part of the Stage 2 process. Any change to this will impact on the funding required and thus the UC.

• Further technical review may result in a change to the lifecycle/facilities management component of the model and reduce the UC.

• Minor amendments may be expected to the hubCo fees in the model, which could have a marginal effect on the UC.

1.10.4.4 The additional building running costs have been

discussed with the five GP Practices. All of the Practices have indicated that they are willing to accept these additional costs, as a result of moving to larger premises. They have also signed statements of ‘Agreement in Principle’ with regard to the Occupational Agreement they will enter into following FC.

1.10.4.5 The Boards have included the additional revenue

costs above (£…… for NHS Highland and £f…… for NHS Grampian) in their financial plans.

1.10.4.6 Following discussion with the Chief Dental Officer,

NHS Highland has approval to proceed with the relocation of the existing Tain Salaried Dental Service, additional revenue cost £……. Additional service will be provided by a GDP Practice Partner (to be identified) and the GDP Partner will have an Occupation Agreement and fund the proportional fixed running costs of £……. NHS Grampian has submitted a business case for the £…… additional Dental service costs at Woodside.


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1.10.4.7 There will be non-recurring costs of £…… in total in relation to professional advisor fees, due to the complexity of the project being entered into and the shortening of the programme to Financial Close from July to March 2013. In addition, there will be costs of approx £…… in relation to commissioning costs. All of these costs have been included in the Boards’ financial plans. A breakdown of the advisor costs is shown in Table k below.

Table k

Forres Woodside Tain Total Advisors Fees at FBC £m £m £m £m Legal …… …… …… …… Technical …… …… …… …… Financial …… …… …… …… Insurance …… …… …… …… Total Fees …… …… …… ……

1.10.4.8 Table l indicates the capital requirement and its

associated sources of funding. Full details can be found in section 5.8.

Table l

Forres Woodside Tain Total Capital £m £m £m £m Costs Land & Fees …… …… …… …… Tain Access Road …… …… …… …… Equipment 0.298 0.175 0.319 0.090 Dental Equip - Non Cash Ltd 0 0.019 0 0.019 Sub Debt Investment …… …… …… …… External Advisor/Hub Support Costs …… …… …… …… OBC Preparation …… …… …… …… Capital Costs …… …… …… …… Sources of Funding Board Formula Capital …… …… …… …… Tain - Sale of Health Centre …… …… …… …… Dental Equip - Non Cash Ltd 0 0.019 0 0.019 SGHD Capital …… …… …… …… SGHD Hub Enabling …… …… …… …… SGHD Sub Debt Allocation …… …… …… …… Sources of Funding …… …… …… ……


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1.10.4.9 The DBFM contract is defined as a ‘Service Concession’ arrangement under International Financial Reporting Interpretation Committee Interpretation 12 (‘IFRIC 12’) and will be “on balance sheet” in NHS Grampian and NHS Highland accounts.

1.10.4.10 The contract and payment mechanism follows the

hub DBFM standard form which SFT has confirmed incorporates transfer of construction and availability risk in order to deliver a “private” classification under ESA95. The detailed accounting treatment is provided in section 5.13 of the FBC.

1.11 Risks 1.11.1 The FWT Bundle of three projects has a single risk register,

incorporating a list of risks that affect the overarching project and a list of specific risks for each of the three projects. The risk register has been developed in joint workshop sessions with hub North Scotland Ltd and are updated as changes to risks occur and new risks are identified.

1.11.2 There are currently 31 risks identified within the FWT Bundle

wide risk register that are open. None of these risks are categorised as “Red”. Six of the risks are rated in the “Amber” category (summarised below) and mitigation strategies are in place as far as is practicable. It is anticipated that the majority of these risks will be closed, or mitigated to reduced levels in the period leading up to Stage 2 submission and Financial Close.

1.11.3 The risks carrying the greatest impact are; the possibility that

funding terms at financial close exceed the buffer identified at FBC and/or that the preferred lender withdraws its offer. The market lending rates and lender commitment to the potential funding deal will be monitored during Stage 2 and up to financial close to identify such a situation as early as possible if it transpires.

1.11.4 The probability of the alternative funding deal from Aviva being

selected as the preferred option means that an additional risk is introduced. The Project Agreement documents will require some alteration by the respective legal teams as a result of this and there is therefore a risk that this cannot be completed in time to allow Financial Close. The legal teams and hubCo have however given an assurance that this will be completed as scheduled.

1.11.5 The other risks in the “Amber” category relate to the programme

not being achieved for the Stage 2 submission and approval and the likelihood of BREEAM “excellent” scores for the buildings not being achievable within budget.


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1.11.6 Project Specific Risks Forres There are 13 risks specific to Forres that are currently open.

Two of these risks are in the “Amber” category. The cost to replace the existing football pitch may exceed the

allowance included in the Stage 1 costs. Work to find an affordable solution that is acceptable to all is underway.

The other risk in the “Amber” category relates to the likelihood

that a BREEAM “excellent” rating will not be achieved within budget. It is proposed that a BREEAM score of “very good” is accepted.

Woodside There are 8 risks specific to Woodside that are currently open.

Two of these risks are in the “Amber” category: A formal letter is awaited from Aberdeen City Council on the

Biomass planning decision. Any delay in its receipt will delay purchase of the land for the development.



In addition to these, it should be noted that there is a risk of the

business case for the Non Cash Limited funding for additional Dental services being rejected by the SGHD, as indicated in section 5.6.2.6c.

Tain There are 11 risks specific to Tain that are currently open.

There are three risks in relation to Tain in the “Amber” category: Should an independent Dental practitioner not be found for the

additional space at Tain, then the running costs of that element of the building will fall to NHS Highland.

Another risk is in relation to the purchase of the land. This has

not yet been completed and the lender requires this to be completed in advance of financial close.




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1.11.7 The Unitary Charge figure will be partially subject to the impact

of inflation over the life of the contract with reference to the RPI. This is standard practice. The risk of movements in the RPI remains with the Board for the duration of the Project. The Board will deal with this from its allocated resources and reserves set aside for inflationary purposes. The project team will continue to monitor these risks and mitigate the impact.

1.12 Equipment Procurement

1.12.1 An ‘Equipment Responsibility Matrix’ has been prepared. This lists all equipment and specifies responsibility between Sub-hubCo, NHSG and NHSH in terms of supply, installation, maintenance and replacement over the course of the operational period.

1.12.2 £0.473 million is included in the NHSG Capital Plan from a

specific SGHD allocation in 2013/14, to cover the cost of group 2, 3 and 4 equipment for the projects. The capital equipment requirement for Tain is £0.319m. The Tain equipment will be funded from the Net Book Value Benefit of the current Tain Health Centre site, which will be realised upon its sale. There is likely to be a delay between purchase of equipment and sale of the property. NHS Highland will therefore fund the purchase of the equipment from its SGHD Formula Capital funding in the interim period.

1.13 Risk Analysis and Risk Management Strategy

1.13.1 The FWT Project follows well established risk management strategy. A project structure has been established where escalated risks are actively managed by the NHS Project Team as described in the Project Structure.

1.13.2 Since OBC approval a number of risk workshops have been

conducted to identify the retained risks inherent in the project. During the FBC stage the Project Team has created a revised Risk Register, the most recent is included (see Appendix 2j).

1.13.3 The risk management strategy will be to regularly review the Risk

Register to continue to minimise the level of risk and ultimately control the risk through agreed management strategies. Risk reviews will be undertaken jointly with hubCo throughout the life of the project.

1.14 Contractual Framework and Payment Mechanism

1.14.1 The contractual agreement is based on the SFT's hub standard form Design, Build, Finance, Maintain (DBFM) contract (the “Project Agreement”). The Project Agreement is signed at Financial Close. Following this, NHSG and NHSH will enter into Occupation Agreements with the five GMS Medical Practices


21 January 2013

regarding their occupation of space within the new Health Centres.

1.14.2 The Project Agreement term will be 25 years. The sites will

remain in ownership of the NHS throughout the term, on expiry of the Project Agreement the FWT facilities will revert to NHSG and NHSH at no cost to the Boards on behalf of the Scottish Ministers.

1.14.3 Sub-hubCo is responsible for hard FM services (e.g. structural

and external maintenance i.e. lifts, boilers, etc.) relating to the facilities. The financial model for the project includes capital sums attributable to life cycle replacement of fixtures, fittings and equipment within the facilities for the duration of the Project Agreement. Soft FM services (e.g. portering, domestic services and grounds maintenance) will be provided by NHS.

1.14.4 A Standard Contract form of Payment Mechanism is adopted

within the Project Agreement with specific amendments to reflect the relative size of the project and the needs of the services as described in the Authority’s Requirements.

1.14.5 NHSG and NHSH will pay the Annual Service Payment to Sub-

hubCo on a monthly basis, calculated subject to appropriate performance adjustments. The Annual Service Payment is subject to annual indexation by reference to the retail prices index published by the Government’s National Statistics Office.

1.14.6 Costs such as utilities usage charges and operational insurance

premiums will be treated as pass through costs and, as such, added to the Monthly Service Payment as applicable. In addition, NHS is directly responsible for all telephone and broadband charges and local authority rates.

1.15 Key Stage Review

1.15.1 As part of the governance process for hubCo DBFM projects, there is a requirement to participate in three SFT KSRs at key stages up to Financial Close.

1.15.2 The NPR and Stage 1 KSRs for the FWT Bundle Project are

approved. The Stage 2 KSR will require to be approved in March 2013 in advance of Financial Close.

1.16 Project Management Arrangements

1.16.1 A Project Programme has been agreed, that will bring the new FWT Health Centres into operation in April 2014. Robust project management plans have been developed to implement the preferred option on time and to specification. Project roles have been identified and allocated to appropriately experienced personnel. Remits have been specified for project groups and project organisational charts have been approved. These are included in Section 6 of the FBC.


21 January 2013

1.16.2 The relationship between the specific project groups and standing Committees of NHSG and NHSH such as the Asset Management Group (AMG) or Operational Management Team (OMT) have been described are consistent with the governance and assurance policies of NHSG and NHSH.

1.16.3 The project management structure has been developed to take

account of the three phases - concept to Financial Close, contract close to operation and throughout the operational term of the Project Agreement.

1.16.4 The NHS and hubCo will jointly appoint an independent tester

who will perform an agreed scope of work to ensure compliance with the Authority’s Construction Requirements and completion criteria as per the agreed programme.

1.16.5 NHSG and NHSH will identify a Contract Manager who will be

involved during the construction phase and will manage the contract throughout the operating phase.

1.16.6 NHSG and NHSH will continue to be supported by a team of

external advisors (legal, financial and technical) throughout the project to Financial Close and then as required through the construction phase. This will reduce to ad hoc support during the operational phase. SFT retain responsibility for managing and agreeing any changes to the new standard form DBFM Project Agreement and will continue to give support to NHSG and NHSH until the operational phase is commenced.

1.17 Benefits Realisation

1.17.1 The guidance for NHS Scotland Health Boards in using Benefits

Realisation Management has been followed and the associated toolkit is being adopted. The key benefits and measures are outlined in section 6.9 and in appendices 6a – 6c.

1.17.2 Current service providers and service users are clear that

immediate benefits of a new building would include greatly increased opportunities for co-located health and social care staff, services becoming more integrated, working closer to the patient and adopting a strengths based, preventative and anticipatory focused care and treatment. Protection of the patient facing role of clinicians is essential and improving ways of working to support clear patient care pathways will be central to service user’s engagement in both primary medical and dental services.

1.17.3 The performance measures identified within the Benefits

Management Plan will be reviewed as part of the Project Evaluation Plan.

1.18 Public and Staff Involvement

1.18.1 Staff, patients and members of the public have been involved in the development of all three projects. There is a high level of


21 January 2013

public support for the development of these projects. Appendix 2l, 2m and 2n summarise public/patient involvement to date.

1.19 Conclusion/Next Steps

1.19.1 The FWT FBC will be formally considered by the AMGs of NHSG

and NHSH in January 2013 and thereafter by the Boards of NHSG and NHSH on 5 February 2013. If approved the FBC will be formally considered by CIG at SGHD on 26 February 2013.

1.19.2 If approved, Stage 2 is scheduled to be complete on 4 March

2013. The Stage 2 KSR will be completed by SFT by 11 March 2013 and, assuming an approved KSR, Financial Close will be scheduled for during the week of 18 March 2013 with start on site for all three projects on 15 April 2013.

1.20 Sign Off

1.20.1 The FWT Project FBC is signed off by the NHSG and NHSH Chairs and Chief Executives on behalf of the NHSG and NHSH Boards, for submission to the Scottish Government for FBC approval and permission to proceed to Financial Close.

Cllr Bill Howatson Mr Richard Carey Chairman Chief Executive NHS Grampian NHS Grampian Mr Garry Coutts Ms Elaine Mead Chairman Chief Executive NHS Highland NHS Highland

1.21 In Summary

The FWT Bundle Project FBC:

• Delivers value for money • Is affordable to NHS Grampian and NHS Highland • Is consistent with the strategic aims of NHS Grampian and

NHS Highland • Has been designed to comply with the Project Brief • Has wide stakeholder support • Will deliver a reduction in overall carbon emissions.


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2. THE STRATEGIC CASE 2.1 Introduction

2.1.1 The purpose of this document is to present the Full Business

Case (FBC) to support the proposed investment to develop new premises for a range of primary and community services in the Grampian and Highland Health Board areas. The FBC includes the redevelopment of three Health Centres in Aberdeen, Forres and Tain. The projects are to be delivered using a single Design Build, Finance and Maintain (DBFM) bundled project with a single FBC and single SFT standard form Project Agreement covering two Health Board areas.

2.1.2 The three projects include the creation of the Forres Health and

Care Centre, the Woodside Fountain Health Centre and the Tain Health Centre. All three projects have Outline Business Case (OBC) approval from the Capital Investment Group (referred to hereafter as CIG) of the Scottish Government Health Directorate (referred to hereafter as SGHD). The OBC approvals authorise NHS Grampian and NHS Highland (referred to hereafter as NHSG and NHSH) to pursue the procurement of the three facilities through hub as a Design, Build, Finance and Maintain (DBFM) revenue funded solution. The three FWT Bundle projects are important to supporting delivery of the service strategy of both NHSG and NHSH. There is strong clinical and public support for these projects (see Appendix 2d, 2e, 2k, 2l and 2m).

2.1.3 The Forres project received OBC CIG approval in April 2011 and

OBC Addendum approval in November 2012 (see appendix 2a). The Woodside project received OBC CIG approval in November 2012 (see appendix 2b) and the Tain project received OBC CIG approval in July 2011 and OBC Addendum approval in November 2012 (see appendix 2c).

2.1.4 The approved OBCs identified the preferred option and

procurement route for each of the three projects they also assessed value for money, affordability and achievability. The purpose of this document is to present the Full Business Case (FBC) for provision of the three Health Centres (referred hereafter to as the FWT Bundle Project).

2.2 Background and Strategic Context

2.2.1 This strategic section will seek to summarise the strategic context for all three projects mindful of the fact that they involve two separate Health Board areas, NHSH and NHSG. Additionally all three projects were presented as separate projects at Initial Agreement and OBC stage and are now presented as a single FBC.

2.2.2 The strategic context for all three projects from a national

perspective is consistent. Planning of the proposed Health


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Centres has been taken forward in line with relevant national policy, local strategy and NHS guidance including:

• Better Health Better Care • NHSScotland Quality Strategy - Delivering Quality in

Primary Care Action Plan • Reshaping Care for Older People • NHSScotland Proposals for Integration of Adult Health and

Social Care (Consultation) in NHSG, already implemented in NHSH

• NHS Grampian Health Plan “Healthfit” • NHS Grampian Health and Care Framework • Aberdeen City Primary Care Development Programme • NHS Highland Corporate Objectives 2012/13 • Highland Quality Approach • Highland Health and Social Care Partnership Agreement

2.2.3 The financial and demographic context for the NHS in Scotland,

Highland and Grampian over the next 10-15 years has also been considered. The need for significant redesign of services with greater levels of need to be addressed in community settings and increased emphasis on anticipatory care, self-care, re-enablement and health improvement influencing the design.

2.2.4 National and local strategies describe the need to provide

appropriate community services so that care can be delivered as close as possible to people’s homes. NHS Grampian and NHS Highland are committed to improving access to services for the public. There is therefore a need to provide investment in appropriate building infrastructure in the community to help achieve the objectives laid out in the local strategies.

2.2.5 The main strategic aims for such investment are:

• To support achievement of NHSG/NHSH corporate objectives including ‘Delivering Safe, Effective and Timely Care in the Right Place’

• To reduce NHS Grampian and Highland’s exposure to risks (such as health and safety failures, healthcare associated infection [HAI], infrastructure failure) and support business continuity and sustainability

• To facilitate social inclusion and contribute to the shared responsibility for achieving community planning outcomes.

• To rationalise and redevelop facilities to create a sustainable estate for NHS service delivery

• To support people to remain well and within their communities

• To identify an affordable solution in terms of revenue and capital based on full life cycle costs for physical assets


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2.3 Structure and Content of the Full Business Case

2.3.1 This FBC has been prepared using the format agreed for the

submission of business cases, as per the Scottish Capital Investment Manual (SCIM June 2010)

2.3.2 The approved format is the Five Case Model adopted as part of

the SCIM, which comprises the following key components:

• The Strategic Case Section. This sets out the case for change, together with the supporting investment objectives for the scheme.

• The Economic Case Section. This demonstrates that the organisation has selected the most economically advantageous offer, which best meets the existing and future needs of the service and optimises value for money (VfM).

• The Commercial Case Section. This sets out the content of the proposed deal.

• The Financial Case Section. This confirms funding arrangements, affordability and the effect on the balance sheet of the organisation.

• The Management Case Section. This details the plans for the successful delivery of the scheme to cost, time and quality.

2.4 Business Strategy - National Context

2.4.1 The Scottish Government has set out its single overarching purpose – to focus government and public services on creating a successful country, with opportunities for all of Scotland’s population to flourish through increasing sustainable growth. The NHS as not only a provider of services but also a major employer and manager of a large number of buildings and sites, has a significant contribution to make to the achievement of the five agreed national strategic objectives (Wealthier and Fairer, Smarter, Healthier, Greener, Safer and Stronger).

2.4.2 The present financial context for the public sector in the UK is

one of considerable constraint. Both capital and revenue expenditure will be constrained and the NHS will be required to further improve efficiency and redesign services to reduce cost. The Office of the Chief Economic Advisor at the Scottish Government estimated that from a 2009/10 baseline there will be a reduction in public sector expenditure that will continue for at least six years and will be followed by a period of growth in line with growth in the UK Gross Domestic Product.

2.4.3 Demands within the NHS and Primary Care continue to increase.

Projected demographic change within Scotland between 2010 and 2035 is significant. Overall population growth of 10% is forecast with the most significant increase expected in the 65+ age group (63%). In addition, improved healthcare and treatment has resulted in people surviving longer with long term


21 January 2013

conditions and therefore requiring medical services over longer periods of time. This, combined with the decreasing number of people in Scotland of working age, also places considerable requirement on the NHS to innovate, redesign and find more efficient and effective means of meeting the healthcare and treatment needs of the population.

2.4.4 “Better Health, Better Care: Action Plan” aims to deliver a

healthier Scotland by helping people to sustain and improve their health, especially in disadvantaged communities. It continues to recognise that Scotland’s healthcare challenges have changed, with a greater need to support self-management of long term conditions which is more appropriately delivered in community settings. It requires a greater emphasis on anticipatory rather than reactive care and action to develop the services offered in Primary Care including:

• Guaranteed access to see a member of the GP Practice

team within 48 hours • Advanced booking arrangements • Innovative methods of increasing access to services to

allow for the different commitments to patients • Develop a robust evidence base to support the drive to

improve access and patient experience 2.4.5 The ministerial task force has identified that Primary Care must

play a more significant role in tackling health inequalities. 2.4.6 The Healthcare Quality Strategy for NHS Scotland outlines an

approach which aims to put quality right at the heart of NHS Scotland. It recognises that patients’ experience of the NHS is about more than speedy treatment; it is the quality of care they receive that matters most to them. Patients will be encouraged to be partners in their own care and, in return, can expect to experience improvements in the things patients have said they want from their health service:

• Caring and compassionate staff and services • Clear communication and explanation about conditions and

treatment • Effective collaboration between clinicians, patients and

others • A clean and safe care environment • Continuity of care • Clinical excellence

2.4.7 As part of the Healthcare Quality Strategy, the government released a “Delivering Quality in Primary Care National Action Plan” in August 2010. The foreword to this document states:

“Primary Care is at the heart of the NHS in Scotland and will be

central to delivering these quality improvements. Indeed, for many patients it is the NHS. It accounts for around 90 per cent of all patient contact and, as the gateway to secondary care, is both the start and end point of most patient journeys. It provides


21 January 2013

the key elements of coverage, continuity and effective risk management”.

2.4.8 Some of the actions detailed within the “Delivering Quality in

Primary Care Action Plan” include:

• Improve access for patients, including working with NHS boards and professions to deliver support to those practices which experience the most difficulties.

• Ensure an agreed suite of current care pathways are

available. In the first instance the focus on the pathways will be where the behaviour of Primary Care has the greatest impact. Examples will include Care of Diabetes, Asthma, COPD, Dementia, Congestive Heart Failure and support to older people.

2.4.9 “Better Health, Better Care, Action Plan” also identifies a number

of steps to improve access to dentistry in Scotland, including providing new or substantially improved premises to support the delivery of NHS dentistry in areas with gaps in provision.

2.4.10 In 2005, the Scottish Government published “An Action Plan for

Improving Oral Health and Modernising NHS Dental Services in Scotland. This action plan was underpinned by ten key principles. These included:

• A strengthened dental service targeted at those in most

need • Better support and incentives for practices demonstrating

commitment to the NHS through the provision of NHS services

• Closer integration of dentistry with the wider NHS family, through a national framework with local flexibility

2.4.11 Improving oral health has many public health benefits including

the prevention of dental disease. In Scotland, Government strategy since 2005 has been focused on improving oral health for children and adults and modernising Dental Services in Scotland. The Government has also increased the focus on preventative dental services for older people and disadvantaged groups. Demographic changes means there has been a considerable increase in older people requiring dental care, especially as significantly more elderly people than before are now dentate.

2.5 Business Strategies - Local Context

This section describes the local context for NHS Grampian and NHS Highland separately.

2.5.1 Local Context - NHS Grampian

2.5.1.1 The NHS Grampian Health Plan for 2010-2013

(Healthfit) was based on a comprehensive public and


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staff consultation process. Five key areas of work were identified:

• Improving health and reducing health

inequalities • Involving patients, public, staff and partners • Delivering safe, effective and timely care in the

right place • Developing the workforce and empowering staff • Improving efficiency, productivity and

sustainability i.e. getting the best from our resources

2.5.1.2 In order to achieve these aims, considerable

redesign of patient pathways and the identification of suitable primary and intermediate care settings in order to deliver services are needed.

2.5.1.3 The context for this plan was described by the

Medical Director of NHS Grampian as being “the most challenging that NHS Grampian has ever experienced – but possibly the most exciting in terms of what will be achieved”.

2.5.1.4 The financial challenges facing every Health Board in

Scotland in the forthcoming years will be significant. There are clear trends of increasing costs because of population changes, both population growth and the changing age profile. The population in NHS Grampian is rising overall, Figures 1 and 2 show the trend between 2007 and 2011. Other advances in drugs, treatments and technology will also change the services provided in the NHS in the coming years.

Figure 1


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Figure 2

2.5.1.5 NHS Grampian aims to deliver services as close to

patients’ homes as possible when it is clinically safe to do so. Services are provided in a range of community settings i.e. homes, community settings such as leisure or sports centres, workplaces, in one of the 81 General Medical Practices across the region or in one of the 18 community hospitals across Grampian.

2.5.1.6 Through better integration of health and social care

services, NHS Grampian aims to identify those who will benefit more from early intervention e.g. those with long term conditions and to support people at the end of their lives to remain within their homes or community should they wish to do so.

2.5.1.7 As delivering a greater volume and range of health

treatment and care services within community settings becomes the norm, the provision of high quality, fit for purpose accommodation in a primary care setting becomes more challenging for the following reasons:

• Expanding multi-disciplinary team, with need for

different/ flexible accommodation including visiting teams to support shared care

• Increasing volumes of activity • More multi-disciplinary team (MDT) meetings

(clinical/case conferences and managerial) • Increasing range of diagnostic services • Emergence of telehealth/telecare solutions and

the need to support and review patients using new technology

• Higher dependence on electronic records and communication systems including the ability to support patient focused booking


21 January 2013

• Requirement to be able to support the transition from paper records to electronic records

• More undergraduate and postgraduate training now required to take place in primary/community settings

• Emerging new roles such as Career Start GPs and GPs with Special Interests

• Greater emphasis on patient education and support for self-care

2.5.1.8 The combined effect of these initiatives is that there

will be a new landscape that will increase pressure on primary care accommodation in the coming years.

2.5.1.9 One of the key aims of Healthfit is to strengthen local

preventative services in order to help improve the health of our population. Part of this work is around creating support for self-care, more intensive case management for people with long-term conditions, and more capacity for diagnosis and treatment in local communities.

2.5.1.10 The NHS Grampian Healthfit Plan and the Scottish

Government policy “Better Health Better Care” of 2007 seek to create a sustainable future for the NHS by ensuring that acute hospitals concentrate on caring for people who have a complex and speciality acute care need. To achieve this, NHS Grampian must ensure the range of primary and community based services is adequate to prevent unnecessary referral or admission to acute services. This will, in part, require ensuring that services already available within the community are maintained and capacity increased, but will also require relocating some services from hospital to community settings.

2.5.1.11 In line with NHS Scotland strategy, the NHS

Grampian Dental Plan (2008-12) and NHSG Draft Dental Plan (2012-2016), continues to:

• Support people to sustain and improve their

own oral and dental health • Prioritise the support given to disadvantaged

individuals and communities • Ensure high quality and accessible local NHS

dental services delivered through clear patient focused standards.

2.5.1.12 Whilst there has been a significant and positive

increase in dental registrations and access to dental care within Grampian, the registration rate within Aberdeen Central (parliamentary constituency) is still lower than the Scottish average for both children and adults. The new Draft Dental Plan has set a target increase of over 4,000 children and over 19,500


21 January 2013

adults for the whole of the Aberdeen Central area (2012-16).

2.5.1.13 Dental services in Moray in recent years has been an

issue due to the low levels of adult NHS registrations. NHSG have worked to address this issue and as a result the 2012 dental NHS waiting list for Moray as a whole has been significantly reduced and is currently 1200. In relation to the Forres community specifically, an additional GDP service expected imminently will ensure that the needs of the Forres community are met.

2.5.1.14 NHS Grampian covers a large geographically

dispersed area. Health service delivery across the area is supported by a considerable physical estate, much of which is now of a significant age and creating major requirement for maintenance, repair and replacement.

2.5.1.15 NHS Grampian currently has a significant challenge

in managing its high level of backlog maintenance. The current estimate amounts to approximately £161 million. Approximately 26% (£43m) of this cost is attributable to significant risk items and a further 10% (£16m) attributable to high risk items. Over and above this, 36% of NHS Grampians accommodation is either ‘not satisfactory’ or ‘very unsatisfactory’ in terms of its functional suitability, much of this due to the age profile of the existing property portfolio, 65% of which is over 30 years old.

2.5.1.16 In Grampian there are more requirements for capital

investment than capital available and the present capital programme has only been achieved through significant prioritisation of projects. The prioritisation process has focused on:

• Strategic fit – consistent with strategic aims

and objectives of NHS Grampian as set out in the Grampian Health Plan and other national and local strategies

• Service and business need – the extent to which need has been clearly identified through a needs assessment with outcome measures clearly established. This should include examining the distributional impact of the project in terms of the benefits and costs across geographic, income, gender and age groups in Grampian

• Non-financial benefits – the extent to which there are non-financial benefits arising from the project i.e. improved accessibility, extended range of services, quality of environment,


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equity of service provision, carbon reductions etc.

• Risk reduction – in terms of backlog and the impact of the project on reducing “high” and “significant” backlog in the existing estate and infrastructure; also regarding the Board Risk Register and the extent to which the proposals have an impact on the Board’s Risk Register

• Value for money – the benefits/cost ratio of the project, lifestyle costs etc.

• Acceptability – political and social acceptability of the project. The extent to which expectations have already been raised, the ability to manage the response to changes in the project’s delivery timetable

2.5.1.17 The gap between projected need for capital

investment and capital available necessitates consideration of other revenue-based procurement methodologies for improving the physical estate.

2.5.1.18 NHS Grampian has an Environmental Policy that

states “NHS Grampian has a commitment to the environment and the principles of sustainability”. It also underlines the need to comply fully with associated legislation.

2.5.1.19 Grampian’s impact on the environment is evidenced

through the consumption of natural resources such as energy and water. The effect is also seen in the management of emissions, transport, procurement and waste in its various forms. In the daily routine of NHS duties, these various aspects can present a high level of environmental risk and NHS Grampian takes its responsibilities in this area seriously. As part of the management of that risk, clear evidence that NHSG is complying with environmental legislation is essential. Various groups, both formal and informal, meet to address the issues and seek to provide both direction and guidance to staff generally.

2.5.1.20 The NHS Grampian Workforce Plan is a key

document which details objectives for workforce development and redesign:

• Plan on the basis of the multi-disciplinary, multi-

level workforce team, following the patient pathway approach

• Ensure that workforce plans meet the criteria of affordability, availability and adaptability

• Determine appropriate staff levels on the basis of required competencies and capabilities rather than qualifications only


21 January 2013

• Build career pathways that promote succession planning to ensure the required skills are available

• Align workforce planning and redesign with our strategic themes, adopting a future rather than current focus on required changes

2.5.1.21 This work is in line with the five key ambitions

identified for the Scottish NHS Workforce:

• Tackling Health Inequalities by ensuring that all staff act as ambassadors for health improvement

• Shifting the balance of care by providing new models of care closer to home

• Ensuring a quality workforce by offering an exciting and rewarding career for all

• Delivering best value by providing quality services in a sustainable way

• Developing an integrated workforce through the development of a dynamic, flexible, multi-professional team and the integration of services, workforce and financial planning

2.5.2 Local Context - NHS Highland

2.5.2.1 The NHSH mission is to provide person-centred

services tailored to people’s needs in a systematic and consistent way - to provide ‘quality care to every person every day’. The vision is to; • Provide quality care at all times • Support people and communities to maximise

their own health • Develop precision driven services so that when

people need our care they experience; timely, focused, effective services, that minimise the duration and frequency of contact

• Ensure that every health pound spent delivers maximum health gain

2.5.2.2 The quality objectives have three key elements that

must be met simultaneously; • Better Health – improving the health of the

population • Better Care – enhancing the experience of care

for individuals • Better Value – controlling the per capita cost of

care

2.5.2.3 Implementation of this vision means that the characteristics of service delivery in NHS Highland over the next five years are evolving to be ones of:

• promoting good health, self care and

independence


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• high quality, integrated, equitable, needs and evidence-based, and cost-effective

• increasingly community-based with hospital beds preserved for the most acutely ill and those with specialist needs

• integrated with, and complementary to, local authority, voluntary and independent sector care

• run by healthy, flexible, well-motivated and well-trained staff working to their maximum potential and capability

• using modern, flexible, efficient, green assets to maximum effect

• with zero wastage and inefficiency across all services and no unnecessary overheads

2.5.2.4 Quality is at the heart of this vision. The focus on

efficiency without attention to quality is unthinkable, but equally that promoting quality with no regard for efficiency is unsustainable.

