Memorandum by the Department of Health
(Continued)
Table 4.8.4b
DISPOSITION OF 2001-2002 CAPITAL RESOURCES
1. Element of NHS capital programme awaiting
to be allocated.
Table 4.8.4c
SOURCES AND APPLICATION OF HCHS CAPITAL
1 The figures are after the transfer to
revenue of the IM&T Modernisation Fund (£240 million)
and Ambulance Response Times (£23 million).
2 These are costs associated with the maintenance
and disposal of the NHS retained estate funded from gross capital
receipts on the retained estate.
3 These are the capital receipts generated
from the sale of NHS trust assets. These receipts can be spent
in addition to those voted in Estimates.
4 Includes centrally held budgets, Health
Authority Capital Cash Limits and High Security Psychiatric Hospitals.
5 This is to cover:
(i) the higher capital threshold in the NHS;
(ii) capital expenditure on Joint Finance
and GMS which are recorded as revenue as they are spent by a third
party.
6 The element of capital charges included
in HCHS revenue but earned by NHS trusts in prices and used to
finance capital expenditure.
7 Figures may not sum due to rounding
18. These tables are presented separately
and show the forecast outturn and an update of the capital disposition
table shown in the 2001-02 Departmental Report.
4.8f For major projects (currently defined
as those greater than £25 million in value), could the Department
please provide a comparison between the PFI price and the publicly
financed option. The publicly financed comparator's costings should
be broken down as follows:
Basic construction contract, broken down
between pre-implementation and post implementation costs;
The value of risk adjustment, again broken
down between pre-implementation and post implementation costs,
in both pounds and percentage terms, and
The final total real full life cost of both
options.
Where adjustments have been made to the PFI
costs (to bring prices to a like for like basis), these should
be broken down on the same basis as the publicly funded option.
Could the Department also provide a brief
commentary on any apparent differences between the reported schemes.
19. The information requested is contained
in the attached tables.
* The negative risk figure is due to 100
per cent transfer of risk of the £4.5 million and £800,000
being income generated by the scheme.
Explanatory notes:
All values are expressed as net present costs
(NPCs) over the life of the project, including the risk values.
The project life is typically assumed to be 60 years.
The NPC of the risk adjustment in each phase
(pre and post implementation) is expressed as a percentage of
the NPC of each phase. The NPCs and risks in the post-implementation
phase are often not comparable between projects, because they
include variable amounts of costs and risks that are common to
both options. For example, the West Middlesex and Dudley projects
include the cost of clinical services in the analysis, so the
NPCs are high compared to other projects.
The cost of PFI options is not broken down into
pre and post implementation, because the Trusts do not start paying
the unitary charge for the development until it is built and available
for use.
The pre-implementation costs refer mainly to
costs associated with the construction of the buildings and the
large equipment items. Some other costs, such as small equipment
items and backlog maintenance, are included in the post-implementation
costs in all cases, even though some of these costs are incurred
before the new building is commissioned. This approach has been
taken to increase the extent to which projects can be compared
on a like for like basis.
In the case of West Middlesex, the negative
figure is due to the 100 per cent transfer of risk of the £4.5
million and £800,000 being income generated by the scheme.
Also note NPC based on cash flow of entire Trust.
For UCLH the value of post implementation risk
for the PFI option is 0 because the PFI project includes two private
wards that will generate £10 million income for the Trust
annually.
4.8g Could the Department update the
information given in Table 4.8g on donated capital additions by
region only?
20. The information requested is contained
in Table 4.8.5
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