2.5.2.5 This vision will be realised by the implementation of

the NHS Highland Strategic Framework, the Highland Quality Approach and the Quality and Efficiency Plan.

2.5.2.6 In September 2012 NHS Highland launched the

Highland Quality Approach. The Highland Quality Approach captures the spirit of how NHS Highland is working to improve care and outcomes for people in Highland. It describes ways of working, values and behaviours. It recognises how important it is to improve the health of the population and get the experience of care right for individual people, every time. NHS Highland will deliver this by focusing on providing person-centred care while at the same time eliminating waste, reducing harm and managing variation.

2.5.2.7 This approach places an explicit emphasis on how

NHS Highland will make best use all of their resources. It is founded on the evidence that by focusing on quality and being person centred they will achieve better health, better care and better value using the Highland Quality Framework.

2.5.2.8 The Highland Quality Framework, adopted from

Virginia Mason Medical Centre is captured in the blue triangle, see Figure 3. It has been designed to place the individual at the top, with everything else NHS Highland does supporting this purpose. The key elements of the Highland Quality Approach are summarised in the blue triangle and include the Mission, Vision and Values. It also describes how services and care will look in the future as well as


21 January 2013

how NHS Highland is approaching changing the way they deliver services and care.

2.5.2.9 This strategic approach within Highland underlines

the importance of the contribution health and social care in primary care make to the health and well being of communities especially the older generation and those with complex care needs.

2.5.2.10 In April 2012 NHS Highland and Highland Council

entered into a partnership, the Highland Health and Social Care Partnership, to integrate the delivery of health and social care for children’s services and services for adults. Through a lead agency model NHS Highland took responsibility for delivering all adult health and social care as articulated in a partnership agreement developed during the year to 1 April 2012. Highland Council assumed responsibility for the delivery of integrated health and social care services for children on the same date.

2.5.2.11 “The Highland Partnership is committed to achieving

the best possible outcomes for our population and service users. We believe that services should be person centred and enabling, should anticipate and prevent need as well as react to it, should be evidence based and acknowledge risk. We will improve the quality and reduce the cost of services through the creation of new, simpler, organisational arrangements that are designed to maximise outcomes and through the streamlining of service delivery to ensure it is faster, more efficient and more effective.”

Figure 3


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2.5.2.12 Geographical Position and Health Comparisons

2.5.2.12.1 The population of Mid Highland, which encompasses Ross, Cromarty and West Ness (RCWN) and within which the town of Tain sits, based on the population structure in 2008, was estimated to be 89,989. The percentage of the population, who are of working age, and the live birth rate, are both significantly lower than the Scottish average. Moreover, the greater life expectancy and advances in healthcare will contribute to an increase in the proportion of older people in the area. Overall the demands on primary care will continue to increase significantly.

2.5.2.12.2 There are well known strengths and weaknesses in

trying to measure deprivation in rural areas. In the area served by NHS Highland there are large geographic areas and populations with very different economic and social profiles. The people living in this area do not equally share in outcomes and opportunities.

2.5.2.12.3 Geographic variations in socio-economic and other

deprivation variables are closely related to the health status of the population. The areas experiencing highest levels of deprivation can be seen to correlate with higher than expected levels of ill health or mortality given the age-sex profile of the population.

Table 1


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Figure 4

Mid Highland areas in the national most deprived twenty percent of multiple deprivation.

Figure 5

Population Changes; Ross and Cromarty and West Ness 2002-2008 Data Source: Community Health Index Practice List Population April 2008

2.5.2.12.4 In common with Highland as a whole, the general

pattern of the Ross and Cromarty and West Ness practice populations shows a growing but ageing population. This population exhibits a profile that reflects generally low levels of fertility, larger cohorts in the age ranges 40-64, followed by progressively fewer people in the older age ranges. The pinched

3000 2500 2000 1500 1000 500 0 500 1000 1500 2000 2500 3000

0-4

5-9

10-14

15-19

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65-69

70-74

75-79

80-84

85-89

90+

Number

Male 20022008

Female 20022008


21 January 2013

waist profile is indicative of population loss to out-migration in the young adult age range. Given continued improvements in life expectancy, and the continued ageing of the cohort now 40-64 years of age there will be in the future a larger proportion of the population in the very oldest age ranges. The population pyramid (Figure 5) highlights the short term change in population structure over the last six years.

2.5.2.12.5 Assuming that existing high migration patterns

continue and that relatively low fertility and continually improving mortality patterns will operate in the future, the sort of percentage growth in population is shown in Figure 6.

Figure 6 Percentage growth in RCWN population 2002-2020

Data Source: Community Health Index Practice List Population Series and HIKU 2006 based locality population projection

2.6 Overview of NHS Board Areas

This section provides an overview of NHS Grampian and NHS Highland separately.

2.6.1 The purpose of NHS Grampian is to:

• Improve the health of people in the North East of Scotland

and beyond • Provide high quality services to our patients

Actual Projected

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0

25.0

2002 2005 2008 2011 2014 2017 2020

Perc

enta

ge c

hang

e fro

m 2

002

RCWN Highland projection point


21 January 2013

• Help people choose the best way to look after their health 2.6.1.1 NHS Grampian is the organisation responsible for

leading efforts to improve the health of the people of Grampian and for providing the NHS health care services which people need. NHS Grampian is the fourth largest Health Board in Scotland consisting of three Community Health Partnerships – Aberdeen City, Aberdeenshire and Moray, and an Acute Sector. All of these sectors are supported by corporate services such as Facilities.

2.6.1.2 NHS Grampian provides services to over half a

million people, predominantly from Grampian, but also from the Western Isles, Highland, Orkney, Shetland and Tayside.

2.6.1.3 NHS Grampian employs around 17,000 staff. As a

teaching Board, there are close links to the University of Aberdeen and Robert Gordon University.

2.6.1.4 The revenue expenditure budget for NHS Grampian

in 2012/13 is £981 million with a capital resource limit of circa £50.7 million. The largest areas of expenditure by operational area are:

• Acute Sector £336 million • Primary Care £182 million • Aberdeen City Community Health Partnership

£68 million • Aberdeenshire Community Health Partnership

£58 million • Moray Community Health Partnership £21

million • Mental Health and Learning Disabilities £57

million • Centrally Managed Dental Services £35 million • Pharmacy Services £19 million • Non Clinical Services £102 million

2.6.1.5 The Woodside Fountain Health Centre will be within

the Aberdeen City Community Health Partnership (CHP) and the Forres Health and Care Centre in the Moray Community Health Partnership.

2.6.1.6 NHS Grampian has a single operating division

consisting of four sectors – three CHPs and the Acute Sector and Mental Health Service.

2.6.1.7 The driving force for service change and redesign in

Grampian is the Health Plan. Within this plan it sets out the main areas that need to be addressed to meet the challenges in the future arising from changes i.e. population structure, need for services,


21 January 2013

workforce and technology to improve treatment and care for patients.

2.6.1.8 Since 2002, NHS Grampian has adopted Healthfit as

the strategy for improving health. Healthfit focuses on:

• Ensuring everyone has the same opportunities

to live a healthy and long life • Supporting people to take greater responsibility

for their health through self-care and self-management

• Providing safe care and services when people need them and doing this locally and in partnership, wherever appropriate

• Ensuring that only specialist and more complex care is provided in hospitals

2.6.1.9 NHS Grampian concentrates on adapting services to

meet the future needs of the population. There are several reasons for change which include:

• Ageing population • Growth in long-term conditions such as

diabetes • Improving access to treatment • Advances in medical and surgical practice • Rising costs of providing services • Widening gap in life expectancy between the

affluent and the disadvantaged

2.6.1.10 There are currently 109 independent dental practices in Grampian operating NHS lists. Of those, 51 are located within Aberdeen City and 16 in Moray. With the exception of those practices which are in new premises, the vast majority of independent practices (approximately 75-80%) are within premises which are far from ideal. The limitations arising from these premises impact either on their ability to physically expand the premises and therefore increase their capacity to accept more NHS patients, pose limitations on their ability to provide sufficient space for specialist treatments or to enable appropriate access for those with disabilities. In addition, there are a further four independent dental practices, two in Aberdeen City and two in Aberdeenshire, that are currently non-compliant with decontamination guidelines.

2.6.1.11 In relation to GMS premises in Grampian, in 2002,

NHSG undertook a review of General Medical Services premises across Grampian and agreed a prioritised 10 year programme of replacement. Replacement of the Woodside Medical Group premises and the Forres Health Centre were


21 January 2013

identified as key priorities on the 10 year programme. Earlier, Standard Business Cases were subsequently approved by NHS Grampian in April 2004. Progress to take forward these developments was hampered by the inability to secure a suitable site in relation to Woodside and the need to provide greater value for money in relation to Forres.

2.6.2 The purpose of NHS Highland:

2.6.2.1 NHS Highland provides strategic leadership and

direction for all NHS services in the north of Scotland. It is accountable to the public and to the Scottish Government for all elements of the NHS system in the Highland Council and Argyll and Bute Council areas. It works with partners to improve the health of local people and the services they receive and to ensure that national clinical and service standards are delivered across the NHS system. NHS Highland is working to improve services with the involvement and support of the public, partners in other NHS Boards, Highland Council, Argyll and Bute Council and voluntary agencies. NHS Highland will continue to inform and consult local people at the earliest possible stages on developments.

2.6.2.2 Working in partnership with other agencies and the

public it aims to provide a cohesive framework amongst primary care and professional groups and between all other community care groups within the same areas to allow the development of services to the local population. The South and Mid Operational Unit is responsible for delivering local, community based health and social care. This is done by enhancing joint working relationships across the whole care pathway in terms of delivery of care models.

2.6.2.3 As a large rural area with varied geography and

several centres of population, there are particular challenges in meeting the health needs of the people of the Tain area. The strategic vision has been to develop, with our partners, particularly Highland Council, integrated services accessible in as many local areas as possible. Services are being enhanced and the skill mix of staff is such that the needs of the local population can be met without the need for onward referral in the main.

2.6.2.4 NHS Highland has one district general hospital in

Inverness and 3 rural general hospitals – in Wick, Fort William and Oban, as well as a number of community hospitals across the region including one in Invergordon.


21 January 2013

2.6.2.5 These community hospitals are supported by health centres, clinics and healthcare related facilities across the region to provide an integrated primary care service. In summary, South and Mid Operational Unit, under the strategic direction of NHS Highland, and in conjunction with its partners, or through the lead agency model, support the delivery of the following clinical and care services within the region:

Inpatient services including palliative care, GP

beds, medicine for the elderly beds, Allied Health Professionals (AHP services) (including physiotherapy, occupational therapy, dietetics and speech and language therapy).

Out-patient services (include smoking cessation services, minor injuries, paediatric out-patients, enuresis clinics, diabetic clinics, baby clinics, breast feeding support groups, sleep clinics, out-patient physiotherapy services, integrated rehabilitation team, community rehabilitation team, health visiting, school nursing, district nursing, treatment room nursing and day hospital services.

Out-Patient services (provided in region) include, x-ray, audiology, urology, midwifery, addictions services, ophthalmology, family planning, orthotics, clinical psychology, Community Psychiatric Nursing services, psychiatric and bereavement counselling

Various other clinics (provided in the region) include movement disorder clinics, medicine for the elderly clinics, chest clinics, rheumatology clinics and dermatology clinics.

Social care services for adults General Practitioner services Community Pharmacy General Dental Practitioner and Salaried Dental

Services Figure 7


21 January 2013

2.6.2.6 The Tain GP practices sit within the Ross Cromarty and West Ness locality of the former Mid Highland CHP area.

2.7 Delivering the Strategy in Forres

2.7.1 Delivering Healthfit by:

• Optimising Acute Health Care – by networking Dr Grays Hospital, Aberdeen Royal Infirmary and Raigmore Hospital

• Maximising Primary and Community Care • Promoting Self Directed Care

2.7.2 The main aim of the Moray Community Health and Social Care

Partnership is to meet the changing health and social care needs of the Moray population by shifting the balance of care to improve their outcome.

2.7.3 Shifting the balance of care will bring about better outcomes for

people, providing services which reduce inequality, promote independence and are quicker, more personal and closer to home. This means we will need to develop pathways of care that may involve shifting the location, shifting the responsibility or shifting the focus of care on to prevention – it will most likely involve a combination of these three as interlinked activities.

2.7.4 Shifting the location of care – by improving access to care and

treatment through changes in the location of services; providing a wider range of diagnostic and specialist services in communities and maximising the use of new technologies. This might mean:

• care at home rather than at a community hospital • at a GP Practice or community hospital rather than at Dr

Gray’s in Elgin • or in Moray rather than at Aberdeen Royal Infirmary

2.7.5 Shifting the focus of care onto prevention – by increasing the rate

of improvement by anticipating and addressing the need for care at an earlier stage; changing the emphasis from unplanned acute care to systematic and personal support of people with long term conditions. This might mean people receiving additional advice and support to help them look after themselves, and to learn the signs that mean their condition is getting worse, and what action to take.

2.7.6 Shifting who delivers care – providing more care and treatment in

the community will require professionals and staff to develop their skills, expertise and roles. It will also mean the development of extended and integrated primary care teams working in partnership to improve the outcomes of people in their care.


21 January 2013

2.7.7 The new Forres Health and Care Centre will help to achieve shifting the balance of care, improving partnership working and improve patient care.

2.7.8 Investment objectives and Critical Success Factors - Forres

2.7.8.1 The investment objectives for the project are outlined

in Table 2. These were developed by the Forres Project Group in light of the work undertaken with both internal and external stakeholders. The following objectives are consistent with the principles of the NHS Grampian Health Plan, Healthfit and with those found in the Outline Business Case.

2.7.8.2 The Office of Government Commerce (OGC) places

significant importance on the identification of Critical Success Factors (CSFs) or Performance Criteria for projects. CSFs define the essential areas of activity that must be performed well if the objectives of the project are to be achieved. CSFs must therefore be strictly aligned with the project objectives and must be Specific, Measurable, Achievable, Realistic and Timebound (SMART).

2.7.8.3 The CSFs for this project are included in Table 2

below and were identified in conjunction with Project Stakeholders. These CSFs were then used to evaluate the various options considered in order to fulfill the Project Objectives. Table 2 includes the CSFs, associated SMART criteria and baseline information required to assess the CSFs.

Table 2

Investment objective Critical Success Factor Information required for SMART Baseline

Benefit Weightin

g / 100 A service designed and staffed to provide rehabilitative care

Patients receive rehabilitation Length of stay Falls information

25

Maximum access to diagnostic facilities and specialist advice.

Increase the availability of specialist opinion

Services available 20

Integration of primary / acute / community care.

Number of staff co-located Existing staff locations/co-locations

20

Promotion of training for staff and carers.

Staff have access to training Number of staff accessing training sessions

5

Public support, participation and service access.

Public support the development and service changes

DNA rates Public engagement surveys Complaints Number attending events

20

Promotion of Health Improvement through the wider promotion of health beyond individual treatment.

Public are engaged in health promoting activity Public have access to development to promote health

Traffic light tool Groups accessing facility

10

100


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2.7.9 Sustainability and Design Quality Objectives

2.7.9.1 The sustainability and design quality requirements required are outlined in appendix 2f In relation to: • The Building Research Establishment’s

Environmental Assessment Method (BREEAM) and;

• The Achieving Excellence Design Evaluation Toolkit (AEDET)

2.7.10 Existing Arrangements - Forres

2.7.10.1 The existing arrangements are as follows: Community hospital services, including an outpatient

service, radiology and Scottish Ambulance Service base are currently delivered from the existing 120 year old Leanchoil Hospital. GMS services, along with various primary care services are delivered from Forres Health Centre which was built 37 years ago and now has around 16,000 patients.

Figure 8

Current Forres Health Centre

Leanchoil Hospital, Forres


21 January 2013

2.7.11 Business Scope - Forres

2.7.11.1 Leanchoil Hospital currently provides nine inpatient

beds in a variety of single and multi rooms with no en-suite facilities, along with outpatient facilities, rehabilitation facilities and access to diagnostic services. The accommodation is poorly arranged on the ground floor with significant distance form one area to another which puts pressure on staff trying to provide modern standards of care. The south wing is subsiding due to ground conditions activity. The building is Grade B listed.

2.7.11.2 The hospital was assessed prior to the development

of the OBC as no longer fit for purpose and a recent HAI Scribe audit further highlighted areas for improvement and action. The outpatient, rehabilitation and diagnostic services will move to the new facility as part of this business case. A separate Healthfit process is in progress to determine the correct arrangements for 24 hour care in Forres.

2.7.11.3 Forres Health Centre was built in a central Forres

location to accommodate services for 2 GP Practices and a modest level of nursing and support staff. Almost forty years later the building does not meet the space, clinical, professional and contemporary work place needs of clinicians, patients or support staff.

2.7.11.4 The expanded role of Primary Care has led to a

greater pressure for space and designed clinical areas in which to carry out more complex and complicated clinical tasks. Additionally within the Forres locality professional staff are merging functions between Community and Primary Care. Council staff will co-locate within the new development.

2.7.11.5 The existing health centre is cramped, has been

extended a number of times over the years with temporary accommodation and generally has a layout, which does not encourage efficient practice. The consent for the temporary accommodation is time limited.

2.7.11.6 Due to the site constraints of Forres Health Centre

there is no scope to extend the premises. The Health Centre is located within a residential area and borders an area of Environmental space of historic interest. The existing Health Centre does not provide the Local Authority’s Planning Department’s stated requirement for parking spaces per consulting room.


21 January 2013

2.7.11.7 The impact of the closure of Kinloss RAF base has been more or less as expected and as highlighted in the OBC (March 2011). Retiring RAF personnel are choosing to stay in this area and are now requiring treatment from the GP practices where previously this was supplied through the RAF. No significant reduction in patient numbers has been recorded by the practices in relation to other RAF personnel leaving.

In addition, the army regiment (39 Engineers) that have now taken up residence in Kinloss are requiring health care provided to families of army personnel. This has meant significant increases in GP Practice list sizes over the last six months.

2.7.11.8 In summary, the need for change arises from the

following:

• Poor standards of facilities for modern standards of care;

• Support improvements in health through the timely access to diagnosis and treatment or improved learning for people with e.g. long term conditions;

• GP practice partially housed in temporary accommodation with a temporary planning consent;

• Reduced opportunity for whole system working, integrating primary care, community health, hospital based ambulatory services and social services, to promote shifting the balance of care;

• The poor condition of the existing infrastructure requiring increased maintenance and heating.

2.7.12 Scope of Clinical Services - Forres

2.7.12.1 The desire to shift the emphasis in services for the

elderly will not be possible without physical integration of rehabilitation and social services in one building. This proposed development will facilitate improved access to all health and social care for the patient/client group with the greatest mobility problems at the new Health and Care Centre. Integration of health and social services will provide best value to patients based on the ‘one-stop shop’ principle. As many services as possible will be available at each visit, especially for those with chronic disease and through removing the artificial boundaries between secondary, primary and community care, further progress will be made in improving the scope and range of health care locally. The services required to meet the need for modern healthcare delivery, integrated with the extended


21 January 2013

primary healthcare and social care teams are as follows:

• General Practitioner Services for the Forres

area; • Integrated Primary Care Services where

patients can access a range of health and social services in one visit;

• Integral X-Ray Service to Primary and Intermediate Care;

• A Rehabilitation Service including clinical space for OT, Physiotherapy and Podiatry;

• A responsive Health and Social Care Team; • Outpatient Services; • Minor Injury service

2.7.12.2 The focus will be on health and wellbeing, rather than

illness. 2.7.12.3 Laboratory services are currently provided at Dr

Gray’s Hospital and at Aberdeen Royal Infirmary. This will remain the position. The Community Mental Health Team and Older Adults Team both provide visiting services on an outpatient and day basis in the exiting premises. These will transfer to the new development. Services for dementia, which are predominantly home based, will continue to be provided in the Forres area.

2.7.12.4 This accommodation will be designed both physically

and operationally to support multiple service use thereby not only maximising asset utilisation but facilitation integrated working and flexible service delivery models. The facility will also be used out of hours and it is anticipated that this will be both health service and public use, such as extended services and self-help groups.

Table 3

Building User Floor Area (square metres) General Medical Services 1,624 Community Health and Social Care Partnership including Social Work

712

Gross Internal Floor Area 2,336

2.7.12.5 During the development of the OBC the project team undertook a series of ‘value engineering’ sessions to identify where efficiency could be achieved by sharing facilities and space, or reducing the original space allocated. For example, the GP practice has significantly reduced their records storage, and the outpatient rooms will be used jointly by podiatry, reducing the need for both. In addition, where appropriate, staff will adopt ‘hot desking’ rather than


21 January 2013

having a desk each. Plans for the preferred option are included in Appendix 3a.

2.7.13 Benefits - Forres

2.7.13.1 On the basis that the required services are put in

place, the next sections capture the key benefit criteria and risks associated with the proposed investment. These sections also highlight the main constraints and dependencies associated with the scheme. The Benefits Criteria provide a basis for the non-financial comparison of the options as part of the economic appraisal in the OBC.

2.7.13.2 The Benefits Criteria for the project were developed

by the Forres Core Group, including stakeholders, following a full discussion, with a broad range of suggestions being put forward across the team. They also reflect the Investment Objectives and Critical Success Factors outlined in Section 2.7.8.

2.7.13.3 This was followed by a discussion on the relative

importance of each of the criteria, which resulted in a weighting being applied to each.

2.7.13.4 The weightings used are in increments of 5-20 on

the following basis:

• 5 – of least (relative) importance – “good to have”

• 10 – important that some element is reflected in the project

• 15 – very important to the project • 20 – fundamental to the project

2.7.13.5 The Benefits Criteria and their weightings are shown

in Table 4. These weighted criteria were used by the Forres Project Team to evaluate the shortlisted options from a non-financial perspective as part of the option appraisal at OBC stage.

Table 4

Benefit Criteria

Weight

1 Improves accessibility for service users 20 2 Safe and secure 15

3 Improved experience for staff and service users

15

4 Making the most effective use of Information Technology

10


21 January 2013

2.8 Delivering the Strategy in Woodside, Aberdeen

2.8.1 Some communities in Aberdeen have significantly worse health than the rest of the region. The Aberdeen Regeneration Strategy identifies seven communities as regeneration communities and six as communities at risk. Nearly 50% of Woodside Medical Group’s registered patients are from deprived areas (Deprivation Category 5-7) where long term conditions tend to be more prevalent.

2.8.2 According to the Health and Wellbeing Profiles in 2010,

Aberdeen City scored significantly better than the Scottish Average in areas around Mortality, Mental Health and Function Indicators, Education, Employment and Prosperity.

2.8.3 However, using these same profiles in relation to the population

registered with the Woodside Medical Group, it reveals a practice population with significant deprivation and inequality. Table 5 identifies indicators that demonstrate where the Practice population scores are more than 5% higher than the Scottish average:

2012 Health and Wellbeing Profile of Woodside Medical

Group Practice Population - Indicators where the Practice population profile is more than 5% higher than the Scottish Average.

Table 5

Indicator Practice Population

Scottish Average

People living in 15% Most Deprived Areas of Scotland

41% 14.2%

Mortality – death all ages 75% Not available as average

Alcohol Related Deaths 61% Not available as average

Adults with Long Term Limiting Illness 81% 20.3% Population Income Deprived 63% 15.1% Work Age Population Employment Deprived

64% 11.6%

2.8.4 As detailed in “Better Health, Better Care, Action Plan”,

someone living in a deprived area is more than twice as likely to have a long term illness compared with someone in an affluent area and people living with long term conditions are likely to be more disadvantaged across a range of social indicators such as employment, educational qualifications, home ownership and income.

2.8.5 As stated before, replacing the Woodside Medical Practice has

been one of the top estate development priorities for NHS Grampian since 2002 but has not been progressed due to the inability, until recently, to identify and secure a suitable site. The deprivation factors related to the geography of the Practice community made it essential that the preferred site was


21 January 2013

identified in an area that would be accessible to a practice population with significant deprivation and health inequality.

2.8.6 Critical Success Factors - Woodside

2.8.6.1 The key objectives of the Woodside Fountain Health

Centre Project are as follows:

• To create fit for purpose facilities for the Woodside Medical Group in a location suitable for the patient population served by the Practice and also co-locating the integrated Health and Social Care Team including the Community Nursing Team and the Social Care Team.

• To create fit for purpose facilities to deliver improved dental services to an area of the City where oral health and the availability of dental practices is known to be poor.

2.8.6.2 In addition there are a number of Critical Success

Factors that require to be achieved for the project to be considered as successful. These success factors were developed by the CHP and the Woodside Project Team.

a) The project is delivered within the available

affordability envelope b) Deliver facilities that enable the existing and

planned enhancements to clinical services c) Improvement in access to dental services for

the Woodside and Tillydrone communities especially vulnerable groups

d) Improvement in the oral health of the child population of these communities as a consequence of the Childsmile initiative

e) Compliance with all relevant health guidance (unless otherwise agreed as being inappropriate) including HAI SCRIBE guidance to ensure facilities are commensurate with current policy and reduce the risk of health related infection spread

f) Avoid any significant disruption to existing clinical services in the locality

g) Quality - delivery of key stakeholders (including community representatives) expectations (where these match the brief) is critical to the success of the project. “AEDET” (see Appendix 2f) reviews will be undertaken and will achieve a minimum target score of 4/6 in all categories

h) Sustainability - the achievement of BREEAM (see Appendix 2f) Healthcare “Excellent” for new build or “Very Good” for refurbishment development is critical to the project success

i) Increase staff morale and assist recruitment and training of talented staff


21 January 2013

2.8.6.3 These Critical Success Factors have also informed

the investment of objectives outlined in Section 2.8.7 and the benefits criteria used for option appraisal purposes in Section 2.8.12. They are also linked to the Benefits Realisation Plan being developed for the project and will form part of the post project evaluation described in Section 6.11.

2.8.7 Investment Objectives - Woodside

2.8.7.1 The investment objectives for the project are outlined

in Table 6. These were developed by the Woodside Project Group in light of the work undertaken with both internal and external stakeholders. The following objectives are consistent with the principles of the NHS Grampian Health Plan, Healthfit. The investment objectives have been ranked into three categories; “essential”, “important” and “beneficial”.

Table 6

Essential Investment Objective Align

with CSF

Measurement

1. Need to vacate unfit premises which are not DDA compliant, too small to provide high quality services and is subject to the need for backlog maintenance.

E, F Interim reviews with staff and patients.

2. Improve patient experience by ensuring a wide range of general medical services is available that facilitate social inclusion by improving access to services, health information and patient education for people living in areas of health need.

B, C, D, G

Baseline of patient feedback v patient feedback at 1, 3 and 5 years.

3. Better facilities to ensure continued and further improved teaching and medical training for future healthcare professionals and contributes to the recruitment and retention of staff.

I Measurable reduction in staff turnover. Measurable increase in the number of trainees in practice.

4. Identify an affordable solution in terms of revenue and capital.

A, E, H Measurement of CHP revenue expenditure current and new practice accommodation.


21 January 2013

Investment Objective Align with CSF

Measurement

5. Solution will deliver improved efficiency and integration by enabling multi-disciplinary working, efficient skill mix of staff, sharing of resources and high levels of room occupancy.

C Achieve higher % of integrated working. Change in workforce skill mix, demonstrates improved mix of skills and grades.

6. Supports improvement in health through timely access to diagnosis, treatment or improved learning for people with e.g. long term conditions

D, G, I Measurement using national waiting time targets.

Important 7. Good access to services in terms of

public transport, car parking, timely appointments but also easy way finding throughout the facility.

F, G, H Baseline of patient feedback v patient feedback at 1, 3 and 5 years.

8. Patient and staff safety to be improved through creation of a fit for purpose building with good access and health and safety standards.

G, H Review of Datix demonstrates reduction in incidents.

9. Provides flexible, modern, high quality accommodation with expansion capability “built-in” to allow for future growth if population need requires it.

E, G, H, I

Undertake AEDET Audits at key stages of project.

10. Ability to facilitate multi-agency working with other community planning partners e.g. Aberdeen City Council and Voluntary Sector.

C, G Increased usage by partner’s id evidenced. Baseline v audits’ at 1, 3 and 5 years.

Beneficial 11. Provides business visibility so that

people know where to go for services and is viewed as a positive structural addition to a re-generation area.

F Patient feedback using survey and sustained practice list size.


2.8.8.1 The sustainability and design quality requirements

required are outlined in appendix 2f In relation to:

• The Building Research Establishment’s Environmental Assessment Method (BREEAM) and;

• The Achieving Excellence Design Evaluation Toolkit (AEDET)


21 January 2013

2.8.8.2 The current Woodside premises have been reviewed using the AEDET toolkit the results at outlined in Figure 9 demonstrates that this building scores poorly at between 0.6-1.5 in all ten categories, the target is 4-6 in all categories.

Figure 9

► Character and innovation ● 1.0

► Form and materials ● 1.4

► Staff and patient environment ● 1.5

► Urban and social integration ● 1.0

► Performance ● 1.5

► Engineering ○ 0.6

► Construction ○ 1.0

► Use ● 1.0

► Access ● 1.4

► Space ● 1.5

2.8.9 Existing Service Arrangements - Woodside

2.8.9.1 The ultimate aim of the Woodside Medical Group is to provide comprehensive primary healthcare services to the population of Woodside and surrounding areas in a modern, high quality environment, enabling the Practice to fully meet patients’ needs and expectations.

2.8.9.2 Woodside Medical Group are presently

accommodated within a detached, two storey purpose built building at 80 Western Road in the Woodside area of Aberdeen which has previously been extended and modified to cope with growing demand to the absolute limits on the site.

2.8.9.3 The premises are once more inadequate for the

provision of general medical and community health services for the Woodside and Tillydrone areas.

2.8.9.4 Woodside Medical Group is a partnership of ten

independent GPs and has a current list size of 10,988 (September 2012). The Practice is currently over-capacity in terms of patient numbers but, due to the locality and deprivation indicators of the catchment population, the Practice continue to accept new patients. Their catchment area expands north to the Middleton (Bridge of Don), area west to


21 January 2013

the Northfield area and south to the Ruthrieston area with a clear boundary at the River Dee.

2.8.9.5 The Practice holds both training and teaching status. 2.8.9.6 Woodside Medical Group offers a broad range of

General Medical Services (GMS) to a high quality as evidenced by QOF performance. The Practice provides full contraceptive and minor injury services, diabetic care, INR monitoring clinics, DMARD and high risk medicine monitoring. Childhood, adult and travel immunisations are given as well as the annual flu programme. Drug dependent patients are prescribed for and monitored in conjunction with the Substance Misuse Service. There is also a minor surgery service both for the Practice’s patients and referred patients from other practices.

2.8.9.7 Woodside Medical Group is enthusiastically involved

in teaching and training from work experience students hoping to apply for medical training, medical students from Aberdeen University, GP registrars and nursing and health visiting students.

2.8.9.8 The Practice anticipate continuing the high standard

of care provided in the new premises, but in a modern and user friendly environment, with more flexibility of appointments. It is hoped that the range of diabetic services and number of patients seen for practice care will be increased. The Substance Misuse Service nurses have had to move out of the Practice premises due to lack of space and it is intended to bring their sessions back into the Practice which will improve communication and support for this service.

2.8.9.9 The Practice is currently disadvantaged regarding

GP training and can only accommodate ST3 registrars. ST1 and ST2 doctors will be attached as well in the new premises giving better continuity for both the trainees and patients. Teaching of medical students has been limited due to lack of space and will be increased.

2.8.9.10 The attached practice pharmacist will be able to

consult with patients for doing medicine reviews as happens in other practices currently. Community team members will be able to consult promptly with clinicians which should improve communication and team working. The GPs will be able to spread their consulting more and they will be able to meet regularly which will improve communication and peer support.


21 January 2013

2.8.9.11 It is anticipated that some secondary care services may be able to do clinics in the new premises and there will be space to include other services that may be beneficial to patients such as counselling sessions.

2.8.10 Existing Premises Arrangements at Woodside Medical

Group

2.8.10.1 Condition Survey and Backlog Maintenance

2.8.10.1.1 The existing Woodside Medical Practice has a number of statutory standard issues that require to be addressed. The issues to be addressed include, for example, fire safety with a new fire alarm system required as well as fire compartmentalisation works.

2.8.10.1.2 No comprehensive condition survey has been

undertaken. The property does however have significant issues that cannot be easily addressed as far as functional suitability is concerned. The building is too small for the current primary care services provided with no expansion space available. There are no car parking facilities specifically for the Practice, all parking is on surrounding streets. There is no lift to the first floor where consulting and treatment rooms are provided.

2.8.10.2 Existing Health Facility Constraints

2.8.10.2.1 Many patients of the Woodside Medical Group

encounter problems with the current service before even entering the premises. A number of accessibility issues create difficulties for several less mobile patient groups. The Practice is located on an incline which poses an inconvenience and danger to the disabled and elderly. There is no designated parking and on-street parking is very limited. Poor access to the Practice premises means that many less mobile patients are reluctant or unable to visit the surgery, necessitating costly and time-consuming home visits.

2.8.10.2.2 Internal accessibility continues to present problems

to both patients and staff. Clinical areas are appointed over two floors and corridors and doors are too narrow for wheelchairs to get through. Although this would not necessarily be problematic in a modern building with facilities for the disabled such as a passenger lift, the current ageing premises make no such provision. There is only one out of the available eleven consulting rooms which can be accessed by a patient in a wheelchair. This room is on the ground floor of the building which means that wheelchair-bound patients have to schedule their


21 January 2013

appointments for when this ground floor room is available.

2.8.10.2.3 There are many significant limitations to delivering

primary care medical services in the existing building which include, for example:

• No lift access to the consulting and examination

space on the upper floor • Building not DDA compliant due to site

constraints • Confidentiality compromised by poor layout and

acoustics • Consulting rooms with no natural light • No staff changing • Community Nursing Team located in another

building a mile away • Inadequate storage space • Accommodation constraints limit the ability to

work jointly with secondary care colleagues and other visiting services

• Severely limited teaching capacity, both medical and other professions

2.8.10.2.4 The images in Figures 10 and 11 seek to

demonstrate some of the current constraints, internally and externally.

Figure 10 External images of current Woodside Medical Group premises


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Constrained, land locked site with no room for expansion and only very limited on street parking

Figure 11 Internal images of current Woodside Medical Group premises

Cramped spaces, lack of privacy, consulting rooms with no light and no lift access to 5 (45%) consulting rooms on the upper floor.


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2.8.11 Business Scope - Woodside

2.8.11.1 Scope of the Facility

2.8.11 Business Scope – Woodside

The scope is essentially the design and development of facilities that meet the Investment Objectives described in Section 2.16. The list below seeks to outline the scope of the project in relation to the facility to be created.

a) New facilities will be commensurate with

modern healthcare standards and meet all relevant health guidance documentation

b) Within the CHP’s affordability criteria, to achieve value for money in terms of the nature and configuration of the build on the selected site given the site topography and adjacencies

c) The provision of clinical services associated with the development but limited to that defined

d) Comply with the new Scottish Building Standards – Technical Standards introduced in October 2010

e) Establishment of a redeveloped health centre. The extent of the redevelopment will be limited to that required to deliver the services previously noted

f) Develop facilities which take full cognisance of the local environment in terms of the choice of external materials and finishes

g) The design will not be designed in isolation, but should also consider the potential for adjacent developments. This may include potential economies of scale and sharing of some external facilities e.g. road access, pathways, landscaping, car parking and services with neighbouring occupiers

h) Maximise the sustainability of the development, within the CHP’s resources, and meeting the mandatory requirement of “Excellent” under the BREEAM (see Appendix 2f) Healthcare assessment system

i) The development of a design that gives high priority to minimising life cycle costs

j) Achieve “Secure by Design” status k) Comply with all relevant health literature and

guidance including, but not limited to, Scottish Health Technical Memorandum (SHTM), Scottish Health Planning Notes (SHPNs) and Health Briefing Notes (HBNs).

l) Achieve good quality in design using robust materials that meets with the general expectations of the various stakeholders. This


21 January 2013

will be measured by use of the NHS “AEDET” system (see Appendix 2f).

m) Within the relevant guidance, maximise use of natural light and ventilation

n) In conjunction with the Infection Control Team, develop a design that minimises the risk of infection. To facilitate this, the design will be considered in conjunction with the NHS “HAI SCRIBE” system

o) Comply with CEL 19 (2010) - A Policy on Design Quality for NHS Scotland -2010 Revision which provides a revised statement of the Scottish Government Health Directorates Policy on Design Quality for NHS Scotland. CEL 19 (2010

2.8.11.2 Scope of Clinical Services - Woodside

The scope of clinical services to be delivered from

the new Woodside Fountain Health Centre has been discussed earlier in this strategic section of the FBC and are outlined below in summary:

2.8.11.2.1 The plans for the new Woodside Fountain Health

Centre development will see the creation of a multi-agency facility which will accommodate:

• Woodside Medical Group who deliver a full

range of GMS services and a specific range of local enhanced services, see Section 2.8.11.3.

• The Practice Attached Community Nursing

Team who will work with the appropriate Direct Delivery Teams and Social Care Teams across the City, see Section 2.8.11.4.

• A directly operated public dental service,

including community dental service provision for local communities, see Section 2.8.11.5.

2.8.11.2.2 The proposed schedule of accommodation (SOA) is

outlined in Table 7. A summary of the preferred option SOA is included as Appendix 2h.

Table 7

Building User Floor Area (square metres) General Medical Services 1037 Community Health Partnership 145 Dental Practice 282 Gross Internal Floor Area 1464

2.8.11.3 General Medical Services

2.8.11.3.1 Woodside Medical Group will continue to provide

General Medical Service to patients within the


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Practice area which is centred in Woodside. As well as general nursing and GP consulting Woodside Medical Group provides minor surgery, full contraceptive services, high risk medication monitoring, substance misuse programmes, Keep Well programme and full immunisation service. The Practice population has high levels of deprivation and chronic medical problems, including high rate of substance misuse and social problems which require multi-disciplinary working.

2.8.11.3.2 The current premises restrict the flexibility and choice

for the Practice population and are very restrictive for patients with disability. The patient journey will be improved in a more accessible modern setting, designed to cope with patients with disability.

2.8.11.3.3 Woodside Medical Group provides a service of high

quality, despite the limitations of the current premises, and provides full general medical services with high QOF performance. The number of patients seen at the surgery is increasing as more work is being moved from secondary to primary care, so a new purpose built premises will allow for services to be extended to meet demand, with more choice for patients and the convenience of being seen locally.

2.8.11.3.4 The Community Nursing Service and Health Visiting

Service will be co-located in the new premises which will aid communication and sense of team working and provide a more positive experience for patients.

2.8.11.3.5 Training and teaching is important for shaping

clinicians of the future and more training is taking place in General Practice. Woodside Medical Practice has always trained medical students and GP registrars but has been limited in the number and range of trainees it could accommodate due to space. In the new premises the Practice will be able to accommodate more medical students at different stages and also GP trainees and junior hospital doctors on placement. The demographic of Woodside Medical Group’s population makes this an excellent training practice where trainees gain great experience.

2.8.11.3.6 Diabetic care services will be expanded in the new

premises and will include transferring more patients from secondary care clinics and will include starting patients on insulin. It is hoped that the attached diabetic specialist nurse will be able to consult alongside the GPs and improve communication and education for both doctors and patients.


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2.8.11.4 Community Nursing Service and Social Care 2.8.11.4.1 Aberdeen City CHP space in the new Woodside

premises includes provision for the Practice Attached Community Nursing Team who will work with the appropriate Direct Delivery Teams (DDT) and Social Care Teams across the City.

2.8.11.4.2 Aberdeen City CHP has redesigned the structure of

community nursing service over recent years, to build capacity and ensure flexibility to move forward as a sustainable service for the future. It is now a year since the redesign was fully implemented across Aberdeen City. Community nursing services are now delivered in neighbourhood areas by seven Direct Delivery Teams who are able to offer the flexibility of skill mix to ensure nursing resource is being used effectively, efficiently and equitably across Aberdeen City to better reflect demand across the City.

2.8.11.4.3 Additionally there is a Practice Attached Team (PAT)

aligned to each GP Practice within Aberdeen City, which includes a District Nurse. The PAT District Nurse remains responsible for the initial assessment and review of all patients on their caseload but refers their nursing care to the appropriate DDT. The main focus for the PAT District Nurse is to manage and co-ordinate end of life care.

2.8.11.4.4 Integrated working is key to the delivery of

coordinated services for patients being cared for in the community. The integrated Health and Social Care Team will be co-located in the new Health Centre which will facilitate improved care delivery involving the Primary Care Team, Community Nursing Team and the Care Management Team, helping to streamline the delivery of co-ordinated health and social care services for patients.

2.8.11.5 Dental Services

2.8.11.5.1 The public dental service operated in the Woodside

Fountain Health Centre will provide three dental chairs, including provision for disabled and bariatric patients, providing a community and public dental service. • The Community Dental Service is a dental

service for adults and children with complex needs who find it difficult to use general dental services.

• The Public Dental Service will provide increasingly for vulnerable groups and the local community who can find it difficult to access general dental services.


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2.8.11.5.2 The current Woodside premises do not include

dental services. The oral health of the Woodside and wider practice population is known to be relatively poor with very limited access to dental services within that part of the City. NHS Grampian therefore supports improved provision of dental services in this part of the City consistent with the strategy outlined in Section 2.5.1.11.

2.8.11.5.3 Targets for oral health improvement and health

equity have been set within the new draft NHS Grampian Dental Plan. For children, this will largely be delivered through the Childsmile Programme in schools, nurseries and dental practices. It is therefore anticipated that Childsmile will be delivered from the Public Dental Service at Woodside through Dental Nurse-led clinics, thereby maximising the use of skill mixing within the dental workforce. To further promote dental care as a positive experience for children, one day per week would be dedicated solely to the provision of oral health care and dental treatment for children. This will include the provision of oral health education sessions for children and parents/guardians.

2.8.11.5.4 Through the establishment of Childsmile in practice,

there is also an opportunity to increase access to dental care for parents/guardians through improving ease of both opportunistic and targeted registration.

2.8.11.5.5 Co-location with the medical practice serving this

deprived area provides an opportunity for a more integrated approach to multidisciplinary working to increase accessibility to dental services and promote a positive patient experience. This will be further enhanced by ensuring that a range of dental appointment times is offered to suit patient need.

2.8.11.5.6 Over recent years, the dental workforce has evolved

to include Dental Therapists and Hygienists. Through inclusion of these posts in the staff establishment at Woodside, the Dental Officers will be able to focus on the most complex dental care needs, including the provision of services to the medically compromised, special needs patients and, potentially, expansion into intermediate care dental services.

2.8.11.5.7 The percentage of the population requiring access to

bariatric suitable equipment is rising (and is predicted to continue to do so). New dental facilities in Grampian are being equipped with bariatric chairs to ensure capacity across Grampian to meet the needs of this population group.


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2.8.11.5.8 With 75-80% of independent dental practices

(within NHS lists) that have poor premises, and with public expectations of healthcare premises generally higher, it is of paramount importance to have a new, fit for purpose dental facility within the Woodside development. This will ensure a positive experience for patients and enable NHS Grampian to fully comply with the required decontamination and disability legislation. The new Woodside Public Dental service provision will complement the independent sector by providing specialist dental treatments that independent dentists, due largely to the nature of their premises, cannot provide. These treatments include Relative Analgesia, (R.A. Sedation or Conscious Sedation) and Intravenous Sedation, Minor Oral Surgery and bariatric care.

2.8.11.5.9 The Woodside Dental Unit will operate as a public

dental service with both salaried and community provision. It will however work independently of the main building with its own entrance.

2.8.11.5.10 An estimated 50 dental patients will be seen per day,

five days per week. Emergency slots would be allocated so that patients not registered with a dentist could still access emergency dental care in hours. The number of patients per day would vary depending on the organisation of specialist clinics.

2.8.12 Benefits - Woodside

2.8.12.1 On the basis that the required services are put in place, the next sections capture the key benefit criteria and risks associated with the proposed investment. These sections also highlight the main constraints and dependencies associated with the scheme. The Benefits Criteria provide a basis for the non-financial comparison of the options as part of the economic appraisal covered in Section 3 of the OBC.

2.8.12.2 The Benefits Criteria for the project were developed

by the Woodside Project Group, including stakeholders, following a full discussion, with a broad range of suggestions being put forward across the team. They also reflect the Investment Objectives and Critical Success Factors outlined in Sections 2.8.7 and 2.8.6.

2.8.12.3 This was followed by a discussion on the relative

importance of each of the criteria, which resulted in a weighting being applied to each.

2.8.12.4 The weightings used are in increments of 5-20 on the

following basis:


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• 5 – of least (relative) importance – “good to

have” • 10 – important that some element is reflected in

the project • 15 – very important to the project • 20 – fundamental to the project

2.8.12.5 The Benefits Criteria and their weightings are shown

in Table 8. These weighted criteria were used by the Woodside Project Team to evaluate the shortlisted options from a non-financial perspective as part of the option appraisal at OBC stage.

Table 8

Benefit Criteria

Weight

1 Accessibility (location and access to building 20 2 Improves accessibility to full range of GMS

services 20

3 Improved and co-ordinated management of long term conditions

15

4 Flexible, modern, high-quality accommodation 10 5 Capable of providing a medical training

environment 20

6 Safe and secure 15 7 Increased efficiency and integration (both

internally and with community partners) 15

8 Improved patient experience 20 9 Supports strategic aims of NHS Grampian 10 10 Business visibility 5 11 Contribute to recruitment and retention of staff 20

2.9 Delivering the Strategy for Tain

2.9.1 NHS Highland has a published Local Health Plan that adheres to

the national format. This sets out the strategic direction for the Board, provides evidence of performance to date and plans to address the national targets, which are detailed within the Local Delivery Plan. There are six key objectives that form the strategic framework for NHS Highland.

• To continue to improve the health of people in the

Highlands and to reduce the inequalities in health between different sections of our community

• To reduce the time people wait to receive services • To reduce, to an absolute minimum, the chance of

acquiring an infection whilst receiving health care and to ensure our hospitals, clinics and surgeries are clean

• To ensure services delivered are high quality and clinically effective through robust outcomes evaluation

• To treat people with chronic conditions sooner, near to home and earlier in the course of their disease

• To deliver our programme of service modernisation.


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2.9.2 The aim of the project is to both overcome the shortcomings of

the current environment and facilitate and enable changes in service provision to meet the specific needs of the local population. At the same time this will also improve the working environment of the staff and GPs.

2.9.3 Local and national drivers were reviewed to ensure these were appropriately identified and addressed where possible. The work on this aspect of the project was based on an understanding of the implications of the major drivers for change:

• The Health Policy Agenda: which requires quicker, more

flexible access to treatment, a greater emphasis on primary care, ill health prevention, health promotion, integration of health and social care and changing roles of healthcare professionals

• New technologies; changing clinical practice, internet, telecommunication and IT advances

• Changes in society; meeting the demographic changes including the ageing population

• The future patient; what does the patient need, want and expect:

• Quicker and more flexible access to treatment • Good quality relationships with health professionals • Better and more information about treatments, choice etc.

2.9.4 Critical Success Factors – Tain

2.9.4.1 Notwithstanding the desire that all investment objectives and resulting benefits will be achieved, the key stakeholders met and reviewed the factors considered essential to this scheme and identified the following limited list of Critical Success Factors deemed essential to the project being considered successful.

1. The achievement of the project within the

available affordability envelope for NHS Highland (revenue funding)

2. Deliver facilities that enable clinical effectiveness to be delivered, in terms of improving health in the catchment area and assisting NHSH in meeting health and social care targets

3. Deliver facilities that enable the existing and currently planned enhancement to clinical services to be delivered including the incorporation of Dental Services.

4. Compliance with all relevant Health Guidance (unless otherwise agreed as being in-appropriate) including HAIScribe guidance to ensure facilities are commensurate with current


21 January 2013

policy and reduce the risk of health related infection spread (see Section 3.10.2).

5. Avoid any significant disruption to existing clinical services in local areas.

6. Quality – Delivery of key stakeholders (including community representatives) expectations (where these match the brief) is critical to the success of the project. “AEDET” (see Appendix 2f) reviews will be undertaken and will achieve a minimum target score of 4/6 in all categories.

7. Sustainability. The achievement of BREEAM Healthcare “Excellent” for new build or “Very Good” for refurbishment development is critical to the project success (see Appendix 2f).

8. Increase staff morale and assist recruitment and training of talented staff.

2.9.5 Investment Objectives - Tain

2.9.5.1 A review of the Investment Objectives arrived at as

part of the Initial Agreement process was undertaken to ascertain that they were still valid for the project. The review confirmed the key investment objectives for the project and determined SMART objectives in accordance with the SCIM guidance (including baseline data for measurement and timing of assessment of the objectives) is provided.

2.9.5.2 Tain Health Centre has an important strategic

location in relation to the neighbouring Health Centres/GP Surgeries, and in its role in the network of facilities provided in the area. A project to re-design, develop and improve services in Tain is considered an essential component of these objectives. A summary of the SMART objectives is provided in Table 9.

Table 9

Investment Objective Heading

Objective Details

Align with CSF

SMART SMART Baseline Measure

1

Effective use of unit resources

To ensure breakeven position within financial resources.

1, 3, 5,

Measurement against agreed position

2 Effective and efficient clinical services

To meet all components of the clinical service plans outlined within NHSH and local plans.

2, 3, 4 Measurement of the alignment with agreed targets and trajectories within local plans

As identified within the Benefits Realisation Plan


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Objective Details Align with CSF


3 Expand range

of services and promote emerging model of care including preventative & self care

To meet the target of ‘implement self-management’ within the Tain area in terms of expansion of range of products and services that will help local people adopt healthier lifestyles and maintain independence. To meet all key Long Term Conditions Program targets.

3, 4 Measurement of current achievement of targets and those identified within the Benefits Realisation Plan

Agreement of baseline targets and current achievement information with reference to the Benefits Realisation Plan

4 Provide a patient centred service acceptable to patients and the Community

To ensure delivery of a person centred service. To ensure conclusion of project review and continued mechanism for community and staff liaison. To develop and deliver all key milestones in “Better Together”.

2, 5, 6

Baseline of patient feedback as identified within the Benefits Realisation Plan

Record key milestones and measurement criteria and current achievement with reference to the Benefits Realisation Plan

5 Facilitate the introduction of new ways of working and in particular effective collaborative/ partnership working.

Ensure delivery of the joint working components of the NHS and local plans which will enable integrated care to be developed.

3, 8 Details contained within the Benefits Realisation Plan

Ascertainment of key collaborative working objectives and current performance details including those identified within the Benefits Realisation Plan


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7 Provide easy

and equitable access to services (closer to point of requirement)

To meet all components of the Boards Equality and Diversity policy. To ensure delivery of access targets within HEAT and the balanced scorecard.

2, 3, 4

Patient survey / measurement against HEAT targets

Current assessment

8 Address health inequalities

To ensure delivery of key result areas in the JHIP and health improvement components of local plans.

2 Measurement against local and national Health improvement targets

Current Health Survey Local and National / Ascertain targets

9 Retention and recruitment of staff.

Deliver and maintain targets in terms of absence and staff turnover and to provide a working environment which sustains recruitment.

8 Staff Measure improvement in staff morale, absence and turnover identified within the Benefits Realisation Plan

Details of current staff exit interviews and existing staff turnover details

10 Enhance the sustainable footprint of healthcare facilities within the Tain area and promote alternative forms of transport

Deliver facilities that when completed achieve rating of BREEAM “Excellent” (or “Very Good” for refurb) and NHS Highland’s Environmental Policy in relation to carbon dioxide emissions.

7 Measurement against Local and National targets for environmental building

Baseline position and ascertain targets


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11 Quality and

functional efficiency of physical environment

Achieve a minimum target score of 4/6 in relation to all the AEDET categories in line with the AEDET review which will be undertaken at key stages in the project including post-completion.

6 Undertake AEDET reviews at key stages of project

AEDET review information

12 Flexible and adaptable property to allow delivery of NHS Highland’s overall Strategic plans

Flexibility and adaptability of all areas addressed by the project to significantly improve upon that assessed prior to works commencement (see Section 3.3.9.2) and also to meet requirements of AEDET review

3, 6 Interim review with staff and patients with regard to flexibility of the building

Baseline review to take place. Ascertainment of potential NHS Highland overall strategic plans


2.9.6.1 The sustainability and design quality requirements

required are outlined in appendix 2f In relation to:

• The Building Research Establishment’s Environmental Assessment Method (BREEAM) and;

• The Achieving Excellence Design Evaluation

Toolkit (AEDET)

2.9.6.2 The current Tain premises have been reviewed using the AEDET toolkit the results at outlined in Figure 12 demonstrates that this building scores poorly at between 1.0-3.0 in all ten categories, the target is 4-6 in all categories.


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Figure 12

2.9.7 Existing Service Arrangements – Tain

2.9.7.1 The Board estate comprises a number of Healthcare facilities located throughout the region. However this FBC relates to the development of services and facilities associated within Tain Health Centre.

2.9.7.2 Primary and community health services for the Tain

area, and some area wide services, are currently provided from Tain Health Centre. The existing Health Centre is a single storey building some 37 years old. A further description and details of the deficiencies and constraints of the building is provided in section 2.9.8.8.

2.9.7.3 The following services are provided from Tain Health

Centre by the two GP Practices and Community and Primary Care services operating from the facility.

2.9.7.4 Tain and Fearn Medical Practice:

• General Medical Practice (7 GPs and a Practice Team)

• Teaching of medical students. • Some minor surgery; the amount constrained

by the facilities

2.9.7.5 Tain and District Medical Practice: • General Medical Practice (4 GPs and a

Practice Team). • Nurse Practitioner services. • Triage Nurses. • Some minor surgery; the amount constrained

by the facilities


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2.9.7.6 Community Health and Social Care Team providing

Primary Care services: • Treatment Room Nurses • Social Care Services • District Nurses • School Nurses • Occupational Therapy • Podiatry • Physiotherapy

2.9.7.7 A number of services provided on a visiting basis:

• Aneurysm screening • Midwife Antenatal Clinic • Psychiatry • Psychology • Community Psychiatric Nurses • Addictions services • Smoking cessation • Paediatric dermatology clinics

2.9.7.8 Tain Salaried Dental Clinic

The Salaried Dental Team is based in leased premises in Tain with accommodation over the first and second floors. The team provides the following services: • Continuing and emergency care for the

registered patients of the clinic • Fast track into care for those children without

access to dental services • Unscheduled care for people that are not

registered with a Dentist There is currently no GDP practice in Tain and the introduction of a GDP practice will ensure additional service is available for those whom access to dental services through the GDP business model is the preferred option. This in turn will free up capacity within the Salaried Team to ensure access in the local community for the rise of the population living with chronic diseases, long term conditions and those with additional support requirements where strong community support is required, promoting a strong multi-sectoral approach to prevention. All Primary Care Dental Services will now be locally accessible for those patients with limited mobility.


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2.9.8 Existing Premises Arrangements - Tain

2.9.8.1 The Health Centre was built in the 1970s and the physical condition of the premises is of a standard that is representative of a building over 35 years old which fails to meet modern healthcare standards in terms of functional requirements, special needs, compliance with current clinical guidance, fire regulations and infection control measures. Furthermore there is a significant backlog in maintenance, and with plant and equipment at an age which is well beyond their design life, and hence inefficient in terms of its energy use and carbon footprint.

2.9.8.2 Due to the significant changes that have taken place

over the last 35 years in the NHS, including expansion of Primary Health Care Services, and more recently integration of social care for adult services, the accommodation is cramped throughout and is characterised by inadequate GP consulting rooms, severely limited community staff accommodation and overcrowded and noisy waiting areas. Hence, the experience for patients who are receiving care in these conditions is not pleasurable. Similarly, staff working in the building are constantly frustrated by a lack of space and the poor functional suitability of the buildings and inevitably this impacts upon their ability to deliver effective and efficient services.

2.9.8.3 The current service provided in Tain Health Centre is

unable to support the required focus on reducing inequalities in health set out in “Better Health, Better Care”. In recent years the expansion of primary care has resulted in new services being developed which the building has been unable to accommodate. There are also a number of services which practices and the Board would wish to develop, in accordance with the proposed model of care in the future e.g. enhanced services under the GMS contract. These would be impossible to provide in the existing facilities. Lack of appropriate accommodation for locally based clinical services and community teams has restricted their development and not enabled these benefits to be delivered to date. The recruitment of general practitioners, nurses, AHPs, social workers, and support staff with the ability to provide the wide range of services needed in the proposed model of service provision is becoming increasingly more difficult as the facilities become increasingly inadequate.

2.9.8.4 In summary it is considered that the existing service

provision in the Tain Health Centre fails to provide:


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• A platform for sustaining and expanding clinical

services, in line with the current model of primary care

• Facilities which allow a fully patient centred service and “one stop shop” for all primary care services

• Modern facilities and design that meet the required standard for health related infection

• The required focus on reducing inequalities in health set out in “Better Health, Better Care”.

• A platform for meeting satisfactory levels for attracting and retaining suitable levels and calibre of staff

• Facilities which have a satisfactory carbon footprint due to the poor functional layout and building inefficiencies

• Facilities which meet the required quality standards

• Facilities which are flexible and adaptable • Facilities that enable effective and efficient use

of the Board’s resources

2.9.8.5 The Tain Salaried Dental team provide services from leased premises to the rear of the High Street. There is no car parking available and the accommodation is spread over the first and second floors without lift access.

2.9.8.6 In 2005 NHS Highland took over the lease at short

notice from a GDP practice that was unable to recruit Dentists. At that time NHS Highland’s Estates department provided an assessment which confirmed that the premises did not have the capacity to fully comply with the requirements of Disability Discrimination Act (DDA) or Decontamination. As there were no alternative premises available the decision was made to enter into a short term lease. A number of minor refurbishments were made to the premises to manage the risks associated with the accommodation in the short/medium term.

2.9.8.7 The lease will terminate on 2 April 2014 and at this

time the landlord has agreed that thereafter a monthly lease would be agreed pending the provision of the new Tain Health Centre facility.

2.9.8.8 In a report prepared by the NHS Highland Health and

Safety Manager for the former Mid Highland CHP, the following examples of shortcomings of the current health centre were noted.


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Figure 13 Poor Access to the Health Centre.

1. External Areas – Limited parking on site. Parking on busy road. Disabled parking is not adjacent to site. Drop kerb area is in the wrong place. All area is on a slope making it difficult for staff and patients, especially disabled to access site. Non welcoming ambience to the Health Centre. Door access not Disability Discrimination Access compliant e.g. lip on door frame.

2. Internal Areas – Staff area is too small to

provide proper compliance with Workplace Health Safety and Welfare Regulations. Only one small room to provide group work such as smoking cessation and healthy weight classes. This room also contains a refrigerator and electrical equipment rendering it unsafe for minors and children. Existing provision has an extension for storage, office, toilet and clinical care areas. No room to provide essential modern care in a safe and healthy environment. Non compliance with fire regulations. Flat roof creates dampness issues.

3. Non Compliance with NHS Scotland, NHS

Highland strategic aims, development programmes and plans.


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Shifting the Balance of Care – Strategic Aim is to improve health by shifting to preventative and continuous care delivered locally. Examples - Extend the range of services provided outside hospital - Not possible within the existing envelope. Improve access for rural populations e.g. invest in tele-healthcare facilities for specialist clinics – No facilities for such care in the existing facility. Improve access to re-habilitation across the area – Very limited access in current facility. Stay well programmes for the elderly – no proper facilities for the provision of this type of care.

Anticipatory Care – Develop care planning for

patients with complex needs – Infrastructure not possible under current set up. Prevention of hospital admission – Potential to increase primary care services in current facility is not conducive to this.

4. Governance Principles (Safe, Quality, Patient-

centred Clinical Care. Staff Welfare and Safety):

• Safety – Patients will be cared for in an

environment that minimises risk - Clear risks to patients in the current environment

• Reducing Inequalities - NHS Highland will work to ensure equity of access and reduce inequalities in healthcare. This will include a “one stop shop” for care

• Staff will work in a safe environment which minimises threats to their health and wellbeing - The current facility is not a suitable one due to the already stated reasons

Figure 14

The waiting areas are cramped and have little privacy for patients speaking to reception staff.


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Confined staff working area

2.9.8.9 The NHS Highland Property Asset Management

Strategy envisages a long term future for a health centre in Tain. In view of Tain’s strategic position within the local region, and the fact that it currently provides a focal point for a wider community than just residents of the town. The alternatives would involve the patients and staff travelling considerable distances to access alternative facilities.

2.9.9 Business Scope - Tain

2.9.9.1 The project scope is essentially the design and

development of facilities that meet the Investment Objectives described in section 2.9.5, Table 9. However, in order to establish project boundaries, a review was undertaken by key stakeholders, and the following items were established in relation to the limitation of what the project is to deliver.

• New facilities will be commensurate with

modern healthcare standards and meet all relevant health guidance documentation.

• Within affordability criteria, to achieve value for money in terms of the nature and configuration of the build on the selected site given the site topography and adjacencies.

• The provision of clinical services associated with the development but limited to that defined.


21 January 2013

• Comply with the new Scottish Building Standards – Technical Standards introduced in October 2010.

• Establishment of a redeveloped Health Centre. The extent of the redevelopment will be limited to that required to deliver the services previously noted.

• Develop facilities which take full cognisance of the local environment in terms of the choice of external materials and finishes.

• The design will not be designed in isolation, but should also consider the potential for adjacent developments. This may include potential economies of scale and sharing of some external facilities e.g. road access, pathways, landscaping, car parking and services with neighbouring occupiers.

• Maximise the sustainability of the development, within available resources, and meeting the mandatory requirement of “Excellent” under the BREEAM Healthcare assessment system.

• The development of a design that gives high priority to minimising life cycle costs

• Achieve “Secure by Design” status • Comply with all relevant Health literature and

guidance including, but not limited to, Scottish Health Technical Memorandum (SHTM), Scottish Health Planning Notes (SHPNs) and Health Briefing Notes (HBNs).

• Achieve good quality in design using robust materials that meets with the general expectations of the various stakeholders. This will be measured by use of the NHS “AEDET” system.

• Within the relevant guidance, maximise use of natural light and ventilation

• In conjunction with the Infection Control Team, develop a design that minimises the risk of infection. To facilitate this, the design will be considered in conjunction with the NHS “HAIScribe” system

• Comply with CEL 19 (2010) - A Policy on Design Quality for NHS Scotland - 2010 Revision which provides a revised statement of the Scottish Government Health Directorates Policy on Design Quality for NHS Scotland. CEL 19 (2010) also provides information on Design Assessment which is now incorporated into the SGHD Business Case process.

2.9.9.2 The clinical services which will be provided from any

redevelopment will be focused on the needs of the local community, integrated with extended primary health and social care teams within the Tain area and other local GP surgeries and health centres. This will


21 January 2013

comprise the following Clinical Services, divided into categories considered essential (“Core Minimum” and those that are desirable (“Aspirational”) :

2.9.9.3 Core Minimum

• Provision of Dental Services for the local

community including those with additional support needs and those in marginalised and impoverished groups within a building that serves the needs of the local community and complies with current guidance and legislation.

• All existing GMS clinical services including minor surgery provided from Tain Health Centre, in addition to Dental Services.

• Potential for accommodating other health and social care professionals as part of a network approach.

• Adequate provision for all child health record storage for the entire locality to comply with current legislation/guidance.

• Additional services (and/or an increase in the capacity) associated with the following clinical services.

• Minor surgery – currently inadequate facilities • Phlebotomy services- currently inadequate

facilities • A range of clinics which require to be delivered

within the primary care setting e.g. mother and baby clinics, pain clinics, mental health needs, specialist diabetic clinics and adult dermatology clinics. There is currently insufficient space and currently inadequate facilities to accommodate most of this.

• Enhancement of self-care through individual and group sessions; currently inadequate facilities

• Further enhancement of services to improve the reduction in and management of long-term conditions

• Dedicated podiatry room, as service is provided by a full-time podiatrist

2.9.9.4 Aspirational

• Family Planning Services • An increase in Community Psychiatric Nursing

Services • Social work services • Physiotherapy rooms and exercise area • Medical library facilities • Interview room with privacy for patients • Separate meeting room (shared between

practices) • Adequate storage and IT facilities


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2.9.9.5 Art in Health Buildings; Works of art and craft can

contribute greatly to health and well-being. Ideally local artists will be involved in integrating meaningful art works into the health centre.

2.9.9.6 External views and landscaping; the connection of

waiting areas and staff work areas and restrooms to the natural landscape is known to contribute to well-being and to relaxation. Consideration will be given to designing these areas to have an outlook to a planted area or to views of nature.

2.9.10 Benefits - Tain

2.9.10.1 Key stakeholders have given further consideration to

the Investment Objectives (section 2.9.5) in order to establish the relative value of each objective, the key benefits and beneficiaries, and the potential benefits criteria that have been used during the Outline Business Case stage, to assess the options.

• Achieve improved efficiency associated with the

whole life costs of the building • Integration of dental services • Improve the patients’ journey by providing a

one stop shop.

2.10 FWT Bundle Risks

2.10.1 The main project risks are detailed in the project Risk Register in Appendix 2j. The approach to risk management for the project is outlined in Section 6.10.

2.10.2 This section seeks to outline the key organisational risks for

each project to be considered in making the right decision on how to proceed. The key organisational risks are outlined in Table 10.

Table 10

Risk Pro

bability

Impact

Mitigation

Forres

Local community groups continue to lobby for suitable services in their community.

4 2 Seek to meet the needs and where possible the aspirations of the local community.

Lack of opportunity for integration and collocation of community teams hampers the delivery of coordinated community services.

4 3 Where possible co-locate integrated teams to encourage joint working and streamlined coordinated services.


21 January 2013

Access to primary care services in Forres continues to be a significant perceived problem

3 5 Ensure that effective processes and IT technology allows for good management of access to primary care services.

Accommodation constraints limit the range of services available to community with poor health

4 5 Provide accommodation to meet the needs of the patient population.

Woodside

A community known to have significant health inequalities does not have access to adequate general medical services.

4 4 Provide appropriate fit for purpose accommodation to meet the needs of the community.

Vulnerable people particularly those with physical disability find it hard to access medical services.

4 3 Ensure all accommodation and services are accessible to vulnerable communities.

Accommodation constraints limit the range of services available to community with poor health


A community known to have poor oral health does not have access to dental services.

4 3 Provide local accessible dental services.

Insufficient capacity in City for the training of medical trainees.

3 4 Increase access to medical training opportunities and provide adequate accommodation to facilitate training.

Current premises continue to fail DDA requirements.

5 4 Invest in making premises DDA complaint, assuming it is feasible.

Severe lack of car parking continues to be a barrier to access.

5 4 Provide adequate car parking to facilitate good access to services.

Local community groups continue to lobby for suitable services in their community.

4 2 Seek to meet the needs and where possible the aspirations of the local community.

Lack of opportunity for integration and collocation of community teams hampers the delivery of coordinated community services.

4 3 Where possible co-locate integrated teams to encourage joint working and streamlined coordinated services.

Tain

Vulnerable people particularly those with physical disability find it hard to access dental services.

4 3 Ensure all accommodation and services are accessible to vulnerable communities.


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Accommodation constraints limit the range of services available to community.


Insufficient capacity for the training of medical trainees.

3 4 Increase access to medical training opportunities and provide adequate accommodation to facilitate training.

Current premises, particularly dental, continue to fail DDA requirements.

5 4 Invest in making premises DDA complaint, assuming it is feasible.

Severe lack of car parking, particularly dental, continues to be a barrier to access.

5 4 Provide adequate car parking to facilitate good access to services.

Probability and Impact Matrix Impact 5 5 10 15 20 25

4 4 8 12 16 20 3 3 6 9 12 15 2 2 4 6 8 10 1 1 2 3 4 5 1 2 3 5 5

Probability 2.11 FWT Constraints and Dependencies

Table 11 below seeks to summarise the main constraints and dependencies to be considered by the project team.

Table 11

Financial Projects must demonstrate value for money and be affordable to NHSG, NHSH, SGHD and the five Medical Practices involved in the three projects. An agreed funder must be identified with terms that are agreeable to all key stakeholders. All five GMS Practices, and the GDP partner practice when identified, require to enter into ‘Occupation Agreements’ with NHSG and NHSH after Financial Close.

Commercial The Bundle DBFM project agreement must be agreed by all relevant parties (SGHD, SFT, hubCo, NHSG and NHSH).

Programme The programme must be robust and deliverable, construction cannot proceed until Stage 2 is complete, appropriate KSR approvals and OBC and FBC approvals are in place.


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Quality The preferred design solutions should achieve an AEDET Score of 4 – 6 in all 10 categories. The designs are compliant with the Authority Construction Requirements.

Acquisition The land is in the ownership of NHSG and HNSH on behalf of the Scottish Ministers, prior to financial close.

Planning The additional biomass planning consent for Woodside is in place and the judicial review period is complete prior to financial close if applicable. Aberdeen City Council re-provide the football pitch currently located on the preferred site at the agreed alternative location in Woodside. Five care home parking spaces are built and available for health centre use before the Tain Health Centre opens. NHSG reprovide the football pitch at Forres, currently located on preferred site, at the agreed alternative location. Agreement with adjacent care home operator on sharing services where appropriate is reached in relation to the Tain Project.

Sustainability The BREEAM pre-assessments demonstrate the potential to achieve BREEAM excellence if at all possible.

Service The existing facilities continue to deliver services until the new facilities are in full operation.


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3. THE ECONOMIC CASE 3.1 Introduction

3.1.1 In accordance with the Scottish Capital Investment Manual and

requirements of HM Treasury’s Green Book (A Guide to Investment Appraisal in the Public Sector), this section of the FBC provides evidence to show the most economically advantageous offer has been selected, which best meets service need and optimises value for money.

3.1.2 The Forres Community Health and Care Centre, Woodside

Fountain Health Centre and Tain Health Centre are a “Bundle” of three projects being taken forward as a single hubCo DBFM Service Concession Contract within NHS Scotland, utilising revenue funding.

3.1.3 The OBCs for all three of the projects assumed a capital funding

solution when undertaking the economic appraisal and ranking of the various options in order of value for money. In the cases of Forres and Tain, this is because they were originally intended to be funded using NHS Capital. This approach was also chosen for the Woodside OBC in order to be consistent with the other two projects.

3.1.4 The OBC for Woodside and the OBC addendums for Forres and

Tain were submitted for approval in November 2012. These documents presented the preferred options as being procured via the hubCo revenue route.

3.1.5 The preferred options are being procured, measured and tested

through intensive evaluation of hubCo proposals and best value has been demonstrated against bench mark provisions. This has been achieved in part through the various stages by utilising the skills and expertise of our Technical and Financial Advisors.

3.1.6 Following submission of the OBC and OBC Addendums, the

Boards have agreed with the SGHD to run specific elements of the programme to Financial Close in parallel, in order to bring this forward to 2012/13. As a result of this, the formal Stage 2 submission from hubCo will not be completed until 4 March 2013. Therefore, the FBC is based upon the work that has been progressed to date.

3.1.7 As stated above, at OBC stage, separate documents for each

project within the Bundle were submitted for approval. However, at FBC stage, these have been consolidated into one document. This is due to the nature of the contract being entered into with hubCo. Therefore, the economic case sets out the process for all three projects.

3.1.8 Within the Economic Case, we have:


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• Provided a short summary of the OBC economic appraisal process that was undertaken in order to determine the preferred options.

• Described the preferred options, how the objectives have

been met through clinical modeling and how design responds to those requirements.

• Set out how the investment will deliver real and ongoing

benefits for the patients and public within the catchment areas of the three projects.

3.2 OBC Stage Short Listed Options

3.2.1 Having established the Investment Objectives and the Benefits Criteria for each project, the next stage was to generate the options to be studied in order to take forward the Projects.

3.2.2 Using option appraisal and analysis techniques, the project

teams for each of the three projects led workshops to create a list of options, which were then taken through the investment appraisal process. This process scored and ranked, by number of points, each option according to their non-financial benefits.

3.2.3 This section provides a summary of the various options that were

considered in order to replace each of the current buildings in Forres, Woodside and Tain.

3.2.4 The options taken forward to the investment appraisal for each

project are listed below in Tables 12, 13 and 14 below: Table 12

Forres Short List Options Option 1 Do minimum upgrading works to existing building Option 2 Upgrade Leanchoil Hospital and co-locate Forres Health Centre on Hospital site Option 3 Replace Leanchoil Hospital and Forres Health Centre Option 4 Build new Community Health Centre

Table 13

Woodside Short List Options

Option 2 Do minimum (investment in structural and DDA works)

Option 3 Complete redevelopment of existing site Option 4a New build on site adjacent to Marquis Road


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Table 14

Tain Short List Options Option 1 Do Nothing Option 2 Extend Health Centre Option 3 New Build

3.3 OBC Stage Non-Financial Benefits Appraisal

3.3.1 The Options Scoring Methodology

The option scoring exercises were undertaken for each project across a range of time-scales, by different people and by two different Health Boards. As a result, the scoring criteria differ between the projects. A summary of the option scoring and ranking exercises for each of the three projects is shown below.

3.3.2 The Options Scoring and Ranking

The summarised scores and rankings for each option, together

with confirmation of the preferred option from the non-financial benefits appraisal, across the three projects are shown in Tables 15, 16 and 17 below:

Table 15

Forres Short List Options Score Rank Option 1 320 4 Option 2 375 3 Option 3 860 1 Option 4 845 2

3.3.3 Applying the benefits criteria ranking for Forres demonstrates

that the preferred option is Option 3 “build a new community hospital and health centre”. However, the economic appraisal and affordability demonstrates that the project which has the greatest value for money and which therefore became the preferred option, is option 4 “New Build Community Health Centre”.

Table 16

Woodside Short List Options Score Rank Option 2 250 3 Option 3 455 2 Option 4a 685 1


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3.3.4 Applying the benefits criteria ranking for Woodside demonstrates that the preferred option is Option 4a “new build on site adjacent to Marquis Road”.

Table 17

3.3.5 Applying the benefits criteria ranking for Tain demonstrates that the preferred option is Option 3 “new build”.

3.4 Investment Appraisal/Value for Money Analysis

3.4.1 The investment appraisal of each option is set in the context of the guidance provided in the Scottish Capital Investment Manual. Following the scoring of the non-financial benefits, a Generic Economic Model (GEM), using the discounted cashflow technique (DCF), was applied to the costs (exclusive of VAT and capital charges) to derive the comparative cost implications of each of the options in the form of Equivalent Annual Costs (EAC) and Net Present Costs (NPC).

3.4.2 Value for money is defined as the optimum solution in terms of

comparing qualitative benefits to costs. This analysis has been performed on an economic annual cost basis by dividing EAC by the weighted benefit points to arrive at a comparable economic appraisal, in line with HM treasury guidance, and the results are shown in Tables 18, 19 and 20 below.

Table 18

Cost per Forres Short List Options

Benefit Score NPC £K EAC £K

Benefit Point £ Rank

Option 1 320 4439 258 806 3 Option 2 375 8830 512 1365 4 Option 3 860 9068 526 612 2 Option 4 845 6892 400 473 1

3.4.3 The investment appraisal of the Forres options resulted in option

4 “New Build Community Health Centre” having the highest rank in terms of value for money. Option 3 has a slightly higher benefit score, but represents lower value for money than option 4. Option 3 was also deemed to be unaffordable at the time of the appraisal and this remains the case at FBC stage.

Tain Short List Options Score Rank Option 1 1522 3 Option 2 1661 2 Option 3 2773 1


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Table 19

Cost per Woodside Short List Options

Benefit Score NPC £K EAC £K


Option 2 250 102 11 44 1 Option 3 455 8312 315 692 3 Option 4a 685 6042 229 334 2

3.4.4 The investment appraisal for Woodside resulted in Option 2 “Do

Minimum” having the best ranking in terms of value for money. However, Option 2 scores poorly on benefit points. The “Do Minimum” Option was not considered a suitable solution as it did not meet the investment criteria and was included for baseline purposes only, the preferred Option therefore became the option ranked second for value for money – Option 4a “New Build Adjacent to Marquis Road”.

Table 20

Cost per

Tain Short List Options Benefit Score NPC £K EAC £K


Option 1 1522 880 32 21 1 Option 2 1661 N/A N/A N/A N/A Option 3 2773 7195 307 111 2

3.4.5 The investment appraisal was undertaken for Options 1 and 3,

as Option 2 was considered untenable due to the current site not having the necessary expansion space. The highest ranked value for money option was Option 1 “Do Nothing”, however since this option is not acceptable and was used for baseline purposes only, the preferred option became Option 3 “New Build”.

3.5 The Preferred Options

3.5.1 The table below summarises the preferred options which have

emerged from the economic appraisal exercise. Table 21

Cost per Benefit NPC EAC Benefit Preferred Options Score £K £K Point £ Forres - Option 4 New Build Community 845 6892 400 473 and Health Centre Woodside - Option 4a New Build Health Centre Adjacent to 685 6042 229 334 Marquis Road

Tain - Option 3 New Build Health Centre 2773 7195 307 111


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3.5.2 More information about each of the preferred options are set out

in sections 37, 3.8 and 3.9. 3.5.3 Section 5 (The Financial Case) describes how the preferred

options will be taken forward with hubCo and the preferred lender. It also analyses the affordability of the preferred options and the associated lending deal.

3.6 Risk Assessment The project risk register, included as Appendix 2j, outlines the current

project risks. Each risk is reviewed by the Joint Project Group on a regular basis and escalated as appropriate to the Project Board.

Table 22 below outlines the high risks for the project. There are currently

no ‘very high’ risks.

Table 22 Key Specific FWT Bundle Risks

Risk Probability

Impact

Mitigation

Stage 2 approval is not achieved consistent with agreed programme.

3 5 Thorough monitoring of agreed Stage 2/FC programme at regular core group meetings and weekly tracker update to review progress. Commence dialogue now with all approvers including Motts.

Design Development/ Approval Programme doesn’t allow stage 2 submission as programme.

3 4 Programme now in place which details design release schedule. hubCo to ensure design team adherence to release programme, NHS to ensure sufficient participant approval resource.

Changes in the bank lending rate prevents financial close.

2 5 Continue discussions with Aviva and others, regular meetings now to be called with Baker Tilly to close down and ascertain exact situation and impact on Stage 1 unitary charge.

Preferred Funder terms removed/adjusted/changed up to Financial Close.

3 4 Early dialogue with funders to fix terms as soon as possible. EF to monitor through Baker Tilly.

Agreement of the revised Project Agreement delays programme.

2 5 Early dialogue with hubCo and SFT to outline implications and resulting actions and implement actions e.g. Interface Agreement.


21 January 2013

Key Specific Forres Risks

Risk Probability

Impact

Mitigation

The football pitch requirements with Planning/Sports Scotland exceed Stage 1 allowance.

4 3 Proposals costed by hub. NHSG to meet with Planning to agree requirements within available cost envelope.

Failure to achieve BREEAM Excellent within budget.

5 3 Current BREEAM assessment indicates Very Good. Report to be produced outlining why Excellent is unachievable and how Very Good will be achieved.

Key Specific Woodside Risks Risk Pro

bability

Impact

Mitigation

Biomass planning decision refused or needs to be considered by full council and the resulting judicial review period.

3 4 Objection period expired 6 December 2012. Planners have confirmed verbally that consent is in place, paperwork being progressed.


5 3 Current BREEAM assessment indicates Very Good. Report to be produced outlining why Excellent is unachievable and how Very Good will be achieved.

Key Specific Tain Risks

Risk Probability

Impact

Mitigation

Land purchase delays beyond current programme (15 February 2013).

2 5 Regular contact will be maintained with Highland Council and Central Legal Office to ensure land purchase completed by FC.

Non cash limited dental funding is not agreed for the Tain/Woodside projects.

3 5 Adverts will be placed for a General Dental Practice to take over half the new dental premises, the fallback position is that NHSH will underwrite the accommodation costs of the new development.


5 3 Current BREEAM assessment indicated Very Good. Report to be produced outlining why Excellent is unachievable and how Very Good will be achieved.


21 January 2013

3.7 Development of the Preferred Option – Forres

3.7.1 The preferred option is Option 3. A new build on the Grantown Road site, see Figure 15. 1:200 Plans for the preferred Option 4(a) are included in Appendix 3a.

3.7.2 The briefed GIFA was 2,336m2 (see Appendix 2g). During

design development to Stage 1 Submission the GIFA has increased to 2,364m2. Table 23 seeks to reconcile the original brief with the current costed Stage 1 design.

Table 23

Building User Briefed Floor Area m2 at OBC

Actual Floor Area m2 with partitions out

Actual Floor Area m2 to reflect Stage 1

General Medical Services 1,624 1225 1552 Community Health Partnership 712 640 812 Gross Internal Floor Area 2336 1865 2364

3.7.2.1 Whilst the two GP practices will remain as

independent business entities, they will operate collaboratively in the flexible use of consulting, meeting and other appropriate space. This will be necessary to ensure the continuing theme of more integrated working with other professional colleagues and partners (e.g. students, visiting consultants / specialists, partner agencies etc.) In addition, other accommodation will be shared, as a matter of course (e.g. waiting areas, toilets, meeting/teaching rooms, waste disposal areas, DSR’s, multipurpose rooms, etc.

3.7.3 Location of Preferred Option

3.7.3.1 The preferred site is located on the Grantown Road in Forres. The site was purchased from Moray Council.

3.7.4 Acquisition of the Preferred Site

3.7.4.1 The preferred site is in the ownership of NHSG on behalf of the Scottish Ministers. The missives for the purchase of the acquired site were exchanged with Moray Council in October 2009.

3.7.5 Planning Permission for the Preferred Site

3.7.5.1 Full planning consent for the development was

granted in March 2012. The relocation of the football pitch is a condition of the consent and a Section 75 requires a financial contribution of £12k to public transport.


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Figure 15 Forres Site Drawing

3.8 Development of the Preferred Option - Woodside

3.8.1 The preferred option is Option 4(a). A new build on the Marquis Road site close to the existing Woodside Community Centre, see Figure 16. 1:200 Plans for the preferred Option 4(a) are included in Appendix 3b.

3.8.2 The briefed GIFA was 1464m2 (see Appendix 2h. During

design development to Stage 1 Submission the GIFA has increased to 1591m2. Table 24 seeks to reconcile the original brief with the current costed Stage 1 design.

Table 24




General Medical Services 1037 993 1079 Community Health Partnership 145 172 187 Dental Practice 282 303 325 Gross Internal Floor Area 1464 1468 1591

3.8.3 The reasons for variance between briefed area and actual area

outlined in Table 24 are detailed below. The briefed area is for a standard two storey practice and whilst percentage allowances are made for circulation, common facilities, plant, etc. the actual layout may differ depending on actual site conditions and building layout. This is particularly true at Woodside where, due to site constraints, the development covers three storeys serving different user groups on each level. The drawn Stage 1 GIFA area of 1591m2 (Column 3) includes allowance for internal partitions which was not included in the briefed net internal area at 1464m2 (Column 1).


3.8.4.1 The preferred site is located in the Woodside area of

the City on Marquis Road, currently in the ownership of Aberdeen City Council, see Figure 16. The District Valuer was jointly appointed by the parties


21 January 2013

and a valuation of £…… was recommended and agreed.


3.8.5.1 The missives for the purchase of the Marquis Road

site were exchanged on 30 November 2012 and are subject only to receipt of a satisfactory biomass planning consent.


3.8.6.1 Full planning consent for redevelopment of the

Woodside Premises on the Marquis Road site was obtained from Aberdeen City Council in November 2011.

3.8.6.2 During the design development period the building

regulations have changed and it has been necessary to change the proposed heating system for the building from mains gas to biomass using wood chip pellets. This change will help to ensure an energy efficient, low carbon building and will contribute to BREEAM. This change did however require another planning application to ACC specifically in relation to the introduction of a biomass boiler as the main heat source. IA planning application for biomass boiler was submitted to ACC on 9 November 2012 and planning consent is expected in January 2013.

Figure 16 Woodside Site Drawing

3.9 Development of the Preferred Option – Tain

3.9.1 The preferred option is Option 3. A new build on the Craighill Terrace site, see Figure 17. 1:200 Plans for the preferred Option 3 are included in Appendix 3c.


21 January 2013

3.9.2 The OBC briefed GIFA was 1,500m2 During design development to Stage 1 Submission the GIFA has increased to 1,661m2. Table 25 seeks to reconcile the original brief with the current costed Stage 1 design.

Table 25




General Medical Services 943 976 Community Health Partnership 325 336 Dental Practice 337 349 Gross Internal Floor Area 1500 1605 1661

3.9.2.1 Whilst the two GP practices will remain as

independent business entities, they will operate collaboratively in the flexible use of consulting, meeting and other appropriate space. This will be necessary to ensure the continuing theme of more integrated working with other professional colleagues and partners (e.g. students, visiting consultants / specialists, partner agencies etc.) In addition, other accommodation will be shared, as a matter of course (e.g. waiting areas, toilets, meeting/teaching rooms, waste disposal areas, DSR’s, multipurpose rooms, etc.

3.9.3 The reasons for variance between briefed area and actual area

is predominantly due to the inclusion of a boilerhouse and the addition of a water services plant room since the original brief was developed.


3.9.4.1 The preferred site is located off Craighill Terrace close to its junction with the A9. It is adjacent to Craighill Primary School and the proposed new care home. The site is in the ownership of Highland Council, the Valuation Office agreed the site value with Highland Council.


3.9.5.1 Draft missives for the purchase of the site are being considered by Highland Council, the anticipated date of conclusion is 15 February 2013.


3.9.6.1 Full planning consent for the Tain Health Centre development was granted by Highland Council in June 2012. A Planning Gain Condition regarding payment of a contribution towards improved public transport services has been purified.


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Figure 17 Aerial View of Tain

3.10 Sustainability and Design Quality Objectives for the FWT Bundle

3.10.1 Architect Design Scotland

3.10.1.1 As part of the embedding of the design process in the

various business case stages, the Scottish Government has, in addition to BREEAM assessments, advocated a formalised design process facilitated by Architecture and Design Scotland (A+DS) and Health Facilities Scotland (HFS). NHS Grampian and NHS Highland have consulted with A+DS in the development of the design of the three Health Centres. The drawings for Tain were reviewed with the involvement of A+DS and comments reflected where possible in the revised design. In relation to Forres and Woodside A+DS made a small number of observations but chose not to comprehensively review the design as they were too advanced to facilitate any material amendment.

3.10.2 Health Associated Infection

3.10.2.1 A key element in the design process has been

consideration of safety in healthcare buildings and the minimisation of risk in relation to health associated infection. All healthcare projects are required to use the Healthcare Associated Infection System for Controlling Risk in the Built Environment - HAI Scribe.

3.10.2.2 The risk assessment method is effective in identifying

actual and potential infection control hazards in four development stages:


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• Proposed site for development • Design and planning of the healthcare facility • Construction of new facilities and

refurbishment/extensions to existing healthcare facilities

• Ongoing maintenance and repair of healthcare facilities

3.10.2.3 The rationale for using HAI SCRIBE is to maintain a

safe healthcare environment and to minimise the risk of HAI through assessment and planning, prior to and during, new build and renovation projects. Through the implementation of guidance, HAI SCRIBE engages the collaboration and expertise from a wide range of healthcare experts, ensuring that key personnel are involved in reducing risk.

3.10.2.4 There are four development stages. At each stage

the assessment reviews different dimensions which, where appropriate, include:

• Identification of hazards (this may be an actual

or potential hazard) • Assessment of any risks • Management of risks identified (either eliminate

the risk or reduce the risk to minimise its impact)

Stage 1 - The proposed site and location of the new

facility Stage 2 - The design and planning of the building Stage 3 - The construction of the facility Stage 4 - The ongoing maintenance of the

operational facility 3.10.2.5 Two HAI SCRIBE assessments have now taken

place, Stages 1-2 for each project. These assessments took place between 2010 and 2012 and are documented and signed off by appropriate parties. All issues identified have influenced the evolving plans for the facility and delivery of the project. HAI Scribe Stage 3 will be completed prior to hubCo Stage 2 submission in March 2013 and HAI Scribe Stage 4 will be completed once the facility is in operation.

3.10.3 Clinical Brief and Authority Requirements

3.10.3.1 In the context of the FWT Bundle, specification

documents have been prepared in collaboration with service users, the CHPs, NHSG and NHSH Estates, hubCo and their design teams and include:

• Authority Construction Requirements


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• Clinical Output Specification • Soft Facilities Management Specification • Schedule of Accommodation • Room Data Sheets • Equipment List • Equipment Responsibility Matrix

3.10.4 Design Development and Design Quality

3.10.4.1 Achieving Excellence Design Evaluation Toolkit

(AEDET Evolution) Healthcare building design frequently involves complex concepts which are difficult to measure and evaluate. The AEDET Toolkit will be used to help NHSG and NHSH manage the design from initial proposals through to detailed design and will continue to do so through to post project evaluation.

3.10.4.2 To date two AEDET reviews of the preferred option

have been completed for each project, a summary of the most recent undertaken in May 2012, is outlined in Figure’s 18, 19 and 20.

3.10.4.3 Each project team has taken a different approach

with their design teams to the coring to date and this has had an impact on the current scores. At Woodside the team has sough to answer most questions as best they can at this stage and this results in a score well within the target range of 4-6 for each category. At Tain and Forres a different approach has been taken and a number of questions have not been answered at this stage resulting in a lower (incomplete) score. This will be addressed when the next two AEDETs are undertaken at Stage 2 and post occupation.

Figure 18

Forres Health and Care Centre


21 January 2013

Figure 19 Woodside Fountain Health Centre

Figure

FiFigure 20

Tain Health Centre

AEDET Score of current preferred option at Stage 1 ► Character and innovation ○ 2.9


► Staff and patient environment ○ 3.5


► Performance 0.0

► Engineering 0.0

► Construction ○ 0.9

► Use ● 4.6

► Access ○ 4.0

► Space ● 4.3

3.10.5 Sustainability

3.10.5.1 BREEAM (Building Research Establishment’s Environmental Assessment Method for Healthcare) sets the standard for best practice in sustainable building design, construction and operation and has become one of the most comprehensive and widely recognised measures of a building's environmental performance.

AEDET Score of Current Preferred Option at Stage 1 ► Character and innovation ● 5.7


► Staff and patient environment ● 5.3


► Performance

► Engineering ○ 5.0

► Construction

► Use ● 5.9

► Access ○ 5.5

► Space ○ 5.4


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3.10.5.2 A BREEAM assessment uses recognised measures of performance, which are set against established benchmarks, to evaluate a building’s specification, design, construction and use. The measures used represent a broad range of categories and criteria from energy to ecology. They include aspects related to energy and water use, the internal environment (health and well-being), pollution, transport, materials, waste, ecology and management processes.

3.10.5.3 Consistent with NHSScotland, NHSG and NHSH

have an aspiration that, where possible, all new buildings achieve a BREEAM Excellent rating. In that regard an independent BREEAM assessor has been appointed to work with the design teams and wider project team with the aims of achieving BREEAM Excellence for all three projects.

3.10.5.4 The BREEAM assessor has recently completed a

comprehensive assessment of all three projects and has confirmed that BREEAM Excellent will not be achievable for any of the projects. The assessor has indicated that BREEAM Very Good should be achievable for all three projects.

3.10.5.5 The BREEAM assessor had provided information

summarising why BREEAM Excellent will not be achievable. No single factor has led to an inability to attain Excellent. In essence it is the accumulative effect of several factors which has led to the current indicative scores which each lie within the ‘Very Good’ banding. The reasons include for example:

• Budgetary targets • Elongated design period and change in

procurement method, mid design (Framework to hubCo)

• Size and location of sites • Public transport access to sites

3.10.6 Equipment Procurement

3.10.6.1 An ‘Equipment Responsibility Matrix’ has been

prepared. This lists all equipment and specifies responsibility between Sub-hubCo and NHSG and NHSH in terms of supply, installation, maintenance and replacement over the course of the operational period.

3.10.6.2 Group 1 items of equipment (predominantly large,

permanently installed plant or equipment) will be supplied, installed, maintained and replaced by Sub-hubCo throughout the 25 year contract term. The


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cost of Group 1 equipment is included within the total CAPEX cost in the calculation of the unitary charge.

3.10.6.3 Group 2 items of equipment (specialist items having

space, construction or engineering implications) will be supplied by NHSG and NHSH, installed by Sub-hubCo and maintained by NHSG and NHSH. Group 3/4 items are supplied, installed, maintained and replaced by NHSG and NHSH. Some equipment will transfer from existing departments.

The equipment costs (inclusive of VAT), allowing for an element of existing equipment to transfer, for Forres, Woodside and Tain are £0.298m, £0.175m and £0.319m respectively. The NHS Grampian Capital Plan indicates that funding for the equipment at Forres and Woodside is from a specific SGHD capital allocation, which will be made available in 2013/14. The Tain equipment will be funded from the Net Book Value benefit of the current Tain Health Centre site, which will be realised upon its sale. There is likely to be a delay between purchase of equipment and sale of the property. NHS Highland will therefore fund the purchase of the equipment from its SGHD Formula Capital funding in the interim period.

3.10.7 Workforce

3.10.7.1 The following key workforce principles have been adopted in relation to the three projects which will:

• Provide a better working environment with

modern facilities and co-location that provides improved opportunities for joint working and improved patient care

• Increase opportunities to deliver care in innovative and creative ways

• Improve learning opportunities for health and care staff

• Integrate working leading to more efficient and effective working practices and new roles

• Offer new career opportunities e.g. Practitioners with Special Interest (PwSI)

• Enhance opportunities for multi-disciplinary and multi-agency team working and learning


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4 THE COMMERCIAL CASE 4.1 Introduction

4.1.1 The Scottish Capital Investment Manual (SCIM) guidance proposes that the default position for delivering a new build community developments for the Forres Health and Care Centre, Woodside Fountain Health Centre and Tain Health Centre (FWT) each having an equivalent capital value in excess of £750,000 should be via the Scottish Futures Trust hub initiative.

4.1.2 The hub initiative in the North Territory is provided through a joint

venture company (hub North Scotland Limited) bringing together local public sector participants, Scottish Futures Trust (SFT) and a Private Sector Development Partner (PSDP).

4.1.3 The North Territory hubCo PSDP is a consortium between Miller

Corporate Holdings and Sweett Group (formerly Cyril Sweett Investments Limited).

4.1.4 This section outlines the commercial transaction that

management and the Boards will be asked to sign up to and serves to communicate the following:

• The structure of the project development and scope of

contracted services • The agreed risk allocation • The type of contract used and some key contractual terms • The underpinning methods of payment for the services and

outputs including any premiums for risk transfer and • The implementation timescales which have been agreed

for the delivery

4.2 Scope and Services

4.2.1 The hub initiative was established to provide a strategic long-term programmed approach to the procurement of community based developments. As a means towards driving maximum value for money the Forres Health and Care Centre, Woodside Fountain Health Centre and Tain Health Centre projects have been to form a community bundle of projects (Woodside, Forres and Tain - FWT). This will be achieved under a single Project Agreement.

4.2.2 The FWT community bundle of projects will be delivered by a

‘Sub-hubCo’ (a non recourse vehicle funded from a combination of senior and subordinate debt underpinned by a 25 year service concession contract). The senior debt is provided by a project funder that will be appointed following a funding competition and the subordinate debt by a combination of Private Sector (60%), Scottish Futures Trust (10%) and Participant investment (30%). The participant investment will include an agreed pro-rata contribution from both participating Boards (NHS Grampian and NHS Highland).


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4.2.3 The projects will be taken forward by way of a single Project Agreement which will result in the “Boards” having joint authority over the contract throughout the project term. The main part of the contractual change will be where termination is evoked, this would be for all three projects. Whilst this is recognised, it will be managed through a further agreement termed an “Interface Agreement” between the Boards that will deal with the impact of decisions and how those decisions will be managed by the respective “Boards” e.g. if the contract is terminated by a Board the other would have the right of full compensation from the terminating Board of which the Scottish Government Health and Social Care Directorate are funding circa 85% of the recurring costs.

4.2.4 In essence the Sub-hubCo will be responsible for providing all

aspects of design, construction, ongoing facilities management (hard maintenance services and lifecycle replacement of components) and finance throughout the course of the project term other than a small number of exceptions as discussed in 4.4.11.

4.2.5 Soft facilities management services (such as domestic, catering,

portering and external grounds maintenance) are excluded from the Project Agreement with Sub-hubCo and these services will be provided by NHSG and NHSH.

. 4.2.6 Group 1 items of equipment, which are generally large items of

permanently installed plant or equipment, will be supplied, installed, maintained and replaced by Sub-hubCo throughout the project term.

4.2.7 Group 2 items of equipment, which are items of equipment

having implications in respect of space, construction and engineering services, will be supplied by NHSG and NHSH, installed by Sub-hubCo, and maintained by NHSG and NHSH.

4.2.8 Group 3-4 items of equipment are supplied, installed, maintained

and replaced by NHSG and NHSH. 4.2.9 The responsibility and interface of equipment and soft FM in the

operational facility is a key consideration of the service provision. To facilitate this, an ‘Equipment Responsibility Matrix’ has been prepared, detailing all equipment by description, group reference, location and responsibility between NHSG, NHSH and Sub-hubCo in terms of supply, installation, maintenance and replacement over the course of the operational period. To facilitate joint working arrangements between NHSG, NHSH and the hard FM services provider an ’Interface Responsibility Matrix’ will articulate responsibility at a practical operational level and supplements the Project Agreement.


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4.3 Risk Allocation

4.3.1 A key feature of the hub initiative is the transfer of inherent

construction and operational risk to the private sector that traditionally would be carried by the public sector. Table 26 below outlines ownership of known key risks.

Table 26

Risk Category Potential Allocation Public Private Shared

1. Design risk √ 2. Construction and development

risk √

3. Transitional and implementation risk

√

Risk Category Potential Allocation

Public Private Shared

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. Sustainability risks √

4.3.2 Design risk sits with Sub-hubCo subject to the Project

Agreement. For example, agreed derogations identified within the Authority’s Construction Requirements and on-going Authority’s Maintenance Obligations during operation may give Sub-hubCo relief on certain designed components.

4.3.3 Construction and development risk sits with Sub-hubCo subject

to the Project Agreement. For example, a small number of delay and compensation events could entitle Sub-hubCo to compensation if the events materialised and this would be reflected in a revised Unitary Charge calculation.

4.3.4 Transition and implementation risk sits with Sub-hubCo subject

to compliance with the Authority’s Requirements and agreed commissioning timetable.

4.3.5 Availability and performance risk sits with Sub-hubCo subject to

the Project Agreement. For example, availability or performance failures that arise as a result of an excusing clause could give Sub-hubCo relief from payment deduction.


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4.3.6 Operating risk is a shared risk subject to NHSG, NHSH and Sub-hubCo’s responsibility under the Project Agreement and joint working arrangements within operational functionality.

4.3.7 Variability of revenue risk is a shared risk subject to adjustments

of the Annual Service Payment under the Project Agreement. In addition NHSG and NHSH are responsible for a number of pass through utility costs such as energy usage and direct costs such as local authority business rates, all of which are subject to different factors such as indexation.

4.3.8 Termination risk is a shared risk within the Project Agreement

with both parties being subject to events of default that can trigger termination. In addition NHSG and NHSH have an additional right of voluntary termination subject to the Project Agreement.

4.3.9 Technology and obsolescence risk predominantly sits with Sub-

hubCo however NHSG and NHSH could be exposed through specification and derogation within the Authority’s Construction Requirements, obsolescence through service change during the period of functional operation and relevant or discriminatory changes in law under the Project Agreement.

4.3.10 Control risks sit with NHSG and NHSH subject to the Project

Agreement. 4.3.11 Residual value risks sits with NHSG and NHSH. 4.3.12 Financing risks predominantly sit with Sub-hubCo subject to the

Project Agreement however relevant changes in law, compensation events that compensate Sub-hubCo and changes under the Project Agreement all may give rise to obligation on NHSG and NHSH to provide additional funding. Authority Voluntary Termination may also bring an element of reverse risk transfer due to aspects of the funding arrangement with the funder.

4.3.13 Legislative risks are shared subject to the Project Agreement.

Whilst Sub-hubCo is responsible to comply with all laws and consents, the occurrence of relevant changes in law as defined in the Project Agreement can give rise to compensate Sub-hubCo.

4.3.14 Sustainability risks are proportionately shared subject to the

Project Agreement. Sub-hubCo carry the risk of complying with the Authority’s Requirements in terms of sustainable design and lifecycle of hard FM components, however NHSG and NHSH exposure to aspects of Authority Maintenance Obligations and carry some of the risk of thermal efficiency of the facility.


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4.4 Key Contractual Arrangements

4.4.1 The agreement for the FWT Project will be SFT's hub standard form Design, Build, Finance, Maintain (DBFM) contract (the “Project Agreement”). The Project Agreement is signed at Financial Close. Any derogation to the standard form position must be agreed with SFT.

4.4.2 Sub-hubCo will delegate the design and construction delivery

obligations of the Project Agreement to its Tier 1 building contractor under a building contract. A collateral warranty will be provided in terms of other sub-contractors having a design liability. Sub-hubCo will also enter into a separate agreement with a FM service provider to provide hard FM service provision.

4.4.3 Following NHSG, NHSH and Sub-hubCo entering into the Project

Agreement, NHSG and NHSH will also enter into an Occupation Agreement with the five Medical Practices relevant to their occupation of space within the facility. Statements of ‘Agreement in Principle’ have been signed by all five GMS Medical Practices. A copy of the statements are included as Appendix 4a.

4.4.4 The NHSG and NHSH Asset Management Groups (AMGs) have

approved that both Board areas provide their share of Participants Sub-ordinate Debt Equity to support the development. This investment will be provided for at Financial Close in a ratio of two thirds from NHSG and one third from NHSH.

4.4.5 NHSG and NHSH procure the grant of a license from the

Scottish Ministers to Sub-hubCo in line with the standard contract position.

4.4.6 The term will be 25 years. 4.4.7 ‘Termination of Contract’ - as the NHS will own the sites they will

remain in the ownership of the NHS throughout the project term but be contracted to Sub-hubCo to allow them to construct and operate the building for the duration of this contract. On expiry of the contract the building(s) revert to NHSG and NHSH on behalf of The Scottish Ministers.

4.4.8 Site Acquisition

4.4.8.1 Woodside Fountain Health Centre - The Woodside Fountain Health Centre at Marquis Road, Aberdeen extends to 3,824.3 square metres of ground and is currently in the ownership of Aberdeen City Council (ACC). The site includes an area set aside for a five-a-side football pitch. Agreement to purchase the site, including the purchase price of £……, was agreed in 2008/09. As part of the purchase agreement, responsibility for re-providing the football area rests with ACC. The Valuation Office Agency acted as Property Advisor/Professional Valuer for the Scottish


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Ministers per NHSG. The offer to purchase was agreed with Aberdeen City Council in November 2012 subject only to satisfactory planning consent being granted and Aberdeen City Council using best endeavours to relocate the football pitch by 30 March 2013. The planning consent will not be conditional upon relocation of the football pitch.

4.4.8.2 Forres Health and Care Centre – In March 2010 NHS

Grampian secured the site for the Health Centre by way of a excambion with Moray Council at a value of £…… in their favour for an adjacent former farm site in the ownership of NHS Grampian with the roadside site of a former play park, Grantown Road, Forres. The site extends to 13,736 square metres. The play park includes a football pitch which would be relocated to the site now owned by the Moray Council. Full planning consent for the development was granted in March 2012, the relocation of the football pitch is a condition of the consent and a section 75 requires a financial contribution of £12k to public transport.

4.4.8.3 Tain Health Centre – The site sits near the junction of

Craighill Terrace and A9 at Tain and extends to some 1.1354 hectares. To release the site for sale Highland Council has provided a new sports pitch nearby and constructed an access road off Craighill Terrace. The Council have also installed a foul sewer and fresh water main and provided ducts for telecom and power supplies. A private developer is to build a new care home adjacent to the health centre site in approximately the same time frame and the access road for the two properties will be shared. The construction costs of the shared access road and ongoing maintenance will be shared between the care home and the health centre. A Deed of Servitude has been offered to the care home for this. The draft offer to purchase and the disposition are with Highland Council solicitors for comment. It is expected that the transaction will complete by 15 February 2013. The development has received Full Planning Permission and the Planning Gain contribution to improve public transport has been paid.

4.4.9 Service level specifications will detail the standard of output

services required and the associated performance indicators. Sub-hubCo will provide the services in accordance with its method statements and quality plans which indicate the manner in which the services will be provided.

4.4.10 NHSG and NHSH will not be responsible for the costs to Sub-

hubCo of any additional maintenance and/or corrective measures if the design and/or construction of the facilities and/or the


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components within the facilities do not meet the Authority’s Construction Requirements. Where appropriate, deductions will be made from the Monthly Service Payment in accordance with the Payment Mechanism.

4.4.11 NHSG’s and NHSH’s (The Authority’s) Maintenance Obligations

comprise of repairs and making good of all interior walls and ceiling finishes and, where appropriate, repairs and/or replacement of carpets and other non-permanent floor coverings in accordance with the frequency cycles stated in the Project Agreement. In addition NHSG and NHSH are also responsible for inspection and testing of electrical appliances. Failure by NHSG and NHSH to carry out the Authority’s Maintenance Obligations would result in a breach of the agreement and entitle Sub-hubCo to carry out the works and be reimbursed.

4.4.12 Not less than 2 years prior to the expiry date of the 25 year term

an inspection will be carried out to identify the works required to bring the facilities into line with the hand-back requirements which are set out in the Project Agreement.

4.4.13 Sub-hubCo will be entitled to an extension of time on the

occurrence of a Delay Event and to an extension of time and compensation on the occurrence of Compensation Events (in either case, during the carrying out of the construction works). Sub-hubCo is relieved of the Board’s right to terminate the Project Agreement for non-performance on the occurrence of Relief Events. This reflects the standard contract position.

4.4.14 NHSG and NHSH have set out its construction requirements in a

series of documents. Sub-hubCo is contractually obliged to design and construct the facilities in accordance with the Authority’s Construction Requirements.

4.4.15 NHSG and NHSH have a monitoring role during the construction

period. 4.4.16 NHSG, NHSH and hubCo will jointly appoint an independent

tester who will also perform an agreed scope of work that includes such tasks as undertaking regular inspections during the works, certifying completion, attending site progress meetings and reporting on completion status, identifying non compliant work, reviewing snagging progress as well as a range of other independent functions.

4.4.17 NHSG and NHSH are working closely with Sub-hubCo to ensure

that the detailed design is completed prior to financial close. Any areas that do remain outstanding will, where relevant, be dealt with under the Reviewable Design Data and procedures as set out within the Review Procedure.

4.4.18 The Project Agreement details the respective responsibilities

towards malicious damage or vandalism to the facilities during the operational term. NHSG and NHSH have an option to carry out a repair itself or instruct Sub-hubCo to carry out rectification.


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4.4.19 Compensation on termination and refinancing provisions

generally follow the standard contract position. 4.5 Method of Payment

4.5.1 NHSG and NHSH will pay for the services in the form of an Annual Service Payment.

4.5.2 A standard contract form of Payment Mechanism will be adopted

within the Project Agreement with specific amendments to reflect the relative size of the project, availability standards, core times, gross service units (number of service units applied to each functional area) and a range of services specified in the Service Requirements.

4.5.3 NHSG and NHSH will pay the Annual Service Payment to Sub-

hubCo on a monthly basis in arrears for only the buildings they are contracted with, calculated subject to adjustments for previous over/under payments, deductions for availability failures and performance failures and other amounts due to Sub-hubCo. Where any payment is in dispute the party disputing the payment shall pay any sums which are not in dispute.

4.5.4 NHSG and NHSH have a contractual right to set-off any sum due

to it under the Project Agreement. 4.5.5 The Annual Service Payment is subject to indexation as set out

in the Project Agreement by reference to the Retail Prices Index published by the Government’s National Statistics Office. Indexation will be applied to the Annual Service Payment on an annual basis. The base date will be the date on which the project achieves Financial Close.

4.5.6 Costs such as utilities usage charges (heating, water and

electrical power) and operational insurance premiums are to be treated as pass through costs and, as such, are arranged by Sub-hubCo but added to the Monthly Service Payment as applicable. In addition, NHSG and NHSH are directly responsible for arranging and paying all connection, line rental, telephone usage and broadband charges. Local Authority rates are will be paid directly by NHSG and NHSH.

4.5.7 Sub-hubCo is obliged to monitor its own performance and

maintain records documenting its service provision both in terms of the Project Agreement and the Territory Partnering Agreement. NHSG and NHSH will carry out performance monitoring on its own account and will review Sub-hubCo’s performance monitoring procedures in terms of the Project Agreement.


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4.6 Personnel Arrangements

4.6.1 The management of soft facilities services, such as domestic and

portering services, will continue to be provided by NHSG and NHSH.

4.6.2 No staff will transfer and therefore the alternative standard

contract provisions in relation to employee transfer (TUPE) will not come into effect.

4.7 Implementation Timescales

4.7.1 The Forres Health and Care Centre Outline Business Case Addendum was approved by CIG at its meeting on 20 November 2012.

4.7.2 The Woodside Fountain Health Centre Project Outline Business

Case was approved by the CIG at its meeting on 20 November 2012.

4.7.3 The Tain Health Centre Outline Business Case Addendum was

approved by the CIG at its meeting on 20 November 2012. 4.7.4 The expectation of the CIG being that the three projects would

be presented in a single Full Business Case to be known as the FWT Bundle Project.

4.7.4 The programme for delivery of the FWT Bundle is as follows:

Table 27

Activity Timescale OBC Approval - NHSG Board 6 November 2012 OBC Approval – CIG SGHD 20 November 2012 FBC Formal Consideration by NHS Boards

6 February 2013

FBC Formal Consideration by CIG SGHD

26 February 2013

Stage 2 Submission 4 March 2013 SFT Stage 2 KSR Approval 11 March 2013 Stage 2 Acceptance 13 March 2013 Financial Close w/c 18 March 2013 Start on Site 15 April 2013 FBC Addendum to NHSG Board May 2013 FBC Addendum to SGHD May 2013 Completion/Handover 11 April 2014 Asset 24 FM Service Commencement 11 April 2014 Bring into Operation (Clinical Services)

28 April 2014 (circa)

Asset 24 FM Service Completion 11 April 2040


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5. THE FINANCIAL CASE 5.1 Introduction

5.1.1 The Financial Case sets out:

• Preferred Lender/Financial Modelling at OBC • Preferred Lender/Financial Modelling at FBC • Professional Advisor statements, incorporating Value for

Money • Key Stage Review status • The revenue and capital implications of the projects • Comparison of the OBC and FBC costs • A statement on overall affordability • Risks • The agreed accounting treatment

5.1.2 The Forres Community Health and Care Centre, Woodside

Fountain Health Centre and Tain Health Centre are a Bundle of three projects being taken forward as a hubCo DBFM Service Concession Contract within NHS Scotland, utilising revenue funding.

5.1.3 The OBC for Woodside and the OBC addendums for Forres and

Tain were submitted to the two NHS Boards and the Scottish Capital Investment Group (CIG) in November 2012. Approval to proceed to FBC stage was granted at the formal meetings of these groups. The addendums to the original OBC documents for Forres and Tain were requested by CIG, due to the length of time that has lapsed since the approval of the original OBCs’ and the change in the intended funding route.

5.1.4 At OBC stage, separate documents for each project within the

Bundle were submitted for approval. However, at FBC stage, these have been consolidated into one document. This is due to the nature of the contract being entered into with hubCo. The financial case sets out the items in 5.1.1 for the preferred options of all three projects.

5.2 Preferred Lender and hubCo Financial Modelling at OBC/Stage 1

5.2.1 As stated in section 5.1.2, the preferred options for the Forres, Woodside and Tain projects are being taken forward as a single hubCo DBFM Service Concession Contract within NHS Scotland, utilising revenue funding.

5.2.2 Hub North Scotland Ltd submitted financial model v0850 as part

of their overall Stage 1 submission for including within the Woodside OBC and Forres/Tain OBC addendums. This model uses the costs of the three preferred options to provide an indicative annual Unitary Charge cost, in advance of financial close.

5.2.3 The financial model proposed utilising funding for the projects

from the Co-op Bank. This resulted in a total annual Unitary


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Charge for the three projects at the base year 2013/14 of £…… and £…… in 2014/15, as the first year of operation. The estimated breakdown of the cost between the projects in the first year of operation is:

• Forres £…… • Woodside £…… • Tain £……

5.2.4 Indicative lending rates from Aviva, the lender for the NHS

Grampian “Health Village” project were better than those offered from the Co-op. However, due to uncertainty surrounding the ability of Aviva to provide funding at the intended financial close (their lending for these types of projects is currently capped by the FSA), it was deemed prudent to use the Co-op lending rates for Stage 1/OBC.

5.3 Preferred Lender and hubCo Financial Modelling at FBC

5.3.1 As per section 5.2.3, the OBC and OBC addendums were written on the basis of proceeding with the Co-op bank as the preferred lender, due to uncertainty over the ability of Aviva to provide the necessary funds.

5.3.2 Since the submission of those documents, the Co-op bank has

withdrawn from the market for long term financing of projects of this type. It is therefore the preference of the FWT Bundle Project Board to proceed with Aviva as the preferred lender. Details of the reasons for this and progress made to date are highlighted in sections 5.3.3 to 5.3.8 below.

5.3.3 During the two month period following the submission of the

OBC for approval, discussions commenced with Aviva to ascertain whether the FSA lending cap that has been imposed on them for the “Composite Trade Model” will be lifted as we approach financial close. Were this to be the case, this would allow Aviva to provide the funding for the FWT Bundle project on the same basis as applied to the “Health Village” project. Aviva have confirmed that the lending cap is still in place at the time of writing of the FBC and that the issue is still under discussion with the FSA.

5.3.4 As part of the discussions with Aviva, an alternate lending type –

the “Capital Tax Variant Model” has emerged as a potential solution for proceeding with them as preferred lender, should the FSA lending cap remain in place as we approach Financial Close. This type of model was common in public sector revenue funded projects until around 2003 and is not subject to an FSA cap. It has been confirmed by Pricewaterhouse Coopers (PwC) that this funding route would have no impact on the accounting treatment of the contract under IFRIC 12 (International Financial Reporting Interpretation Committee) and by the Scottish Futures Trust that it would have no impact on the accounting treatment under ESA 95 (European System of Accounts). It therefore


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offers the projects a realistic and achievable alternative funding source, given the programmed Financial Close in March 2013.

5.3.5 The Capital Tax Variant Model from Aviva is less tax efficient

than the preferred method of lending (as provided by Aviva for the Village project) and hubCo has indicated that the annual Unitary Charge resulting from this method will be higher as a result. Not withstanding this, hubCo have also indicated that the Unitary Charge under this form of lending would still be significantly lower than the Co-op deal which was outlined in the OBC.

5.3.6 However, due to the shortened programme to submit the FBC

and complete Financial Close prior to 31 March 2013, the construction costs for the FWT Bundle Project are still under review at this time and will not be confirmed until 4 March, as part of the Stage 2 submission by hubCo. As a result of this, the financial model for the Capital Tax Variant Model (using Aviva) has also not yet been finalised. Work will continue to finalise the model in advance of financial close, on the assumption that the FSA lending cap for the original lending method remains in place.

5.3.7 The FWT Project Board, in consultation with SFT, has therefore

taken the decision to continue to use the Co-op lending terms for the FBC, as indicated by financial model v0850. It is considered to be too high a risk to use the interim financial model for the alternative funding method from Aviva (which indicates a reduced annual cost compared to the OBC Co-op deal) for the FBC, due to the possibility of final costs at Financial Close exceeding those within this interim model. Such a scenario would prevent the signing of the contract, since the costs would exceed the approved limit.

5.3.8 The OBC Co-op lending terms, although no longer available,

therefore become a cap, or “not to be exceeded cost” via the approved FBC. Hence, the deal ultimately agreed with Aviva (original or alternate lending method) at Financial Close must not exceed the original Co-op terms approved at OBC. The cap is therefore as laid out in section 5.2.3, which is a base Unitary Charge of £……, resulting in a first year of service charge in 2014/15 of £…….

5.3.9 An update paper will be forwarded to the Capital Investment

Group in advance of their meeting on 26 February 2013, where this FBC will be considered. This paper will outline further progress made on the financial deal with Aviva and also provide an update on the Capital, Lifecycle and Facilities Maintenance costs which are being prepared in partnership with hubCo For the Stage 2 submission.

5.4 Technical Advisor’s Statement

5.4.1 The technical advisors Mott MacDonald reviewed the Stage 1 pricing report that was included in the OBC. As the Stage 2


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pricing report will not be submitted by hubCo until 4 March 2013, there has been no further cost information for Mott MacDonald to review for the FBC. The costs referred to in the OBC are therefore carried forward to the FBC.

5.4.2 The view of Mott MacDonald on the Stage 1 pricing report is that

“hubCo has provided evidence that each of the projects, to varying degrees, provide Value for Money relative to the agreed benchmark projects (Prime Costs) and also to the Pricing Data (Non Prime Costs).”

5.4.2.1 When compared to sector benchmarks, the hubco

Stage 1 figures for the average construction cost of the building component of the capital cost aligned well with comparable projects, as do the preliminaries costs. The cost of the external works is however in excess of the projects against which the developments were compared. This variance being directly attributable to the significant area of the sites being developed and also the nature and extent of the offsite works which are being undertaken as part of the projects.

5.4.2.2 The external works on each of the projects are

specific to the sites which are being developed. Accordingly when benchmarking against similar projects to ascertain Value for Money, the focus tends to be upon the cost of providing the building, the external works being reviewed on a per project basis. In the instance of these projects, the Local Authority Planners have identified specific requirements to up grade adjacent road junctions, provide a perimeter access road for emergency vehicle access and on Forres a sports pitch is to be provided. These development premiums have increased the cost of external works relative to a typical project.

5.4.3 The Capital cost of the FWT Bundle and the annual FM and

Lifecycle costs are all within the caps set at the New Project Request Review stage at the time of the Mott MacDonald report.

5.4.4 Moving forward with design development, the expectations of

hubCo and the participants is that further value will be applied to the financial deal to reflect competitive market testing.

5.4.5 Mott MacDonald will be commissioned to produce a further

report, following hubCo’s Stage 2 submission on 4 March 2013. The Boards’ continue to work closely with both Mott MacDonald and hubCo to ensure that the costs that are built into the contract represent value for money and the report from Mott MacDonald on the Stage 2 pricing date will include references to the extent that this has been achieved.


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5.5 Financial Advisor’s Statement

5.5.1 PricewaterhouseCoopers (PwC) are appointed by the NHS Boards’ as financial advisors to them for the FWT Bundle project. PwC analysed the Stage 1 pricing report and associated financial model (v0850) as part of their due diligence towards their validation of the cost representing value for money. They provided a report on this, which was referred to at OBC stage. They reported that there were no areas of significant concern and that the quoted Unitary Charge is reflective of a value for money position at this stage. As the FBC continues to use model v0850, and given that there have been no further formal model submissions from hubCo in advance of its submission, PwC have not been commissioned to prepare a further full report at this time. PwC will be commissioned to produce a further report, following hubCo’s Stage 2 submission on 4 March 2013, since this will include an updated financial model.

5.5.2 hubCo have however, in the interim, submitted a Funding Market

Update Report, dated 4 December 2012. This highlights the withdrawal of the Co-op from the market and provides indicative figures for the alternative Aviva funding method (Capital Tax Variant model). PwC have confirmed that this report reflects what they are seeing in the market in terms of available funding terms.

5.5.3 PwC have also confirmed that the alternative lending deal from

Aviva does not affect the accounting treatment of the contract under IFRIC 12.

5.5.4 The Boards will continue to ensure that Value for Money is

achieved in relation to the lending deal by seeking the advice of their financial advisors on what is being presented by hubCo as being available in the marketplace. It is anticipated that several iterations of the financial model will be presented in the approach to financial close and a close working relationship has been developed with PwC in order to respond to this and provide due diligence. In addition Scottish Futures Trust will undertake a Stage 2 ‘Key Stage Review’ in March 2013 prior to the acceptance of the Stage 2 submission by the NHS and Financial Close.

5.6 Key Stage Review 5.6.1 As part of the governance process for hubCo DBFM projects

there is a requirement to participate in three KSRs at new project request (NSR) Stage 1 and Stage 2. These are undertaken by Scottish Future Trust on behalf of SGHD to provide external review of projects at each key stage to review progress to the next stage of the project.

5.6.2 The NPR and Stage 1 KSR approvals for the FWT Project are in

place. The Stage 2 KSR has commenced and will be completed


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on 11 March 2013 after receipt of the Stage 2 submission from hubCo on 4 March 2013.

5.6.3 The Stage 2 KSR will require to be approved before Financial

Close. 5.7 Revenue Costs and Associated Funding for the Project

5.7.1 In addition to the revenue funding required for the three projects, capital investment will be required for Land Purchase, Equipment and the Sub Debt investment. NHS Highland will also be utilising Capital Enabling Funding for the cost of its OBC preparation and the professional advisor fees/project team support costs. Details of the capital and revenue elements of the project and sources of funding are provided in the following sections.

5.7.2 Recurring Revenue Costs

5.7.2.1 The recurring revenue costs associated with the projects are summarised in Tables 28, 29 and 30 below. The revenue cost estimates assume that services are in place and available for use in 2014, with 2014/15 being the first full year of operation.

Table 28

Forres

Forres Section FBC £m Costs Unitary Charge 5.7.2.2 & 5.7.2.3 …… Additional Depreciation (Equipment) 5.7.2.4 0.030 Other Scheme Costs (Net Additional) 5.7.2.5 0.021 Total Additional Scheme Costs …… Sources of Funding SGHD Unitary Charge …… GDS Non Cash Limited …… Third Parties (Practices, Social Work) …… Total Sources of Funding …… Board Funded Additional Revenue Costs ……


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Table 29 Woodside

Woodside Section FBC £m Costs Unitary Charge 5.7.2.2 & 5.7.2.3 …… Additional Depreciation (Equipment) 5.7.2.4 0.018 Dental Salaries 5.7.2.6 0.060 Other Scheme Costs (Net Additional) 5.7.2.5 0.027 Total Additional Scheme Costs …… Sources of Funding SGHD Unitary Charge …… GDS Non Cash Limited 5.7.2.6 …… Third Parties (Practices, Social Work) …… Total Sources of Funding …… Board Funded Additional Revenue Costs ……

Table 30

Tain

Tain Section FBC £m Costs Unitary Charge 5.7.2.2 & 5.7.2.3 …… Additional Depreciation (Equipment) 5.7.2.4 0.032 Dental Salaries & Supplies 5.7.2.6 0.030 Other Scheme Costs (Net Additional) 5.7.2.5 0.127 Total Additional Scheme Costs …… Sources of Funding SGHD Unitary Charge …… GDS Non Cash Limited 5.7.2.6 …… GMS/GDS Cash limited …… Third Parties (Practices) …… Total Sources of Funding …… Board Funded Additional Revenue Costs ……

5.7.2.2 Tables 28, 29 and 30 above contain the total Predicted Maximum Unitary Charge of £…… in 2014/15 as the first year of operation, which is allocated to the projects as; Forres £……, Woodside £…… and Tain £……. The Unitary Charge is taken


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from the hub North Scotland Stage 1 Submission dated 4 September 2012 Financial Model v0850. From the Stage 1 model, the collective proportions attributable to the SGHD and the NHS Boards are 90.1% and 9.9% respectively.

5.7.2.3 The Unitary Charge will be subject to variation

annually in line with the actual Retail Price Index (RPI) which is estimated at 2.5% per annum in the Financial Model for the purpose of this business case. The FBC Unitary Charge refers to the Unitary Charge for the first full year of operations (2014/15), which has been indexed (inflated) appropriately.

5.7.2.4 Depreciation relates to the planned capital purchase

of equipment valued at September 2012 price levels. Depreciation is calculated on a straight line basis and assumes an average economic useful life of 10 years. The capital cost of equipment is exclusive of dental equipment at Woodside. A case has been submitted for this to be charged to Dental Non-Cash Limited funding.

5.7.2.5 Other scheme costs represent the net additional

component of building running costs after allowing for the offset of existing funding and third party contributions (e.g. General Practice). For consistency inflation has been applied at 2.5% on the costs. Further details of the other scheme costs for the preferred option are available in Appendix 5a.

5.7.2.6 Regarding the cost of services to be provided in the

three developments, the following assumptions have been made:

a) With the exception of Dental services at

Woodside and Tain (explained in sections c) and d) below), the cost to the NHS Boards of delivering services, i.e. staffing and non pay costs associated with the Board funded services which will be located in the developments, is not expected to increase. The transfer of services will be cost neutral.

b) There will be an Occupancy Agreement

between the Medical Practices and the NHS Boards, reflecting the Practices’ commitment to the development and the associated revenue costs. Statements of ‘Agreement in Principle’ in relation to these agreements have been signed by the practices. These can be found in Appendix 4a. Costs will be reviewed annually and inflation has been applied above to reflect this. The Practice will be fully responsible for their own costs.


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c) The Public Dental Services at Woodside will

transfer from other facilities. To facilitate this and ensure an appropriate level and quality of staffing there is expected to be an increase in staff numbers and cost. The resources required will predominantly be existing in nature. However it is expected that two new posts will be required at a cost of £……. NHS Grampian has submitted a Business Case to the SGHD requesting that the these posts and the additional building running costs of the expanded Dental accommodation of £…… are funded prior to closure of the Dental Non Cash Limited Fund in 2013/14. There is therefore a risk that the Case is not successful and that this cost is therefore required to be borne from within NHS Grampian’s revenue resource limit.

d) The additional revenue costs at Tain for the

relocation of the existing Salaried Dental Team is £61k. These costs relate to the fixed costs associated with FM and the provision of a Local Decontamination Unit facility. The revenue costs associated with the GDP Practice are unknown and will be funded by the GDP is some part through their draw down of non cash limited GDS which will vary dependent on the level of activity.

The SGHD has confirmed that they approve the

relocation of the existing Salaried Service funded through cash limited GDS and the revision from the OBC which now provides the additional chairs through a GDP practice funded through non cash limited GDS.

5.7.3 Recurring Funding Requirement – Unitary Charge

5.7.3.1 As outlined in section 5.3.7, the OBC and FBC use

the same costs for the Unitary Charge. These are taken from the potential lending deal with the Co-op at OBC stage. It is proposed that this is used as a “not to be exceeded cost” for the lending deal at Financial Close. The Unitary Charge in the FBC is therefore derived from financial model v0850, which was submitted by hubCo in their Stage 1 report. Although the Co-op deal is no longer available, it is anticipated that if the Aviva deal can be concluded satisfactorily, then the Unitary Charge will be significantly less than the maximum levels indicated by the Co-op deal (below).

5.7.3.2 An analysis of the total cost of the Unitary Charge at

FBC stage and the associated funding being


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requested from the SGHD is detailed in Table 31 below.

5.7.3.3 The Predicted Maximum Cost Unitary Charge

(PMCUC) in the FBC remains as per the OBC at £…… in year ending 31 March 2015, the first full year of operations. The method of disaggregating the individual project UCs was agreed between representatives of the Boards and hub North Scotland Limited. Costs incurred during the construction phase have been allocated as a percentage of total construction and costs incurred during operations have been allocated according to the GIFA for each project.

5.7.3.4 Using this approach the PMCUC for Forres is £……

(41.3%), for Woodside is £ …… (29.1%) and for Tain is £…… (29.6%). Annual revenue support funding of £……, based on the first full year of operations, indexed year on year for RPI, is requested from SGHD in line with guidance provided by CIG on 21 February 2011. This is attributed to the three projects as: Forres (£……), Woodside (£……) and Tain (£……). The NHS Grampian and NHS Highland elements of the Unitary Charge, together with the annual depreciation charge and annual running costs are reflected in the Boards’ financial plans and LDP. The Boards’ assessment of affordability is set out later, in section 5.11.

Table 31

Forres Woodside Tain Total Unitary Charge Contributions (OBC and FBC) £m £m £m £m Annual Unitary Charge CAPEX …… …… …… …… SPV/Insurance …… …… …… …… Life Cycle Costs …… …… …… …… FM Costs …… …… …… …… Total Unitary Charge Cost …… …… …… …… SGHD Unitary Charge Funding CAPEX 100% …… …… …… …… SPV/Insurance 100% …… …… …… …… Life Cycle Costs 50% …… …… …… …… FM Costs 0% …… …… …… …… Total SGHD Funding for Unitary Charge …… …… …… …… Board/Third Party Funded Unitary Charge …… …… …… ……


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5.7.3.5 The calculation of the respective shares for SGHD and NHSG/NHSH above is based on the component parts of the Unitary Charge and the percentage contributions to each component as advised by SGHD for the front runner projects. The final split of these cost will be determined by the funding deal entered into at Financial Close.

5.7.3.6 There are a number of issues which will/could impact

on the financial deal that is ultimately signed up to and the resultant annual Unitary Charge value:

• The lender and the lending rate will change

prior to FC. The current UC was derived using the OBC approved Co-op model. As indicated in section 5.3.7, this deal is no longer available and the costs above are therefore stated in the FBC as a “not to be exceeded” Unitary Charge. Discussions are on-going with Aviva as the preferred funder.

• The CAPEX of the projects is still under development as part of the Stage 2 process. Any change to this will impact on the funding required and thus the UC.

• Further technical review may result in a change to the lifecycle/facilities management component of the model and reduce the UC.

• Minor amendments may be expected to the hubCo fees in the model, which could have a marginal effect on the UC.

5.7.4 Non-Recurring Revenue Costs

5.7.4.1 A significant level of non-recurring costs, in the form of professional fees associated with the projects, will be incurred by the Boards, which reflects the complexity of the contract being entered into. The estimated costs at FBC have increased from the OBC figures as shown in Tables 32 and 33 below.

Table 32

Forres Woodside Tain Total Advisors Fees at OBC £m £m £m £m Legal …… …… …… …… Technical …… …… …… …… Financial …… …… …… …… Insurance …… …… …… …… …… …… …… ……


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Table 33

Forres Woodside Tain Total Advisors Fees at FBC £m £m £m £m Legal …… …… …… …… Technical …… …… …… …… Financial …… …… …… …… Insurance …… …… …… …… …… …… …… ……

5.7.4.2 The OBC indicated that the cost of the Advisors fees

would be in the region of £……. As a direct result of the requirement to bring forward the date of Financial Close to 2012/13, the estimated cost of the Advisor Fees has increased by £……. NHS Grampian and NHS Highland will resource this increase from their respective Revenue/Capital allocations.

5.7.4.3 Additional non-recurring costs are anticipated in

2014/15 in respect of commissioning of the buildings and transfer of services from existing premises. An estimated £27,000 in total (Forres £10k, Woodside £7k and Tain £10k) will be required to meet the cost of decanting, pre-cleaning, deployment of equipment (including IT), security during commissioning phase and post project evaluation.

5.8 Capital Costs and Associated Funding for the Project

5.8.1 The following capital is needed to support the project.

Table 34

Forres Woodside Tain Total Capital Section £m £m £m £m Costs Land & Fees 5.8.1.1 …… …… …… …… Tain Access Road 5.8.1.1 …… …… …… …… Equipment 5.8.1.2 0.298 0.175 0.319 0.792 Dental Equip - Non Cash Ltd 5.8.1.2 0 0.019 0 0.019 Sub Debt Investment 5.8.1.3 …… …… …… …… External Advisor/Hub Support Costs 5.8.1.4 …… …… …… …… OBC Preparation 5.8.1.4 …… …… …… …… Capital Costs …… …… …… …… Sources of Funding Board Formula Capital …… …… …… …… Tain - Sale of Health Centre …… …… …… …… Dental Equip - Non Cash Ltd 0 0.019 0 0.019 SGHD Capital …… …… …… …… SGHD Hub Enabling …… …… …… …… SGHD Sub Debt Allocation …… …… …… …… Sources of Funding …… …… …… ……


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5.8.1.1 Land Purchase 5.8.1.1.1 Forres The land for the Forres site was purchased in

financial year 2007/08 from NHS Grampian’s capital allocation.

5.8.1.1.2 Woodside The purchase of the land at Woodside is due to be

completed in January 2013. The purchase has a fixed cost of £……. An additional £……has been added to account for the associated CLO fees. Hub enabling funding was allocated to meet the fixed cost of land.

5.8.1.1.3 Tain The purchase of the land at Tain is due to be

completed by 15 February 2013 and will be funded from hub Capital Enabling Funds. The contribution to the creation of the access road (to be shared jointly with the neighbouring Care Home) is estimated at £……. The road will also be funded from hub enabling funds.

5.8.1.2 Equipment

Equipment lists and costs were updated for all three projects, in advance of the submission of the OBC and OBC addendums’ in November 2012. These costs have not yet been subject to further refinement and therefore, the same figures are carried forward to the FBC. The equipment costs (inclusive of VAT), allowing for an element of existing equipment to transfer, for Forres, Woodside and Tain are £0.298m, £0.175m and £0.319m respectively. As was indicated in the Woodside OBC, a proportion of the equipment amounting to £0.019m relates to public dental services and a case has been presented to the SGHD for this to be funded from Dental Non Cash Limited sources. There is a risk that the case is not successful, which would result the capital requirement being increased by £0.019m. The NHS Grampian Capital Plan indicates that funding for the equipment at Forres and Woodside is from a specific additional SGHD capital allocation which will be made available in 2013/14.

The Tain equipment will be funded from the Net Book Value Benefit of the current Tain Health Centre site, which will be realised upon its sale. There is likely to


21 January 2013

be a delay between purchase of equipment and sale of the property. NHS Highland will therefore fund the purchase of the equipment from its SGHD Formula Capital funding in the interim period.

5.8.1.3 Sub Debt

The Scottish Government issued a letter on 6 July 2012 regarding subordinated debt investment in hub DBFM projects, outlining what is expected of NHS Boards. The letter states that in the event that other participant authorities in the territory opt not to invest, then Boards with a direct interest in the project will be required to provide for the shortfall (up to the full 30% sub debt investment requirement) from their capital programmes. Letters will be sent to the other participants in the North Territory, shortly after submission of this FBC, to ascertain whether they wish to invest in the subordinated debt. This FBC continues to make the prudent assumption that the Boards will be required to invest the full 30% in sub debt.

The Forres and Woodside Health Centres (NHS

Grampian) and Tain Health Centre (NHS Highland) have been combined into the FWT Bundle of three projects, within one overarching hub project with a single Project Agreement. According to financial model v0850, the total sub debt investment required from participating authorities for the FWT Bundle of three projects is £……, with the Forres, Woodside and Tain share of the investments being £……, £…… and £…… respectively. As the final cost of the lending deal will only be confirmed at Financial Close, these figures are indicative at this stage. Following approval of the Woodside OBC and the Forres and Tain OBC Addendums, the SGHD has confirmed that for this project, the Boards’ capital allocations will be increased in 2012/13 to cover the cost of the sub debt investments.

5.8.1.4 Advisor and Project Support Costs/OBC Preparation The SGHD has confirmed that NHS Highland can utilise their hub enabling funds to cover the cost of the Professional Advisor Fees, hub support costs and the cost of the OBC preparation.


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5.9 Comparison of OBC and FBC Revenue Costs

5.9.1 Tables 35, 36 and 37 below compare the estimated revenue costs of the preferred options for each of the projects at OBC stage, with the latest projections at FBC stage.

Table 35

Forres Section OBC FBC £m £m Costs Unitary Charge 5.9.4.1.1 …… …… Additional Depreciation (Equipment) 5.9.4.1.2 0.030 0.030 Other Scheme Costs (Net Additional) 5.9.4.2 0.028 0.021 Total Additional Revenue Costs …… …… Sources of Funding SGHD Unitary Charge 5.9.4.3.1 …… …… GDS Non Cash Limited 5.9.4.3.2 …… …… Third Parties (Practices, Social Work) 5.9.4.3.4 …… …… Total Sources of Funding …… …… Board Funded Additional Revenue Costs …… ……

Table 36

Woodside Section OBC FBC £m £m Costs Unitary Charge 5.9.4.1.1 …… …… Additional Depreciation (Equipment) 5.9.4.1.2 0.018 0.018 Dental Salaries 5.9.4.1.3 0 0.060 Other Scheme Costs (Net Additional) 5.9.4.2 0.110 0.027 Total Additional Revenue Costs …… …… Sources of Funding SGHD Unitary Charge 5.9.4.3.1 …… …… GDS Non Cash Limited 5.9.4.3.2 …… …… Third Parties (Practices, Social Work) 5.9.4.3.4 …… …… Total Sources of Funding …… …… Board Funded Additional Revenue Costs …… ……

Table 37

Tain Section OBC FBC £m £m Costs Unitary Charge 5.9.4.1.1 …… …… Additional Depreciation (Equipment) 5.9.4.1.2 0.032 0.032


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Dental Salaries & Supplies 5.9.4.1.3 0 0.030 Other Scheme Costs (Net Additional) 5.9.4.2 0.139 0.127 Total Additional Revenue Costs …… …… Sources of Funding SGHD Unitary Charge 5.9.4.3.1 …… …… GDS Non Cash Limited 5.9.4.3.2 …… …… GMS/GDS Cash limited 5.9.4.3.3 …… …… Third Parties (Practices) 5.9.4.3.4 …… …… Total Sources of Funding …… …… Board Funded Additional Revenue Costs …… ……

5.9.2 The revenue costs above are based on the services within the

current facilities moving in full into the new facilities. This releases savings from the old buildings, which contribute to meeting the additional costs in the new buildings. These savings are factored into the net figures.

5.9.3 The additional revenue costs are factored into the draft 5 year

Financial Plan’s of NHS Grampian and NHS Highland, to be finalised following Board and CIG approval of this FBC and the LDP.

5.9.4 A summary of key movements between OBC and FBC are

summarised below: 5.9.4.1 Revenue Costs

5.9.4.1.1 Unitary Charge None of the projects show a change in the Unitary Charge, since the same lending terms and building costs are assumed for the FBC as the OBC. Section 5.3.7 outlines the reasons for this.

5.9.4.1.2 Depreciation

The depreciation relates to the equipment being purchased. The capital cost estimates and accounting treatment of this have not changed since the OBC and hence there is no movement in the depreciation figures.

5.9.4.1.3 Dental Salaries and Supplies Woodside

The Public Dental Services at Woodside will transfer from other facilities. To facilitate this and ensure an appropriate level and quality of staffing there is expected to be an increase in staff numbers and cost. The resources required will predominantly be


21 January 2013

existing in nature. However it is expected that two new posts will be required at a cost of £……. NHS Grampian has submitted a Business Case to the SGHD requesting that the these posts and the additional property costs of the expanded Dental accommodation of £…… are funded prior to closure of the Dental Non Cash Limited Fund in 2013/14. The actual cost of the dental salaries had not been included in the OBC, as the service had not been fully specified at that time.

Tain

The annual revenue costs for the 2 additional dental chairs at Tain are not known as they will be incurred and funded by the GDP partner practice as agreed with SGHD.

5.9.4.2 Other Scheme Costs

The building running costs of each of three projects have been revised following an in-depth exercise that was undertaken to compare revenue cost assumptions across the three projects.

Forres The net impact of the building running cost revision is a reduction of £8k compared to the OBC.

Woodside

In addition to the building running cost revisions, a saving on GMS funding has been identified as a result of the SGHD contribution to the Unitary Charge. The net effect of both of these is a reduction of £…… to the net additional property costs compared to the OBC.

Tain

The net impact of the building cost revision is a reduction of £…… compared to the OBC.

5.9.4.3 Sources of Funding 5.9.4.3.1 SGHD Unitary Charge

As the Unitary Charge has not changed from OBC to FBC, the SGHD element of the funding remains the same.


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5.9.4.3.2 GDS Non Cash Limited

Woodside

There is a small reduction of £…… in the funding requirement being applied for in relation to the property revenue costs.

Tain

The additional Salaried Dental funding requirement of £…… will be made available by the SGHD upon relocation of the existing team. The expenditure in relation to the GDP practice will be incurred when the Practice opens and non cash limited GDP GDS funding will be available and will vary according to the level of activity.

5.9.4.3.3 GMS/GDS Cash Limited

Tain

The GMS/GDS reimbursable elements of the property costs of £…… are now included in the FBC as a fully funded element. It had previously been included as a cost that the Board would require to fund from new money or efficiency savings, rather than from within current GMS/GDS budgets.

5.9.4.3.4 Third Parties (Practices, Social Work)

Woodside

The effect of the exercise carried out in relation to the building running costs is a reduction in the cost to third parties within the building of £…… per annum compared to the OBC.

Tain

The net effect of movements in the property revenue costs result in a small increase to the practices of £…… compared to OBC.

5.10 Comparison of OBC and FBC Capital Costs

5.10.1 Although the preferred procurement route is a hubCo DBFM contract, the projects require a significant element of capital investment to enable them to proceed. Tables 38, 39 and 40 below compare the estimated capital costs at OBC stage with the latest projections at FBC stage.


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Table 38 Forres OBC FBC £m £m Capital Costs Land and Fees …… …… Equipment 0.298 0.298 Sub Debt Investment …… …… Total Capital Costs …… ……

Table 39 Woodside OBC FBC £m £m Capital Costs Land and Fees …… …… Equipment 0.175 0.175 Dental Equipment 0.019 0.019 Sub Debt Investment …… …… Total Capital Costs …… ……

Table 40 Tain OBC FBC £m £m Capital Costs Land and Fees …… …… Tain Access Road …… …… Equipment 0.319 0.319 Sub Debt Investment …… …… External Advisor/Hub Support Costs …… …… OBC Preparation …… …… Total Capital Costs …… ……

5.10.2 Movements in the capital costs between OBC and FBC are

summarised below. Forres No change is forecast to the capital requirement at FBC stage,

although the sub debt investment is subject to amendment on Financial Close.


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Woodside No change is forecast to the capital requirement at FBC stage,

although the sub debt investment is subject to amendment on Financial Close.

Tain The contribution of £…… to the access road for the New Health

Centre, shared jointly with the neighbouring Care Home had not been included at OBC stage. This is because it was intended that the cost be included in the hubCo contract. The road is now being funded from hub Capital Enabling Funds allocated to NHS Highland, primarily because the road is required in advance of the signing of the contract with hubCo.

It has been confirmed by the SGHD that NHS Highland can

charge up to £…… of the Professional Advisor Fees for Tain to hub Capital Enabling Funds.

The sub debt investment is subject to amendment on Financial

Close. 5.11 Overall Affordability

5.11.1 The key financial components are summarised in Table 41 below. Figures relate to the first full year of operations, 2014/15.

Table 41

Forres Woodside Tain Total £m £m £m £m Capital Costs …… …… …… …… Net Depreciation …… …… …… …… Net Board Running Costs (incl UC) …… …… …… …… Unitary Charge Total …… …… …… …… Unitary Charge - NHS Boards/Third Parties …… …… …… …… Unitary Charge - SGHD …… …… …… ……

5.11.2 Capital Costs

Forres The total capital cost relating to Forres of £…… includes £…… for the land purchase in 2007/08. The remaining costs relate to the sub debt investment and equipment. These are funded from specific SGHD capital allocations in 2012/13 and 2013/14 respectively. Woodside The total capital cost relating to Woodside of £…… is for the land purchase, the sub debt investment and equipment


21 January 2013

(including £…… of equipment to be funded from Dental Non Cash Limited). The land purchase is funded from hub enabling funds, with £…… of fees funded from NHS Grampian formula capital. The sub debt investment and the remaining equipment are funded from specific SGHD capital allocations in 2012/13 and 2013/14 respectively. Tain The total capital cost relating to Tain of £…… is for the land purchase, the contribution to the access road, the sub debt investment, equipment external advisor costs and the OBC preparation. The land purchase, contribution to the access road, external advisor costs and OBC preparation are funded from hub Capital Enabling Funds. The equipment is to be funded from the sale of the current Health Centre in Tain and the sub debt investment is funded from a specific SGHD capital allocation in 2012/13.

5.11.3 Depreciation relates to equipment only. The Boards have

incorporated the additional charges in their financial plans. 5.11.4 The net additional running costs of the Projects for the Boards to

fund of £…… (£…… for Forres and £…… for Woodside) for NHS Grampian and £……for NHS Highland is included in their forward planning for revenue consequences.

5.11.5 In summary, NHS Grampian and NHS Highland are committed

to the project and have incorporated the necessary funding increases for capital and revenue consequences in their financial plans and LDP for the coming years.

5.12 Risks

5.12.1 The FWT Bundle of three projects has a single risk register,

incorporating a list of risks that affect the overarching project and a list of specific risks for each of the three projects. The risk register has been developed in joint workshop sessions with hub North Scotland Ltd and are updated as changes to risks occur and new risks are identified.

5.12.2 There are currently 31 risks identified within the FWT Bundle

wide risk register that are open. None of these risks are categorised as “Red”. Six of these risks are rated in the “Amber” category (summarised below) and mitigation strategies are in place as far as is practicable (see Table 22 Section 3.6). It is anticipated that the majority of these risks will be closed, or mitigated to reduced levels in the period leading up to Stage 2 submission and Financial Close.

5.12.3 The risks carrying the greatest impact are; the possibility that

funding terms at financial close exceed the buffer identified at FBC and/or that the preferred lender withdraws its offer. The market lending rates and lender commitment to the potential funding deal will be monitored during Stage 2 and up to financial


21 January 2013

close to identify such a situation as early as possible if it transpires.

5.12.4 The probability of the alternative funding deal from Aviva being

selected as the preferred option means that an additional risk is introduced. The Project Agreement documents will require some alteration by the respective legal teams as a result of this and there is therefore a risk that this cannot be completed in time to allow Financial Close. The legal teams and hubCo have however given an assurance that this will be completed as scheduled.

5.11.5 The other risks in the “Amber” category relate to the programme

not being achieved for the Stage 2 submission and approval and the likelihood of BREEAM “Excellent” scores for the buildings not being achievable within budget.

5.12.6 Project Specific Risks Forres There are 13 risks specific to Forres that are currently open.

Two of these risks are in the “Amber” category. The cost to replace the existing football pitch may exceed the

allowance included in the Stage 1 costs. Work to find an affordable solution that is acceptable to all is underway.



Woodside There are 8 risks specific to Woodside that are currently open.

Two of these risks are in the “Amber” category: A formal letter is awaited from Aberdeen City Council on the

Biomass planning decision. Any delay in its receipt will delay purchase of the land for the development.



In addition to these, it should be noted that there is a risk of the

business case for the Non Cash Limited funding for additional Dental services being rejected by the SGHD, as indicated in section 5.6.2.6c.

Tain There are 11 risks specific to Tain that are currently open.

There are three risks in relation to Tain in the “Amber” category:


21 January 2013

Should an independent Dental practitioner not be found for the

additional space at Tain, then the running costs of that element of the building will fall to NHS Highland.

Another risk is in relation to the purchase of the land. This has

not yet been completed and the lender requires this to be completed in advance of financial close.



5.12.7 The Unitary Charge figure will be partially subject to the impact

of inflation over the life of the contract with reference to the RPI. This is standard practice. The risk of movements in the RPI remains with the Board for the duration of the Project. The Board will deal with this from its allocated resources and reserves set aside for inflationary purposes. The project team will continue to monitor these risks and mitigate the impact.

5.13 Agreed Accountancy Treatment

5.13.1 The three projects will be delivered under a single hubCo DBFM

Service Concession Contract over a 25 year term with NHS Grampian and NHS Highland retaining all of the assets for no additional financial consideration at the end of the contract term.

5.13.2 The DBFM contract is defined as a ‘Service Concession’

arrangement under International Financial Reporting Interpretation Committee Interpretation 12 (‘IFRIC 12’) and will be “on balance sheet” in the accounts of NHS Grampian and NHS Highland.

5.13.3 The contract and payment mechanism follows the hub DBFM standard form which SFT has confirmed incorporates transfer of construction and availability risk in order to deliver a “private” classification under ESA95.

5.13.4 NHS Grampian and NHS Highland will recognise the cost, at fair

value, of the property plant and equipment underlying the service concession as a non current (tangible) fixed asset and record a corresponding long term liability. The asset’s carrying value will be determined in accordance with IAS 16 subsequent to financial close but for planning purposes fair value is assumed to be the Operator Model construction cost; Forres £……, Woodside £…… and Tain £…….

5.13.5 Compensating additional CRL cover of £…… for Forres,

£……for Woodside and £……for Tain will be required in financial year 2014/15 when the asset is initially recognised.


21 January 2013

This value will be confirmed following agreement on financial close.

5.13.6 The ‘lease rental’ paid on the long term liability will be derived by

deducting all operating, lifecycle and maintenance costs from the contract amounts paid to the hubCo. The ‘lease rental’ Annual Service Payment’ will be split between repayment of the liability, interest charged on the liability and contingent rentals determined according to the indexation provisions in the Project payment mechanism.

5.13.7 The annual charge to the Statement of Comprehensive Net

Expenditure (SOCNE) will consist of all operating, lifecycle and maintenance costs, contingent rentals, interest and Depreciation calculated on a straight line basis.

5.13.8 On the expiry of the contract term the Net Book Value of the

asset will be equivalent to the residual value assessed in accordance with IAS 16.

5.13.9 The land (£…… for NHS Grampian and £…… for NHS

Highland) and equipment (£…… for NHS Grampian and £…… for NHS Highland) procured to enable the project, from NHS capital resources, will be accounted for by NHS Grampian and NHS Highland as a non current (fixed) asset.

5.13.10 The additional revenue costs incurred by NHS Grampian and

NHS Highland will be covered partly by revenue support funding from the SGHD and partly by Non Cash Limited Dental funding. Provision has been identified within the Boards’ strategic financial plans to cover the balance (£…… for NHS Grampian and £…… for NHS Highland) through local redesign and cost improvement programmes.


21 January 2013

6. THE MANAGEMENT CASE 6.1 Project Management

6.1.1 This section aims to outline the project management arrangements leading up to Financial Close and moving through design and build into the operation of the completed facility.

6.1.2 A Joint NHS/Sub-hubCo Project Group has been established to

direct and monitor the process towards Financial Close. The group initially met fortnightly. The remit is to ensure that all programme objectives are being met consistent with the project timetable, the frequency of these meetings has increased to weekly or twice weekly in the run up to Financial Close.

6.1.3 A Financial Close protocol has also been agreed between

NHSG, NHSH and Sub-hubCo to clearly document the process to be undertaken at the actual Financial Close. These processes will be tested in the weeks running up to Financial Close.

6.1.4 Robust project management plans have been developed to

undertake Stage 2, the production of the Full Business Case for approval of the preferred option, Financial Close and thereafter to supervise construction and prepare for commissioning and occupation of the buildings. Project roles have been identified and appropriately experienced personnel have been identified, see Section 6.3. As this is only the second DBFM Project in Scotland, and the first involving two Health Board areas, the NHS Project Team is supported by an experienced team of technical, legal and financial advisors along with colleagues from SFT.

6.1.5 As outlined in earlier sections the FWT Project Full Business

Case (FBC) is a single FBC which includes all three projects in the FWT Bundle Project which will have a single Project Agreement’ including; Forres Health and Care Centre, Woodside Fountain Health Centre and Tain Health Centre.

6.1.6 Project Programme

6.1.6.1 Table 42 sets out the milestones for the development of the FWT Bundle Project through Full Business Case (FBC). Approval to Financial Close and bring into operation. This timetable is based on an FBC approval in February 2013.

Table 42

Activity Timescale OBC Approval - NHSG Boards 6 November 2012 OBC Approval – CIG SGHD 20 November 2012 FBC Formal Consideration by NHS Boards

6 February 2013

FBC Formal Consideration by CIG SGHD

26 February 2013

Stage 2 Submission 4 March 2013 SFT Stage 2 KSR Approval 11 March 2013


21 January 2013

Stage 2 Acceptance 13 March 2013 Financial Close w/c 18 March 2013 Start on Site 15 April 2013 FBC Addendum to NHSG Board May 2013 FBC Addendum to SGHD May 2013 Completion/Handover 11 April 2014 Asset 24 FM Service Commencement 11 April 2014 Bring into Operation (Clinical Services)

28 April 2014 (circa)

Asset 24 FM Service Completion 11 April 2040

6.1.7 Project Structure and Organisation

6.1.7.1 Project organisational charts, including the remit and membership of key project groups, is outlined in Sections 6.2, 6.3 and 6.4.

6.1.7.2 The management structure of Sub-hubCo is set out

in the Territory Partnering Agreement and demonstrates how partnering services will be delivered for frontrunner and future pipeline projects that are included in the Territory Partnering Plan.

6.1.7.3 The project will flow through 3 main phases from

concept to operation. The project organisational structure has been developed to take account of the differences between these three phases:

• Concept to Financial Close • Financial Close to Operation • Operation to Service Completion (25 year term)

6.1.7.4 Each phase requires a different organisational

structure; the Project Board and Project Groups will have common and specific roles and responsibilities during each phase. The structure, roles, remits and skills required need to reflect the differing needs of each phase.

6.1.7.5 Section 6.2 seeks to outline the structure and

organisation of the project during the phases Concept to Financial Close and Financial Close to Operation. 6.3 and 6.4 then outline the roles and responsibilities of key groups and key personnel involved in delivering the project. The Structure during Operation is included in Section 6.5


21 January 2013

6.2 FWT Project Structure Concept to Operation

Figure 21

6.3 Role and Responsibilities Concept to Operation

6.3.1 The organisational structure outlined in Figure 21 is common for the Concept to Financial Close phase and also the Contract Close to Operation phase of the project. The main differences relate to the role of groups during the different phases, also the Joint Independent Tester role and the Sub-hubCo are not formally in place until the project is preparing for Financial Close.

6.3.2 Asset Management Group (AMG)

6.3.2.1 Remit

• The remit of the AMGs is to ensure system-

wide co-ordination and decision making of all proposed asset investment/disinvestment decisions for NHSG and for NHSH respectively, ensuring consistency with policy and the strategic direction of NHSG and NHSH.

• The AMG works in conjunction with the NHS

Board Senior Management Team to ensure consistency of approach consistent with policy and affordability.

Figure 1

Joint Technical Groups

Joint Project Group

Chair: Ewen Fowlie NHS Project Team Chair: Jackie Bremner

hubCo Project Team

hub North Scotland Ltd FWT Bundle Project

Board Chair: Alan Gray/Nick

Kenton

Joint Commercial

Contract Team

Specific Project Groups

Woodside Chair: Robert Dunlop

Tain Chair: Andy Laurie

Forres Chair: Adam

Caldwell

Woodside Chair:

Heather Kelman

Tain Chair: Nigel Small

AMGs

NHS Boards hubCo Board

Forres Chair: Andy Laurie

NHSG Governance Structure


21 January 2013

6.3.3 FWT Bundle Project Board

6.3.3.1 Membership

Senior Responsible Officer, Director of Finance, NHS Grampian (Co-Chair) Senior Responsible Officer, Director of Finance, NHS Highland (co Chair) Project Director, FWT Bundle, NHS Grampian Commercial Lead, FWT Bundle, NHS Grampian Finance Lead, FWT Bundle, NHS Grampian Head of Capital and Property Planning, NHS Highland Head of Property and Asset Development, NHS Grampian General Manager – Aberdeen City CHP, NHS Grampian General Manager – Moray CHP, NHS Grampian District Manager – East and Mid Ross, NHS Highland SFT Advisor

6.3.3.2 Remit

• To agree the scope of the project and

supervise development of the concept and detailed design consistent with NSHG and NHSH strategy with appropriate stakeholder involvement.

• To drive the projects through OBC and FBC approval within the NHS and thereafter the Capital Investment Group at SGHD.

• To assure the project remains within the framework of the overall project strategy, scope and budget.

• To work with Sub-hubCo and SFT to develop and agree the Project Agreement.

• To agree the inputs (e.g. CAPEX, sub-debt, FM and lifecycle cots) to be used in the financial model.

• To work with Sub-hubCo and SFT to develop successful New Project Request, Stage 1 and Stage 2 submissions (and approval as appropriate) including preparing for the Key Stage Reviews.

• In partnership with all stakeholders to successfully conclude Financial Close.

• To review the Risk Management Plan, ensuring all risks are identified; that appropriate mitigation strategies are actively applied and managed and escalated as necessary, providing assurance to the NHS Boards that all risks are being effectively managed.

• To ensure that staff, partners and service end users are fully engaged in designing operating policies that inform the detailed design and


21 January 2013

overall procedures that will apply which in turn will inform the Project Agreement i.e. ensuring that the facilities are service-led rather than building-led.

• To develop, manage and review the Communication Plan ensuring appropriate involvement of, and communication with, all stakeholders, internal and external, throughout the project from conception to operation and evaluation.

• To work with Sub-hubCo to ensure that the completed facilities are delivered on programme within budget and are compliant with the Authority’s Construction Requirements and Sub-hubCo’s proposals.

• To supervise the functional commissioning and bring the facilities into operation in respect of the elements for which the NHS is responsible.

6.3.4 FWT Bundle Joint Project Group

6.3.4.1 Membership

Hubco Project Director, hub North Scotland Ltd (Chair) Project Manager, Sweett Group Bundle Project Director, NHS Grampian Finance Lead, NHS Grampian Commercial Lead, NHS Grampian Technical Lead, NHS Grampian Project Manager, NHS Grampian Forres Business Manager, Moray CHSCP, NHS Grampian Tain Head of Capital and Property Planning, NHS Highland Woodside Community Planning and Project Support Manager

6.3.4.2 Remit

• To supervise production of the Project Agreement and all Project Agreement schedules.

• To ensure production of the Stage 1 and Stage 2 submissions consistent with the programme.

• To ensure that appropriate CDM arrangements are in place to supervise the project through all of its stages.


21 January 2013

• To review progress against programme, report to Project Board.

• To maintain and manage risks and Project Risk Plan and escalate as appropriate.

• To ensure development of FM arrangements including development of Schedules 12 and 14 contract monitoring documentation and staff training.

• To progress all design issues relating to e.g. the Reviewable Design Data, the Finishes Schedule and the Change Protocol as per the Project Agreement.

• To work with the Independent Tester to ensure compliance with the Authority’s Construction Requirements, Sub-hubCo proposals and the completion criteria per the Project Agreement.

• Plan and agree arrangements for the technical commissioning as per the agreed programme.

• Agree and implement arrangements for handover.

6.3.5 FWT Bundle NHS Project Team

6.3.5.1 Membership

Bundle Project Director, NHS Grampian (Chair) Finance Lead, NHS Grampian Commercial Lead, NHS Grampian Technical Lead NHS Grampian Project Manager, NHS Grampian Tain Head of Capital and Property Planning, NHS Highland District Manager – Ross, East and Mid Ross, NHS Highland Accountant, NHS Highland Woodside CHP Practice Development Support Manager, NHS Grampian CHP Finance Manger, NHS Grampian CHP Community Planning and Project Support Manager Forres CHP Business Manager, Moray CHSCP, NHS Grampian CHP Finance Manager, NHS Grampian

6.3.5.2 Remit

• To coordinate the production of all Authority’s

Requirement documents for the Bundle.


21 January 2013

• To coordinate the production of all technical and financial schedules from an NHS perspective.

• To participate with SFT in the Key Stage Reviews, helping to ensure their successful completion.

• To coordinate the production of the OBC and the FBC.

• To supervise the development of the Occupation Agreement, as appropriate, with building users e.g. General Practices.

• To ensure communication with all internal and external stakeholders and appropriate user involvement in relation to e.g. workforce planning, functional commissioning and relocation.

• To ensure the development of all appropriate policies and procedures (clinical and FM) to ensure the smooth operation of the building once operational.

• To commission specific redesign work associated with the redesign of services relocating to the new facilities.

• To plan for the post project evaluation. • To supervise the specification, procurement

and commissioning of all group 2, 3 and 4 equipment.

• To supervise the specification of all group 1 equipment consistent with the Project Agreement.

• To supervise the development and implementation of functional commissioning plans including service relocation, staff orientation and training etc.

6.3.6 FWT Joint Commercial Contract Team

6.3.6.1 Membership

Commercial Lead, FWT Bundle, NHS Grampian Commercial Director, hub North Scotland Ltd NHS Legal Advisor, Pinsent Mason As required: Project Director, FWT Bundle, NHS Grampian Finance Lead, FWT Bundle, NHS Grampian NHS Technical Advisor, Mott McDonald NHS Financial Advisor, PwC Project Director, hub North Scotland Ltd hubCo FM Provider, Asset 24 SFT Advisor Other NHS/hubCo team members


21 January 2013

6.3.6.2 Remit

• To manage all commercial and legal issues associated with delivering a successful Financial Close.

• To discuss and agree the Project Agreement schedule of material amendments.

• To review the hubCo led funders competition. • To ensure production of all appropriate legal

schedules for inclusion in the Project Agreement consistent with the programme.

• To ensure the Project Agreement is complete with all contract derogations agreed ready for Financial Close.

• To prepare and agree all appropriate conditions precedent with the NHS Boards in preparation for Financial Close.

• To arrange the Commercial Close and Financial Close arrangements with the NHS Boards and hubCo.

• To agree the inputs (e.g. CAPEX, sub-debt, FM and lifecycle costs) to be used in the financial model and recommend to the Project Board for approval.

• To review and agree the financial model with hubCo the financial advisors and SFT.

• To negotiate and agree the Payment Mechanism an service schedule within the Project Agreement

6.3.7 Specific Project Groups for each project – Forres,

Woodside and Tain 6.3.7.1 Membership

General Manager (Chair) CHP/Locality Managers (2) Project Clinical Lead General Practitioner Other Clinicians (2) Practice Manager Dental Practice Manager CHP/Locality Finance Manager CHP/Project Support (2) Public Representative

6.3.7.2 Remit • To lead on any land purchase with physical

planning colleagues. • To lead on communication and involvement

with staff, service users and the wider population.


21 January 2013

• To ensure that any Occupation Agreement is agreed with relevant partners e.g. General Practice/s.

• To contribute to the production of the OBC and FBC particularly the strategic and economic section (option appraisal).

• To lead on production of the Benefits Realisation Plan.

• To lead on all service redesign activities associated with the successful operation of the new facility, including design and operation of services and workforce etc.

• To lead on the development of operational policies in collaboration with the hubCo FM provider where appropriate.

6.3.8 Joint Technical Groups for each project – Forres, Woodside

and Tain

6.3.8.1 Membership

NHS Technical Lead, NHS Project Manager, NHS CHP/Locality Service Management Representative Clinical Property Advisor, NHS Grampian Hubco hubCo Project Manager, Sweett Group CDM, Sweett Group Tier 1 Contractor Senior Design Manager, MCUK Design Team Architect, Halliday Fraser Munro or Keppie Design Project Engineer, Halcrow Yolles M&E, Buro Happold or Wallace Whittle As required Project Director, NHS Grampian Commercial Lead, NHS Grampian

6.3.8.2 Remit

• To lead on design development consistent with

the Authority’s Requirements. • To undertake regular risk reviews on behalf of

each project to inform the Bundle Risk Plan. • To ensure all appropriate site investigation and

survey work is undertaken to inform design. • To ensure appropriate planning consents and

building warrants are in place consistent with the programme.


21 January 2013

• To agree all appropriate technical derogations. • To ensure regular design review using AEDET. • To ensure BREEAM excellence is, where

possible, achieved as part of the design development.

• To ensure that regular HAI SCRIBE assessments are undertaken at key stages throughout the projects.

• To support the development of all information required to inform the development of the Stage 1 and Stage 2 submission by hubCo.

• To co-ordinate all design issues relating to reviewable design data, finishes, Group 2 equipment and implementation of the change protocol consistent with the PA.

• To ensure all utility information is available to inform design and operation of the facilities once commissioned.

6.4 Roles and Responsibilities

6.4.1 Senior Responsible Officer - Alan Gray/Nick Kenton, Directors of Finance, NHSG and NHSH

The key functions of this role will be to provide corporate leadership, support the OBC/FBC through the approval process to SGHD, lead on external communication with SGHD and MSPs, etc, obtain funding and resources to ensure the project’s delivery, negotiate on escalated issues with e.g. hubCo or NHSG or NHSH Boards. To support the Project Director and Project Team to deliver the project as agreed in the FBC and PA.

6.4.2 Project Director - Jackie Bremner, Programme Manager,

NHSG The key functions of this role will be to lead and coordinate the

project through all its stages in collaboration with the Project Team, Service Management Team, Executive Board, hubCo, and SFT from Initial Agreement through NPR, Stage 1, OBC, Stage 2, FBC, Contract Close and Financial Close/start on site. Ensuring that the deal is fit for purpose, consistent with the strategic objectives, affordable and demonstrates value for money. To lead on the production and approval of the SCIM compliant OBC and FBC. To ensure successful completion of the facilities and bring into operation consistent with the project objectives and PA.

6.4.3 Project Manager - Post Vacant, currently going through

NHSG Vacancy Management Procedures The key functions of this role during implementation will be to

assist the Project Director in ensuring that the project is progressing on all areas consistent with the agreed programme


21 January 2013

and cost envelope. To ensure regular risk identification, review, and management in collaboration with hubCo.

6.4.4 Commercial Lead - Stan Mathieson, Physical Planning

Development Manager To lead on production of the Project Agreement and schedules

e.g. Payment Mechanism working with hubCo, legal advisors and SFT to ensure that the commercial deal is fit for purpose, commercially sound, has transferred appropriate risks to hubCo and demonstrates value for money for NHSH and NHSG. To lead on the commercial case in the OBC/FBC. To lead, with the support of the Contract Manager and Service Managers and hubCo/FM Service provider, bringing the facility into operation from a Sub-hubCo FM contract perspective.

6.4.5 Finance Lead – Ross Davidson, Finance Manager, NHSG The key functions of this role during implementation will be to

lead on all key financial issues in relation to the ‘deal’ including e.g. the financial model, sub-debt, funding competition review, economic appraisal for revenue project and financial analysis and value for money. Also to work with other finance colleagues and the commercial lead to produce the economic and financial sections of the OBC and FBC. To work with the Commercial Lead, Contract Manager, hubCo and FM Service Provider in relation to operation of the Payment Mechanism.

6.4.6 Technical Lead - Derek Morgan, Head of Projects, Estates,

NHSG and John Bogle, Head of Capital and Property Planning, NHSH

The key functions of this role during implementation will be to

lead on the production of the technical specification and production of the technical authority requirements and to ensure that Sub-hubCo’s proposals are consistent with the authority requirements including any agreed derogations. To work with hubCo to ensure all reviewable design data, finishes, Group 2 equipment and change protocol issues are concluded consistent with the PA during construction and commissioning.

6.4.7 Service Leads

• Heather Kelman, General Manager, Aberdeen CHP, NHSG • Adam Coldwell, General Manager, Aberdeenshire and Moray

CHP’s, NHSG • Nigel Small, Director of Operations, South & Mid Operational

Unit, NHSH Clinical Leads

• Dr Julia Wallace, General Practitioner, Woodside Medical Group

• Dr Jamie Hogg, Clinical Lead, Moray CHSCP


21 January 2013

• Dr Ian Scott, Clinical Director, South & Mid Operational Unit, NHSH

To create the strategic case for the IA, OBC and FBC and

ensure that the strategic objectives and service/clinical brief is clear and delivered by the project. To lead on all service redesign required to ensure that the new facility delivers the desired service benefits. To support the Project Team during commissioning and bring into operation the facilities.

6.5 Structure during Operation

6.5.1 In addition to the structure put in place to deliver the project, an organisational structure that will help to ensure that the DBFM projects, once in operation, are well managed over the 25 year contract period. This section seeks to outline the NHS’s likely approach to contract management of DBFM projects. Figure 22 outlines the likely structure for operating the DBFM Contract, this structure may be subject to refinement during the months to come. This contract management service may be procured as a service delivered in partnership with another public sector partner with contract management experience e.g. ACC.

6.5.2 Strategic Operational Management Team

6.5.2.1 Remit

• The OMT of NHSG and SMT of NHSH forms part of the Operational Management Framework by making key operational decisions on behalf of the respective Boards.

6.5.3 DBFM Strategic Management Group

6.5.3.1 Membership

Chief Operating Office (Chair) CHP General Managers (2) DBFM Commercial Lead Director of Finance General Manager – Hard and Soft FM Clinical Rep (as required) Contract Manager

6.5.3.2 Remit

• Strategic contract management role. • Sharing policy and other strategic

developments with contractor • Supervise operational monitoring:

- Ensure obligations of contract are being met - Performance of Sub-hubCo so that services

are delivered to required standards and actions for non-performance are adhered to


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- NHS meet the end user obligations in respect of the contract

Figure 22 Structure during Operation

6.5.4 Joint Contract Monitoring Team

6.5.4.1 Membership

Sub-hubCo Sub-hubCo Representative

Asset 24 Representatives NHSG DBFM Commercial Lead Contract Manager Estates Manager Finance Representative

hubco Board NHS Boards

hub North

Scotland Ltd

Operational

Management

Team

Sub - hubco

DBFM Strategic

Management

Group

Joint Contract

Monitoring Team

Sub - hubco

FM Provider

NHS Contract

Team


21 January 2013

6.5.4.2 Remit

• Regular review of the performance audit reports produced by the FM Service Provider and any patient suggestions/complaints and reports as appropriate.

• Discuss and agree remedial action in relation to any areas of poor performance.

• Plan for any training jointly where appropriate. • Review Pay Mech. and agree appropriate

deductions.

6.5.5 NHS Contract Team

6.5.5.1 Membership DBFM Commercial Lead Contract Manager Estates Manager Finance Representative

Service Representative

6.5.5.2 Remit

• Review the performance audit reports produced by the FM Service Provider and also any appropriate patient comments, suggestions, complaints and Datix reports as appropriate for discussion with FM Service Provider.

• Review Pay Mech. deductions and amend as appropriate.

• Arrange for training of new and existing staff in relation to operating the contract

6.5.6 Contract Manager

6.5.6.1 Working closely with the DBFM Commercial Lead,

the Contract Manager post is being developed and will be appointed during the construction phase to help ensure a smooth transition between construction and operating phases.

6.5.6.2 Role of Contract Manager between Contract Close

and Operation Work with the FM Service Provider and NHS

Services Managers to produce contract monitoring documents, agree policies and working arrangements including:

• Risk Register • Communications Plan • Governance Structure • Transition Plan


21 January 2013

• Contract Admin Manual • User Guide • Project Directory • Contingency Planning • NHSG/NHSH Contract Obligations • Information Strategy • Help Desk Procedures • Staff Training (so that all users are able to

engage appropriately with this new way of working, nurturing a joint working relationship with Sub-hubCo and the FM Service Provider)

6.5.6.3 Role of Contract Manager during Operation

The Contract Manager will be responsible for the management, auditing and co-ordination of the Project Agreement to ensure due diligence in terms of the application of the Payment Mechanism and the performance management arrangements. To co-ordinate activities between the Sub-hubCo/FM Service Provider and the building users to ensure the effective delivery of services the facilities included in the Project Agreement.

• To manage the Project Agreement on behalf of

the NHS. • To act as the key link between NHSG/NHSH

operational FM Service Providers and the Sub-hubCo/ and FM Service Provider.

• To ensure the FM Contract, policies and procedures are being adhered to by all parties.

• To review and amend policy and procedure by mutual agreement with the FM Service Provider and Sub-hubCo.

• To review regularly FM Service Provider performance with NHSG/NHSH Contract Team in preparation for Joint Contract meetings.

• To review audit/performance data and undertake spot check audits as required.

• To liaise with Finance Department to ensure accurate Pay Mech deductions consistent with performance criteria outlined in the contract Schedules 12 and 14 of the Project Agreement.

• To prepare reports for the DBFM Strategic Management Group.

6.6 External Advisors

6.6.1 The Board’s Project Team is supported by a team of external advisors, as set out below:

• Legal - Pinsent Masons • Financial – PricewaterhouseCoopers • Technical – Mott MacDonald


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6.6.2 Additionally NHSG and NHSH are being supported by SGHD

SFT who retain responsibility for managing and agreeing any changes to the new standard form Design Build Finance and Maintain (DBFM) Project Agreement being used for the first time for a ‘bundle project’ in Scotland.

6.6.3 The Project Team shall continue to review the advisory

appointments to ensure appropriate and continued advisor support is made available throughout the construction period and into early operation stage as necessary.

6.7 Partnership Working

6.7.1 Partnership working is key to the success of the project that

NHSG, NHSH and Sub-hubCo work closely and in the spirit of partnership throughout the implementation of the project FBC, financial close, construction, commissioning, occupation and operation throughout the Project Term.

6.7.2 It is important to the culture of delivery within the project that a

partnership approach is developed rather than an adversarial culture.

6.7.3 The main interface will therefore be via the Joint Project Group

and through day-to-day contact between the respective Project Director, Project Manager, Authority representative (role as defined in the Project Agreement) and the wider project groups.

6.8 Change Management

6.8.1 The three projects are included in the NHSG and NHSH Property

and Asset Management Strategies helping to ensure that the right estate is in place to support the implementation of the NHSG and NHSH service strategies.

6.8.2 The focus of the redesign work is consistent with the Benefits

Realisation Plans, see Section 6.9 and Appendices 6a, 6b and 6c.

6.8.3 Examples of the service redesign work associated with the three

projects includes, for example:

• Ensuring that primary and community staff (health and social care) work together in a co-ordinated way for the benefit of patients and their carers.

• The development of new patient pathways that help to ensure patients are seen in a timely and co-ordinated fashion at the right time, by the right person, in the right place.

• Ensuring that, where possible, information technology and telehealth/telecare help to support these new care pathways.


21 January 2013

• Providing dental care for vulnerable patients with complex and special needs who find it difficult to access GDP services.

6.8.4 A Communication Strategy for staff, patients, primary care

contractors and partners will form a central part of the change plan, raising awareness of the forthcoming changes during the months leading up to the three new buildings being brought into use.

6.8.5 This, and other associated redesign work, will be led by the three

Project Groups for Forres, Woodside and Tain and progressed by the Practice Managers (GMS and Dental) with support from the CHPs to help ensure that the benefits aimed for are not lost between the planning and operational stages. The work will involve all stakeholders (internal and external), operational managers and their teams and will utilise, where appropriate, other support including e.g. Human Resources and the Service Improvement/Modernisation Team.

6.9 Benefits Realisation

6.9.1 The benefits of the three projects included in the FWT Bundle have been outlined as part of the business case process. A Benefits Realisation Plan for each of the three FWT Projects has been developed and set out arrangements for the proposed benefits, their planning, modelling and tracking. The three Project Teams, have worked with the NHSS ehealth Team and colleagues from the Primary Care Directorate at SGHD to develop comprehensive Benefits Realisation Plans using the methodology developed by the ehealth Team. The plans are included as Appendix 6a, 6b and 6c.

6.9.2 Current service providers and service users are clear that

immediate benefits of the new buildings would include greatly increased opportunities for co-located health and social care staff working closer to the patient and adopting a strengths based, preventative and anticipatory focused care and treatment. Protection of the patient facing role of all practitioners is essential and improving ways of working to support clear patient care pathways will be central to service user’s engagement in both primary health, social and dental services.

6.9.3 The planning process allowed the full involvement of clinical and

non clinical staff, management, patients and members of the public. This involvement will continue to help to shape the operational and clinical specification to ensure user centred design has evolved and that form follows function.

6.9.4 Overall responsibility for ensuring that the benefits of the project

are achieved rests with the NHSG and NHSH operational management teams and the GMS Practices and will be managed through line accountability and demonstrated in performance review of objectives.


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6.9.5 Where relevant, the performance measures identified within the

Benefits Realisation Plan will be reviewed as part of the Project Evaluation Plan.

6.9.6 The Key benefits to be obtained in all three projects are covered

by nine main benefit headings:

• Improved Accessibility (physical access) • Improved Oral Health • Improved Accessibility (service) • Improved Outcomes for Older adults with long term conditions • Workforce Sustainability • Patient Satisfaction/Improved Experience • Integration (co-location of multi-professional teams) • Safety and Security • Improved Technology

6.9.7 The Benefits Realisation Plans included in the FBC represent the

preliminary work done to date by the three project teams. All three teams are committed to further developing the Benefit Realisation Plans to better reflect the strategic benefits to be realised as well as the more local benefits for staff working in and patients receiving care in the new premises. The Benefits Realisation Plan evaluations will also help to inform the Post Project Evaluations.

6.10 Risk Management

6.10.1 Overview

6.10.1.1 Major capital projects bring with them the potential for significant risks and one of the keys to the successful delivery of infrastructure projects is the management of risk. The FWT Bundle Project follows well established risk management methodologies and best practice in terms of organisation and has established a project structure where escalated risks are actively managed.

6.10.1.2 Risk is managed within the Project Team as

described in the Project Structure (Section 6.2) and led by the Project Director. The risk work stream has been established to identify, evaluate, manage and monitor risks throughout the life of the project. Since Initial Agreement approval, a number of risk workshops have been conducted to identify the retained risks inherent in the project. The workshops explore all risks covering business risk, services risk and external risk, as defined in SCIM, with a view to identifying ways of eliminating, reducing and managing the risks in a manner that mitigates any effect on the project overall.


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6.10.1.3 Under the hub DBFM option, significant risk is borne by Sub-hubCo and not the Boards.

6.10.2 Role and Remit

6.10.2.1 The remit of the NHS Project Team during the FBC

stage has been to review all project risks and establish a register that reflects the project status and DBFM model.

6.10.2.2 Each identified risk, along with the agreed

management actions and the identified Risk Owner has been recorded in the revised project Risk Register. The Risk Register is a live document, which is updated as new risks are identified and existing risks amended. The current Risk Register is included as Appendix 2j. In accordance with emerging reporting remit of the Project Team, the 10 highest rated risks are reported on an exception basis to the Project Board at every meeting.

6.10.2.3 The risk assessment is intended to identify the key

risks associated with the option. Subsequently, these are evaluated, where possible priced, and a risk management strategy is developed to determine how to best manage the risks.

6.10.3 Methodology

6.10.3.1 The process of risk assessment is fourfold:

• Risk Identification – develop a risk register

covering key risk areas and individual risks within these areas.

• Risk Assessment – each of the options was assessed against the Risk Register. The process will be continued for the preferred option at FBC to continually assess the impact, probability and exposure using a simple scale of 1 (low) to 5 (very high). The overall exposure to risk is then a product of the impact of risks and likelihood of them occurring.

• Risk Quantification – putting a value to each of the risks using estimates of probability, impact and timing are determined for the preferred option.

• Developing a Risk Management Plan – a plan to manage all the risks identified in the Risk Register for the preferred option, including responsible persons and monitoring mechanism.


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6.10.4 Risk Assessment Process

6.10.4.1 Risk Registers have been reviewed and up-dated since the projects, originally developed under the HFS Framework procurement route were transferred to hub. A recent risk register is provided in Appendix 2j. Items of risk have continually been assessed via dedicated workshops attended by members of the Project Team.

6.10.4.2 Risk exposure has been assessed through assigning

probabilities to events. The probability of each of the risks occurring and the impact, should it occur, has been assessed using the following scale; Low, Medium, High and Very High (see Figure 23).

Figure 23

LIKELIHOOD

SEVERITY / IMPACT

Insignificant Score 1

Minor Score2

Moderate Score 3

Major Score 4

Extreme Score5

Almost Certain Score 5

MEDIUM 5

HIGH 10

HIGH 15

VERY HIGH

20

VERY HIGH 25

Likely Score 4

MEDIUM 4

MEDIUM 8

HIGH 12

HIGH 16

VERY HIGH 20

Possible Score 3

LOW 3

MEDIUM 6

MEDIUM 9

HIGH 12

HIGH 15

Unlikely Score 2

LOW 2

MEDIUM 4

MEDIUM 6

MEDIUM 8

HIGH 10

Rare Score 1

LOW 1

LOW 2

LOW 3

MEDIUM 4

MEDIUM 5

6.10.4.3 Appendix 2k includes the assessment criteria used

by the Joint Project Group to assess/reassess and apply risk categories for each risk at each risk review meeting.

6.10.4.4 The product (by multiplying together) of the

assessment of the potential impact and the probability of occurrence gives rise to an overall analysis of the risk e.g. low to high.


21 January 2013

6.10.4.5 In terms of the risk scoring matrix outlined in

appendix 2k. The probability and impact assessment is made by a multi professional team at each joint project group meeting. The probability level is agreed collectively by the team as is the severity/impact level. The impact level is based on either time or cost whichever is felt to represent the greatest risk. For example, if the risk level is more accurately expressed as a time delay then it takes precedence. If the risk is felt to be more appropriately expressed in terms of cost impact, then it take precedence.

6.10.4.6 This provides a useful indication of the risks requiring

the greatest degree of risk management effort.

6.10.5 The Risk Register

6.10.5.1 A Joint Project Risk Register was developed with involvement from key NHS and hubCo team members. This register identifies and assesses the level of risk and assigns an owner to all project risks i.e. either hubCo, NHS or shared. Each risk is reviewed to mitigate and/or, where possible, eliminate the risk. The Risk Register is reviewed at every Joint Project Group meeting. The risk and mitigation is reviewed, new risks are identified, risks are closed and significant risks are escalated, as appropriate. A copy of the most recent Risk Register is enclosed at Appendix 2j.

6.10.5.2 The risk management strategy will be to regularly

review the Risk Register to continue to minimise the level of risk and ultimately control the risk through agreed management strategies. The risk reviews will be undertaken jointly with hubCo. This process will be completed through a monitoring structure incorporating in-house managers and external financial, legal and technical advisors.

6.11 Post Project Evaluation

6.11.1 The purpose of undertaking a Project Evaluation is to assess how well the scheme has met its objectives and whether they have been achieved to time, cost and quality. Performance measures already contained in the Benefits Realisation Plan will not be replaced in the Project Evaluation Plan (PEP).

6.11.2 The evaluation will be led by the Board Planning Teams and

supplemented by representatives of the user groups and other key stakeholders. The Project Board, or its successor, will receive evaluation reports on each element. For this FWT Bundle Project each Board (NHSG and NHSH) will commission


21 January 2013

and complete three project specific evaluations. The broad approach and timing of each will be the same.

6.11.3 In accordance with current guidance and good practice the

project will be evaluated in stages:

6.11.3.1 Stage 1 – Procurement Process Evaluation

6.11.3.1.1 An evaluation of the procurement process will be undertaken following Financial Close to assess the effectiveness of the procurement process in meeting the project objectives and identify any issues and lessons to be learned. This stage will also enable the Project Team to review its performance and aid in future development of skills.

6.11.3.2 Stage 2 – Monitoring Process

6.11.3.2.1 During the construction period progress will be monitored to ensure delivery of the project to time, cost and quality to identify issues and actions arising. On completion of the construction phase the actual project outputs achieved will be reviewed and assessed against requirements, to ensure these match the project’s intended outputs and deliver its objectives.

6.11.3.2.2 In addition the Project Board will

undertake a brief evaluation workshop at 6 monthly intervals throughout the project to allow for reflection, learning and improvement as the project progresses through its various phases.

6.11.3.3 Stage 3 – Initial Project Evaluation of the Service

Outcomes

6.11.3.3.1 This will be undertaken 6 to 12 months after the new facility has been commissioned. The objective is to determine the success of the commissioning phase and the transfer of services into the new facilities and what lessons may be learned from the process.

6.11.3.4 Stage 4 – Follow-up Project Evaluation

6.11.3.4.1 This will be undertaken 2 years into the operational phase by the Evaluation Team to assess the longer term service


21 January 2013

outcomes and ensure that the project’s objectives continue to be delivered.

6.11.3.4.2 In each stage the following issues will be

considered:

• To what extent relevant project objectives have been achieved.

• To what extent the project went as planned.

• Where the plan was not followed, why this has happened.

• How plans for the future projects should be adjusted, if appropriate.

6.11.4 Objectives of the Evaluation

6.11.4.1 The objective of the evaluation it to learn from the project with the aim of resolving issues as they arise where possible and to learn retrospectively about issues that the project and its stakeholders faced to try and make sure that they are avoided or indeed repeated where appropriate in future projects contributing to the body of learning and the quality of project and risk management, both within NHS and across Scotland in co-operation with e.g. Health Facilities Scotland.

6.11.4.2 Additionally the Post Project Evaluation (PPE) will be

linked with the Benefits Realisation Plan review where appropriate, to assess whether the objectives of the project have been achieved.

6.11.5 Scope of the Evaluation

6.11.5.1 A number of dimensions will be explored during stages 2-4 of the project evaluation. NHSG and NHSH will use the ‘Logical Framework Approach’ to provide a framework for completion of the evaluation.

6.11.5.2 Table 43 below provides an indication of the areas

that will be explored at the different stages of evaluation. This will be subject to change and refinement throughout the project.

6.11.5.3 Where possible any necessary work will be

undertaken by the Benefits Realisation and PPE Sub Group to commission audit and survey work during 2013/14 to provide a baseline against which specific elements of the project will be evaluated. Additionally a judgment will be made in relation to specific elements of the evaluation when it is difficult to determine which action had an impact on e.g. service performance indicators.


21 January 2013

6.11.6 Methodology

6.11.6.1 The evaluation will use a number of quantitative and qualitative methods to gather information to include for example, structured questionnaires, semi-structured interviews, team workshops and retrospective audit of project records.

6.11.7 Evaluation Team

6.11.7.1 The Evaluation Team will include two key officers for

each project evaluation; e.g. the Clinical Property Advisor and a Health Intelligence Analyst with appropriate administration support.

6.11.7.2 The Benefits Realisation and PPE Steering Groups will

support and manage the project evaluation through design, construction, commissioning and operation. The membership may change over the life of the project but involves:

• Project Director • Project Manager (Service) • Project Manager (Technical) • Senior Service Manager • Clinical Property Advisor • Stakeholders (2) – Service Leads • Public Representative (1) • Estates Representative • Finance Representative

6.11.8 Post Project Evaluation Dimensions

Table 43 Stage 2 Stage 3 Stage 4

Evaluation of time, cost and service performance

Adherence to management procedures Adherence to the procurement process Review of the design solution

Review of the Contractor’s performance

Have the benefits outlined in the Benefits Realisation Plan been achieved Is the building functionally suitable Has the NHS Backlog maintenance register been reduced as planned What did stakeholders feel about involvement and communication throughout the different stages of the project Was the correct equipment specified and procured Was the project completed on time Was the project completed on budget Was the commissioning/bring into operation process, smooth, organised and co-ordinated What were the reasons for delay What actions should be taken to prevent future problems

Have the benefits outlined in the Benefits Realisation Plan been achieved Is the building functionally suitable Has the NHS Backlog maintenance register been reduced as planned Have the operating costs outlined in the FBC been achieved or improved Have the maintenance costs outlined in the FBC been achieved or improved What has been the impact of the risk allocation on NHS


21 January 2013

6.11.9 Resources

6.11.9.1 The direct costs required to undertake the two formal evaluations at 6 months post occupation and 2 years post occupation will be circa £10,00 for each project’s evaluation.

6.11.9.2 This includes the following assumptions regarding

time for both exercises. The other main cost is time and, for the many staff involved in the exercises, that is difficult to quantify and will be an opportunity cost for NHSG and NHSH.

Assumed time for each of the 2 formal evaluations:

Table 44

6.12 Support from NHS Boards

6.12.1 The FWT Project FBC is signed off by the NHSG and NHSH Chairs and Chief Executives on behalf of the NHSG and NHSH Boards, for submission to the Scottish Government for FBC approval and permission to proceed to Financial Close.

Cllr Bill Howatson Mr Richard Carey Chairman Chief Executive NHS Grampian NHS Grampian Mr Gary Coutts Ms Elaine Mead Chairman Chief Executive NHS Highland NHS Highland

Hours Activities per Project 11 Agree Criteria and Scope 11 Develop Tools 22 Distribute Questionnaires and Arrange

Interviews 44 Undertake Interviews/Records Review 44 Undertake Analysis 33 Write Report 8 Communicate Outcome to System for

Learning Purposes 8 Communicate to AIG, Board and CIG 181 181 hours divided by 7.5 hours divided by

1.5 people = 16 days of work


21 January 2013

Appendices

2a Forres OBC Addendum Approval Letter 2b Woodside OBC Approval Letter 2c Tain OBC Addendum Approval Letter 2d Letter of Stakeholder Support – Forres and Woodside 2e Letter of Stakeholder Support – Tain 2f Sustainability and Design Quality Objectives 2g Accommodation Schedule - Forres 2h Accommodation Schedule - Woodside 2i Accommodation Schedule - Tain 2j Risk Register 2k Risk Assessment Criteria 2l Public Stakeholder Involvement - Forres 2m Public Stakeholder Involvement - Woodside 2n Public Stakeholder Involvement - Tain 3a Drawings – Preferred Option - Forres 3b Drawings – Preferred Option - Woodside 3c Drawings – Preferred Option – Tain 4a Statements of ‘In Principle’ Agreement from GMS Practices 5a Revenue Consequences for Preferred Options 6a Benefits Realisation Plan - Forres 6b Benefits Realisation Plan - Woodside 6c Benefits Realisation Plan – Tain 6d Glossary of Terms


21 January 2013

APPENDIX 2a

Forres OBC Addendum Approval

Letter


21 January 2013


21 January 2013

APPENDIX 2b

Woodside OBC Approval Letter


21 January 2013


21 January 2013

APPENDIX 2c

Tain OBC Addendum Approval Letter


21 January 2013


21 January 2013

APPENDIX 2d

Letter of Stakeholder Support – Forres and Woodside


21 January 2013


21 January 2013

APPENDIX 2e

Letter of Stakeholder Support - Tain


APPENDIX 2f

Sustainability and Design Quality Objectives


FWT Bundle Project Appendix 2f Sustainability and Design Quality Objectives Sustainability Objectives The Building Research Establishment’s Environmental Assessment Method for Healthcare (BREEAM) sets the standard for best practice in sustainable building design, construction and operation and has become one of the most comprehensive and widely recognised measures of a building's environmental performance. Consistent with NHSScotland, NHSG has an aspiration that, where possible, all new buildings achieve a BREEAM Excellent rating. In that regard an independent BREEAM assessor has been appointed and is working with the project team with the aim of achieving BREEAM Excellence. Design Quality Objectives In accordance with SCIM guidance, item g in the Critical Success Factors outlined in Section 2.9, and the a number of the investment objectives outlined in 2.9, the Achieving Excellence Design Evaluation Toolkit (AEDET Evolution) toolkit will be used throughout the development of the project to help NHSG manage the design from initial proposals through to detailed design and will continue to do so through to post project evaluation. The AEDET toolkit has three key dimensions and outlines 10 assessment criteria. Each of the 10 areas is assessed using a series of questions which are scored on a scale of 1-6. The standard required should result in all 10 dimensions of the AEDET toolkit scoring between 4 and 6.


APPENDIX 2g

Accommodation Schedule - Forres


Forres Health Centre SOA Oct-12

ROOM NO. SPACE AREA

(as drawn) GROUND FLOOR A. Forres Practice 01a GP Consulting Room 1 16.50 01b GP Consulting Room 2 16.50 01c GP Consulting Room 3 16.50 01d GP Consulting Room 4 16.50 01e GP Consulting Room 5 16.50 01f GP Consulting Room 6 16.50 02a GP Consulting Trainer 1 16.97

04a GP Consulting Registrar (Trainee) 1 16.50

05a GP Consulting (additional ) 1 16.50 25b General Store 10.14 B. Varis Practice 01g GP Consulting 7 16.50 01h GP Consulting 8 16.46 01j GP Consulting 9 16.46 01k GP Consulting 10 16.46 01l GP Consulting 11 16.46 01m GP Consulting 12 16.50 02b GP Consulting Trainer 2 17.21

04b GP Consulting Registrar (Trainee) 2 16.50

05b GP Consulting (additional) 2 16.50 25a General Store 10.14 C. Nursing Unit 03a Nurse Practitioner Consulting 1 16.48 03b Nurse Practitioner Consulting 2 16.27 09a Treatment Room 1 18.07 09b Treatment Room 2 18.02 10a Phlebotomy 1 11.99 10b Phlebotomy 2 11.99 11a Clinette 1 4.29 12a Urine Testing 4.85


13 Minor Procedures/Surgery Room 20.24 14a Treatment Store 1 4.04 14b Treatment Store 2 4.06 14c Phlebotomy Store 4.03 14d Minor Surgery Store 4.81 D Treatment Unit 34 CNT Store 19.95

35a Outpatients and Podiatry Consulting 1 15.16

35b Outpatients and Podiatry Consulting 2 15.02

36 Midwives 15.02 38 Podiatry Store 5.54 39 4 Trolley Bays 40.80 39b Patient Shower 7.05 39c Sluice 8.40 39d Pantry 8.05 45 Rehab Therapy 1 42.12 46 Rehab Therapy 2 40.17 47 OT Kitchen 15.02 49 Physiotherapy Store 10.18 50a Changing 1 2.50 50b Changing 2 2.50 51 Diagnostic Room 38.22 52 Reception/Radiologist 26.01 53 Patients WC 4.93 E. Entrance and Reception 06a Interview Room 1 9.44 06b Interview Room 2 9.30 06c Interview Room 3 9.00 07a Waiting Area 1 43.56 07b Waiting Area 2 61.62 8.00 Children's Play Area 15.58 16 GP Reception 10.03 30 Multi-Purpose Room 42.80 31 MP Store 4.33 55 Entrance Lobby 12.05 56 Wheelchair Bay 3.56 57a Male WC 2.19 57b Male WC 2.19


57c Male WC 3.02 58a Female WC 2.19 58b Female WC 2.19 58c Female WC 2.19 58d Female WC 4.23 59a Patient's Disabled WC 4.58 59b Patient's Disabled WC 4.58 60 Baby Change 4.48 F. Common Administration 17 Mail Room 18.10 G. Staff Facilities 61b Staff WC 2.45 62b Staff WC 2.50 62c Staff WC 3.29 62d Staff WC 2.45 H. Services 29a Clinical Waste 7.07 29b Clinical Waste 7.09 66a DSR 1 7.08 66c DSR 3 9.30 68 Switchroom 8.80 69 Plant Room J. Non-GP Administration 21 Pharmacist 9.40 37 AHP Office 38.56 48 Physiotherapy Office 12.48 FIRST FLOOR A. Forres Practice 20a Practice Manager 12.72 B. Varis Practice 20b Practice Manager 12.02

F. GP Common Administration

18 Administration 84.29


19 Records Store 24.06 G. Staff Facilities 22 Meeting Room 40.04 24 Library and Teaching 20.03 26 Staff Rest Room 57.92 27 Male Changing 6.79 28 Female Changing 14.62 61a Male Staff WC 2.47 61c Staff WC 2.19 62a Female Staff WC 2.47 63 Disabled Staff WC 5.07 64 Male Staff Shower 4.40 65 Female Staff Shower 4.98 H. Services 66b DSR 2 7.08 67 IT Room 11.92 J. Non GP Administration 32 Health Visitors/Midwives 60.64 33 District Nurses 44.10 40 CHP Hot Desks 12.22 41 Social Work Office 27.56 42 Senior Social Worker 9.97 43 Team Leaders 11.28 44 Social Work Store 8.36


APPENDIX 2h

Accommodation Schedule - Woodside


Woodside Medical Group Medical Group SOA

ROOM NO. SPACE

AREA (on

schedule) AREA

(as drawn) Lower Ground Floor

LG01 Vestibule 6.00 6.00 LG02 Waiting Area 10.10 10.50 LG03 Reception/Admin/Records 16.50 16.20 LG04 Practice Manager Office 12.00 17.60 LG05 Corridor LG06 Stairwell LG07 Dental Waste Store 7.00 18.30 LG08 Disabled WC and Baby Change 5.40 7.80 LG09 Visitor WC 2.40 3.40 LG10 Store 8.00 10.70 LG11 DSR 7.00 8.00 LG12 X-ray and Recovery 12.00 12.20 LG13 LDU 14.00 14.10 LG14 Dental Surgery (Special Needs) 19.00 19.00 LG15 Dental Surgery 16.00 16.00 LG16 Dental Surgery 16.00 16.00 LG17 Corridor LG18 Staff WC 2.50 2.80 LG19 Compressor Room 5.00 5.00 LG20 Plant Room 30.00 30.70 LG21 Switch Room 3.70 7.50 221.80 Ground Floor G01 Entrance Vestibule/Pram Bay 10.00 15.50 G03 Waiting Area 78.80 86.30 G04 Multi-Purpose Room 30.00 38.40 G05 Multi-Purpose Room Store 8.00 8.60 G06 Recovery 14.00 14.00 G07 Minor Procedures Room 20.00 20.90 G08 Treatment Room 17.00 17.00 G09 DSR 7.00 7.00 G10 G11 Clinette 4.00 4.00 G13 Disabled WC 6.00 4.60 G14 Female WC 3.00 3.40


G15 Female WC 3.00 3.60 G16 Female WC 3.00 3.40 G17 Treatment Room 17.00 17.00 G18 Treatment Room Store 12.00 11.80 G19 Staff Disabled WC 5.00 7.50 G21 Community Nurses Store 10.00 10.00 G23 Male WC 3.00 3.20 G25 Consulting Room 1 (Trainer) 16.50 16.50 G27 General Equipment Store 15.00 17.60 G28 Consulting Room 2 (Registrar) 14.00 14.00 G29 Records Store 52.50 26.50 G30 Consulting Room 3 14.00 14.00 G31 Reception 12.00 12.20 G32 Consulting Room 4 14.00 14.00 G33 Interview Room 9.00 10.60 G35 Consulting Room 5 14.00 14.00 G36 Node Room 9.00 11.00 G37 Consulting Room 6 14.00 14.00 G38 Consulting Room 13 (CHP Visiting) 14.00 14.60 G39 Consulting Room 7 14.00 14.00 G42 Consulting Room 8 14.00 14.00 G43 Consulting Room 12 16.50 15.90 G44 Consulting Room 9 14.00 14.40 G45 Consulting Room11 14.00 14.90 G46 Consulting Room 10 14.00 16.30 G48 Baby Change 4.00 548.70 First Floor FF02 Team Leader Office 9.00 8.40 FF03 District Nurse/Health Visitor Office 38.50 49.20 FF04 DSR 4.00 3.60 FF06 Admin Office 68.50 67.00 FF07 Female Staff Changing 31.50 24.80 FF08 Female Toilets 7.50 12.30 FF09 Staff Rest Room 67.50 66.50 FF11 Male Staff Changing 4.20 8.00 FF12 Male Toilets 2.00 1.80 FF13 Staff Shower 5.00 3.50 FF15 Practice Manager Office 13.50 12.50 FF16 Meeting Room 22.50 19.40 FF17 Meeting Room 22.50 21.20


FF18 Library 30.00 20.00 318.20


APPENDIX 2i

Accommodation Schedule - Tain


Tain Health Centre SOA May-12 ROOM NO. SPACE AREA A. Entrance and Reception 03a GP Waiting 23.00 03b GP Waiting 22.00 4 Dental Waiting 22.00 5 Community Waiting 5.50 06a Wheelchair Allowance 3.00 06b Wheelchair Allowance 3.00 07a Children's Play Area 9.50 8 Info Point 1.50 09a Disabled WC 5.00 09b Disabled WC 6.50 10a Patient WC 2.50 10b Patient WC 2.50 10c Patient WC 2.50 10d Patient WC 2.50 10e Patient WC 2.50 10f Patient WC 3.00 11 Baby Changing Room 5.50 12 Multi-Purpose Room 37.00 13 Furniture Store 4.00 14 Equipment Store 2.00 15 Dental Reception 9.00 17 Fearn Reception 5.00 17a Fearn Interview 2.00 18 Tain Reception 5.00 18a Tain Interview 3.00 B. Fearn GP Practice 20 Fearn Administration 41.00 22 Practice Manager 15.00 23 GP Office 10.00 28 GP Consulting 1 16.50 29a GP Consulting 2 15.00 29b GP Consulting 3 15.00 29c GP Consulting 4 15.00 29d GP Consulting 5 15.00 29e GP Consulting 6 15.00 29f GP Consulting 7 15.00


30a Treatment Room 2 15.00 30b Treatment Room 1 15.00 36a Clinical Store 1 11.50 38a Stationery Store 3.00 C. Tain GP Practice 24 Tain Administration 28.00 26 Practice Manager 15.00 27 GP Office 12.00 31 Consulting Room 8 16.50 32a Consulting Room 9 15.00 32b Consulting Room 10 15.00 32c Consulting Room 11 15.00 32d Consulting Room 12 15.00 33.00 Treatment Room 3 15.00 36b Clinical Store 2 7.50 38b Stationery Store 2.00 E. Community Unit 04c Community Store 15.00 39a Clinical Treatment Room 1 15.00 39b Clinical Treatment Room 2 15.00 40a Clinical Consulting 1 15.00 40b Clinical Consulting 2 15.00 40c Clinical Consulting 3 17.50 41a Clinical Interview Room 1 10.00 41b Clinical Interview Room 2 10.00 42 Podiatry Treatment Room 16.00 43 Physiotherapy Treatment Area 44.00 44 Community Lead Office 15.00 45 Community Administration Area 51.00 45a Community Reception 8.50 F. Dental 16 Dental Support Office 19.00 48 Dental Treatment 1 15.00 49a Dental Treatment 2 15.00 49b Dental Treatment 3 15.00 49c Dental Treatment 4 17.00 50 Preventative and X-ray 12.00 51 LDU 16.00


54 Clinical Office 11.00 63b Dental Store 16.00 G. Services 61a LDU DSR 7.00 61b DSR 2 9.00 61c DSR 3 9.00 64 X-ray Processing Room 8.00 65 Compressor Room 6.00 67 T Server Room 10.00 69a Switch Room 7.50 69b Elec 1.50 69c Elec 1.50 73a HM 0.50 73b HM 0.50 73c HM 0.50 73d HM 0.50 73e HM 0.50 73f HM 0.50 73g HM 0.50 73h HM 0.50 73i HM 1.00 76 Water Services Plant Room 16.50 H. Staff Facilities 56.00 Female Changing 19.50 57.00 Male Changing 8.00 58a Staff WC 3.50 58b Staff WC 2.50 58c Staff WC 2.50 58d Staff WC 2.50 58e Staff WC 2.50 58f Staff WC 2.50 59a Shower 3.50 59b Shower 3.50 60a Staff Rest Room 35.50 J. Circulation 1 Lobby 9.00 72k Pram Space 2.00


APPENDIX 2j

Risk Register


APPENDIX 2k

Risk Assessment Criteria


APPENDIX 2k

Public Stakeholder Involvement -

Forres


Forres Health and Community Care Centre – Public Involvement Approach

The Forres Health and Community Care Centre project has been managed through the Forres Core Group. As part of that process the core group identified a number of stakeholders who would have an interest in the Forres Project. Apart from the general updates for staff, a number of targeted opportunities were used:

1. Forres Core Group meetings There has been involvement of representatives from the public in the core planning group throughout the different phases of the project. Over the timescale of the project this has meant that a number of members of the public have been involved in discussions on the project

2. Patient surveys Use of patient surveys in determining health needs of the population of Forres. These were very helpful in determining the mix of services to be included within the new facility and views expressed by the patients in completing these surveys were considered as part of the specification process.

3. PPG meetings at Forres Health Centre The Patient Participation Group relating to the two GP Practices in Forres has been developing and maturing during the timescale of this project. Views from the PPG have been particularly helpful with regard to access issues to the new facility.

4. CHSCP Committee meetings This is the formal Committee of the Moray Community Health and Social Care Partnership (CHSCP) which meets on a quarterly basis and includes members of the public, as well as meetings being open to public scrutiny. Regular updates on the progress of the new Forres Health and Care centre have been submitted to this committee over the timescale of the project.

5. Public meetings in Forres Town Hall A number of public meetings have been held in Forres Town Hall (mainly in 2009/2010) to consult on the design, site choice and service configuration for the new facility.

6. Health and Care Framework As part of the Health and Care Framework process taking place in Forres over the last 2 years, the new Forres Community Health and Care centre has been presented and discussed in relation to how the health needs of the


population will be met. Public representatives have been involved in a number of meetings over 2011 and 2012.

7. Option appraisal for Forres When the option appraisal process was determined for the Forres OBC there were a number of public representatives included in scoring of the alternative options, both in terms of service configuration and choice of site. The more recent option appraisal process for the Health and Care Framework alternatives (including the provision of the new facility on the Grantown Road) had involvement from a range of public representatives.

8. Meetings with other contractors Discussion meetings with community pharmacy contractors and independent dental practitioners have taken place over the timescale of the project regarding the provision of both pharmacy and dental services in Forres.


APPENDIX 2l

Public Stakeholder Involvement –

Woodside


Woodside Project – Public Involvement Approach

The Woodside Project Team generated a list of stakeholders, who were the prioritised into categories in terms of interest and influence. As well as stakeholder activities which informed staff and patients about the services, targeted involvement work was carried out using a variety of methods, as follows:

1. Patient Participation Group (PPG) - Woodside have an active PPG,

discussions about the new build have been had with members, who will continue to be kept up to date with the plans for the new development throughout the project.

2. Woodside Network Meetings - Meetings were held with the Woodside

Network in December 2007 and February 2008. Jackie Bremner, CHP Service Planning Lead, Gerry Donald, Head of Physical Planning and GPs from the Woodside Practice attended the Woodside Network meetings to present the emerging physical options and discuss the positives and negatives of each. At these meetings the range of services to be provided from the new premises was also discussed. As a result of the meetings the Network agreed that the Marquis Road option was their preferred option due to its accessibility to the dispersed practice population. A gap by Network Members was identified, due to the lack of dental services in the area. We agreed to investigate this and following subsequent discussion with NHS Grampian Clinical Director for Dental Services; dental provision has been included in the new development to help address the poor dental provision in the area of need.

3. Design Workshops - Design workshops were held throughout summer

2010. The design team was made up of representatives from the Practice, representatives from Aberdeen City CHP, Corporate Communications, the Architects Halliday Fraser Munro, representatives from the Principal Supply Chain Partners (PSCP) Morrison Healthcare and a patient representative. During these workshops the design and layout of the proposed new practice were discussed.

4. Patient Interviews - To support the design workshops and to give a

further patient’s perspective to the design of the proposed Woodside premises, face to face patient interviews were carried out with Woodside patients. The results and comments from these interviews were fed into the design phase of the project.

5. Communications Plan - A communication plan was produced at the

beginning of the project and will be updated throughout the project. The plan will be used to prepare for all of the key communication stages of the project.


6. Practice Newsletter - The Practice produces a quarterly patient newsletter. This newsletter has been and will continue to be used to give updates about the proposed new build.

7. Open Day - Patients, local residents, local community group members

and local pharmacists’ all attended the open day that was held in August 2010 at Woodside Community Centre. The open day was held as part of the consultation and involvement activities with patients and the local community. Over 50 people from the target groups attended and were able to look at the Architect’s plans and drawings of what the Practice might look like, as well as digital 3D images. The Architects, Project Manager, Practice Manager, a GP and Nurse from the Practice and other NHS Staff were all on hand to answer any questions. Our patient representative was also on hand to discuss his involvement in the project and to give the attendees his perspective on the design. People that came along to the open day were also given the opportunity to leave comments and to leave their contact details to ensure that they can be kept informed about the project.

8. Advertising in Practice - Advertising in the Practice included:

• Posters to advise patients of open day and proposed move • Letters for patients to take away with details of open day and sent

with standard patient communication • Notices on prescriptions • Articles in Practice newsletter • Posters of proposed plans displayed in Practice waiting room

The advertising in the Practice will continue and be added to as the project develops.

9. Other Stakeholder Communication - Letters were sent to MPs, MSPs,

local councillors, community councils, local residents, local businesses and posters were displayed in the community centre and other clinics to advise of the open day and to invite interested parties along. We will continue to keep stakeholders up to date by sending newsletters and letters when appropriate.

Each practice in Grampian has a web page on the NHS Grampian

website. Information about the proposed move has been added to the Woodside page and the practice newsletters are added, the newsletters will continue to be used as a communication tool for the move and will be available on the website. The website will be used throughout the proposed move to inform the general public.

10. SHMU and Community Publications - To inform the local community

about the proposed move an article was sent to SHMU to feature in their local community publication ‘Tilly Tattle’. To promote the open day and to give more information about the proposed move a radio interview with one of the Woodside GPs was organised.


11. Proactive Media - Media coverage has already been received at key

stages of this project. During the next stages, we will proactively promote this project to keep the general public, the patient population and local community up to date.


APPENDIX 2m

Public Stakeholder Involvement -

Tain


The Development of Primary Care Services in Tain Stakeholder Involvement The development of primary care services in Tain is a project that has been ‘live’ for over ten years and over that span of time there have been a number of opportunities realised for including stakeholders in the process. In terms of the development of the project to date, the Outline Business Case has been developed through consultations with the following internal and external stakeholders. NHS staff and key leads of departments (e.g. Communities/GP’s/Dental) Public representatives, Local Councillors, Highland Council, Scottish Futures Trust, Local Authority Planning Department, A&DS and it is the intention of NHS Highland to consult widely with various stakeholders associated with the development of the scheme as this scheme proceeds. As we developed the outline business case during 2009/10 the approach adopted for developing the options involved representatives from a range of stakeholders from the community including users, general practitioners, NHS Highland and the local residents in a series of workshops. When the time came for the evaluation of potential options the long list of options covered a wide range of potential solutions and these options were then assessed against a range of investment objectives, constraints and risks using “SWOT analysis” undertaken by Key Stakeholders to establish viable options and an options shortlist. Subsequently a workshop was held on Thursday 12th August 2010 at the Tain Health Centre to appraise the options in non-financial terms. The workshop group appraised the options against the previously developed and weighted non-financial benefit criteria. The workshop commenced by reviewing and refreshing the Critical Success Factors associated with the proposed project and continued to identify the benefits derived from each of those factors. Stakeholders have been involved in the identification and assessment of risk. As the OBC was being developed, the first risk workshop was held on 26th August 2010 and reviews have been held since. The outcome of the workshop is a detailed risk register for the project in line with Health Facilities Scotland (HFS) template. It was developed with the PSCP and provides a clear picture of the expected risks. In the development of the design an initial draft layout was produced to address the main room adjacency principles, as an actual plan often produces more useful feedback from users than the room adjacency alone. A workshop was undertaken with members of the project team on 5th August 2010 at the Tain Health Centre to review and ascertain current and future working patterns and policies. The workshop was facilitated by a healthcare


planner, and the information provided by the clinical and operational staff present resulted in the full clinical operational policies/functional specification. Stakeholder involvement continues with a wide membership including patient representative on the project team. A communications plan has been developed for the project and includes proactive press releases to publicise key events in the progress towards completion of the project. A recent example was the information regarding the building of the access road during October 2012. The communications briefings are distributed to the local press and appear on the NHS Highland Website, twitter and facebook accounts. Drawings of the new build are on display in the existing health centre and dental clinic for all patients to see. With the integration of Health and Social care for adult services and services for children and to provide a link between strategic direction and local service delivery District Partnerships have been convened. They are designed to be action focussed and will provide a clear two-way link between strategic direction and local solutions. They will involve Councillors, relevant managers, community representatives and representatives of professional groups and consider issues relevant to the defined geographic and service delivery area covering both Integrated Children’s Services and Adult Services and will be a key element of local engagement. This provides another opportunity to engage with wider stakeholders and one of their roles is to provide views on the redesign of local services. The first meeting of the East Ross District Partnership was held on 7th December 2012 and the partnership discussed various aspects of the development.


APPENDIX 3a

Drawings – Preferred Option - Forres


APPENDIX 3b

Drawings – Preferred Option - Woodside


Woodside Elevations


Woodside – Site Plan


Woodside – Lower Ground Floor


Woodside – Ground Floor


Woodside – First Floor


APPENDIX 3c

Drawings – Preferred Option - Tain


APPENDIX 4a

Statements of ‘Agreement in Principle’ from GMS Practices

- Dr Govan and Partners Practice, Forres - Varis Medical Practice, Forres - Woodside Medical Group, Aberdeen - Tain and District Practice, Tain - Tain and Fearn Practice, Tain


APPENDIX 5a

Revenue Consequences for Preferred Option


APPENDIX 6a

Benefits Realisation Plan - Forres


APPENDIX 6b

Benefits Realisation Plan – Woodside


APPENDIX 6c

Benefits Realisation Plan – Tain


APPENDIX 6d

Glossary of Terms


GLOSSARY OF TERMS

A+DS Architecture and Design Scotland

ACC Aberdeen City Council

AEDET Achieving Excellence Design Evaluation Toolkit

AHP Allied Health Professional

AMG Asset Management Group

AR’s/ACR’s Authority (Construction) Requirements

BREEAM Building Research Establishments Environmental

Assessment Method for Healthcare

CAPEX Capital Expenditure

Childsmile A national programme to improve the oral health of children

in Scotland

CHP Community Health Partnership

CHSCP Community Health & Social Care Partnership

CIG Capital Investment Group

CLO Central Legal Office

CRL Capital Resource Limit

CSFs Critical Success Factors

Datix Patient Safety Incidents Healthcare Software

DBFM Design, Build, Finance and Maintain Contract

DCF Discounted Cash Flow

DDA Disability Discrimination Act

DDT Direct Delivery Team

DMARD Disease Modifying Anti-Rheumatic Drugs

EAC Equivalent Annual Costs

ESA European System of Accounts

eHealth Healthcare practice supported by electronic processes and

communication

FBC Full Business Case

FM Facilities Management

FMR’s Facilities Management Requirements

FSA Financial Services Authority

GDS General Dental Services

GEM Generic Economic Model


GIFA Gross Internal Floor Area

GMS General Medical Services

GP General Practitioner

HAI SCRIBE Healthcare Associated Infection System for Controlling

Risk in the Built Environment

HBN Health Briefing Notes

HEAT Target Health, Efficiency, Access and Treatment – NHS

Performance Targets

HFS Health Facilities Scotland

hubCo hub North Scotland Limited

IA Initial Agreement

IFRIC International Financial Reporting Interpretation Committee

IFRS International Financial Reporting Standards

INR International Normalised Ratio

KPI’s Key Performance Indicators

KSR Key Stage Review

LDP Local Delivery Plan

MDT Multi-Disciplinary Team

MP Multipurpose

MSP Member of Scottish Parliament

NBV Net Book Value

NHSG National Health Service Grampian

NHSH NHS Highland

NHSS NHSScotland

NIA Net Internal Area

NPC Net Present Cost

NPR New Project Request

OBC Outline Business Case

OMT Operational Management Team

PA Project Agreement

PAT Practice Attached Team

Pay Mech Payment Mechanism

PEP Project Evaluation Plan

PPE Post Project Evaluation

PSDP Private Sector Development Partner


PUK Partnership United Kingdom

PwC Pricewaterhouse Coopers

PwSI Practitioners with Special Interest

QOF Quality and Outcomes Framework

RCWN Ross, Cromarty and West Ness

RPI Retail Price Index

SCIM Scottish Capital Investment Manual

SFT Scottish Futures Trust

SGHD Scottish Government Health Directorate

SHTM Scottish Health Technical Memorandum

SHPN Scottish Health Planning Notes

SIMD Scottish Index of Multiple Deprivation

SMT Strategic Management Team

SOA Schedule of Accommodation

SOCNE Statement of Comprehensive Net Expenditure

Sub-hubCo Special purpose vehicle established for the project

The Authority NHS Grampian and NHS Highland

TUPE The Transfer of Undertakings (Protection of Employment)

UC Unitary Charge

VFM Value for Money

WC Water Closet

FWT BUNDLE PROJECT - NHS Grampian · 6.1 Project Management 135 6.2 FWT Project Structure Concept...

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