Memorandum by Central Manchester and Manchester
Children's University Hospitals NHS Trust (PS 53)
REDEVELOPMENT OF THE CENTRAL MANCHESTER SITE
1. THE TRUST
Central Manchester and Manchester Children's
University Hospitals NHS Trust was established in April 2001 and
is one of the largest teaching hospitals in the country. The Trust
provides adults and children's services to both the local population
of Manchester and for specialist areas, for example, neonatal,
genetics, cardiac, renal, oncology, paediatric intensive care
and burns services to Greater Manchester and beyond in the UK
and for some services internationally.
The turnover of the Trust is nearly £300
million per annum.
2. BACKGROUND
TO THE
PROJECT
A number of major reviews of service configuration
across Greater Manchester culminated in January 1997, with decisions
by the Secretary of State for Health about renal services and
specialist children's services. These decisions, which set the
context for the scheme at Central Manchester were that:
— specialist services at Booth Hall
Children's Hospital and Royal Manchester Children's Hospital (both
of the then Manchester Children's Hospitals NHS Trust [MCHT])
should relocate to the Central Manchester site.
— renal services for the conurbation
should be concentrated at the Central Manchester and Salford Royal
sites.
MCHT and Central Manchester Healthcare Trust
subsequently collaborated on a Strategic Outline Case for the
redevelopment of the Central Manchester site. This was approved
by the Secretary of State for Health in April 1998.
The Outline Business Case was approved in May
2000 and Private Finance procurement commenced with an advertisement
in the Official Journal of the European Community (OJEC) in July
2001.
3. PROJECT STRUCTURE
AND OPENNESS
The project structure is typical of most major
NHS projects. However, there is also a Strategic Board which has
probably enabled a greater level of strategic co-ordination. As
there were two Trusts involved in the development of the scheme,
each with different priorities, the Strategic Board emerged to
provide a forum or "safe environment" within which difficult
issues could be discussed and resolved. The Strategic Board provides
the overall direction for the project and the key parameters (content,
cost and timescale) within which the scheme is to be delivered.
The membership represents the key stakeholders to the project;
Regional office, Health Authority (Manchester), Primary Care Trust
(Central Manchester), the University and the Trust. The membership
has recently been widened and now also includes a representative
from Manchester City Council and Greater Manchester Community
Health Council.
The inclusion of CHC representation on the Strategic
Board was in response to concerns expressed by the CHCs about
lack of openness. It should be pointed out, however, that the
three CHCs (North Manchester, Central Manchester and Salford)
most affected by the Scheme are invited to attend all Trust Board
meetings; a standing item for which is a report on the PFI scheme.
CHCs have also been given regular briefings on the PFI scheme
and more recently (though before the CHC became a member of the
Strategic Board) had been offered regular meetings with the project
team.
As the openness of the PFI process has been
questioned the Trust is talking to other major PFI schemes to
assess whether we can do anything else or learn from experience
elsewhere.
4. CONTENT OF
THE SCHEME
The scheme re-provides five hospitals and includes
the construction of England's first purpose built specialist children's
hospital for 100 years. The hospitals being re-provided are:
— Royal Manchester Children's Hospital
(RMCH) in Salford.
— Booth Hall Children's Hospital (BHH)
in North Manchester.
— Royal Manchester Eye Hospital at
Central Manchester.
— St Mary's Hospital for Women and
Children at Central Manchester.
— Approximately half of Manchester
Royal Infirmary at Central Manchester.
As a Private Finance scheme it also includes
the provision of non-clinical services ie catering, cleaning,
portering and estate maintenance by the private sector provider.
The Trust has been, and will continue to work closely with the
Trade Unions to financial close and beyond. We are awaiting with
interest the outcome of the three pilots on the "Retention
of Employment" model.
5. BENEFITS OF
THE SCHEME
The three key benefits of the scheme are:
— Elimination of split site specialist
children's services currently at three different locations (BHH,
RMCH and St Mary's) thereby ensuring critical mass for services
and enabling accreditation for children's services to be maintained.
— Replacement of buildings at Central
Manchester, which are in poor physical condition, have outdated
facilities and are standalone, with new integrated facilities
for the whole site.
— Development of new models of service
delivery which will be more responsive to the needs of patients
and enable a more appropriate patient environment determined by
the patient's dependency. This is outlined in more detail under
6. below.
There are many many subsidiary benefits for
patients, staff, research, teaching and education.
It is worth noting that the Central Manchester
redevelopment is one scheme within much wider social, urban, commercial
and academic regeneration close to the heart of the City of Manchester.
6. MODERNISATION
Over the last twelve months the Trust has taken
account of both projected growth in activity to 2010 and has remodelled
the way in which the hospitals will function in the future. Clinicians
from both primary and secondary care and managers within the Trust
were closely involved in this process and the aspirations they
articulated are now reflected in the design. This will enable:
— the children's hospital to retain
its own identity;
— a Trust wide culture and ethos;
— separation of elective and emergency
patients within the hospitals;
— dedicated facilities for elective
day patients and those with short lengths of stay (Elective Treatment
Centres or ETCs).
When the new hospital is complete there will
be in excess of 100 more beds in the Trust and it is projected
that there will be approximately 15,000 more inpatients. day cases
(Finished Consultant Episodes) than in 2001/2. It is also projected
that between 80 and 90 per cent of all elective patients will
be treated in the ETCs.
7. PRIVATE FINANCE
PROCUREMENT
Procurement commenced with an advertisement
in OJEC in July 2000. A longlist of six bidders was identified
in September 2000 and following submission of initial bids a shortlist
of three bidders was identified in January 2001. The Trust has
been working with the bidders since then to ensure that three
robust and competitive bids are submitted at the end of November.
Evaluation will take place over the following
five months with the preferred bidder being identified in April
2002.
The target for financial close is December 2002.
8. TIMETABLE
| Strategic Outline Case Approved
| April 1998 |
| Outline Business Case Approved | May 2000
|
| Advertisement in Official Journal European Community
| July 2000 |
| Longlist of Six Candidates | September 2000
|
| Shortlist of Three Candidates | January 2001
|
| Preferred Bidder Identified | April 2002
|
| Contract Signing | December 2002
|
| Children's Hospital and Adults' Facilities Commissioned
| Spring 2006 |
| Eye Hospital and Women's Hospital Commissioned
| Mid 2008 |
9. CAPITAL COSTS[1]
Priced bids from the three Candidates are due to be submitted
on 28 November 2001.
The following is in the public domain:
— The capital cost of the scheme in the Outline
Business Case (OBC) was £250m
— Since the OBC was completed in September 1999/approved
in May 2000, the scheme has been enhanced to take on board a number
of a national initiatives including the requirements of the National
Beds Inquiry, the Cardiac National Strategic Framework and the
NHS Plan.
— The final figures for capital cost will need to
take account of construction cost inflation.
A small mental health redevelopment that will enable the
Manchester Mental Health Partnership to deliver the requirements
of the Mental Health National Service Framework is likely to be
part of the privately finance project.
We would be happy to share other cost data with the Health
Select Committee on a confidential basis.
10. AFFORDABILITY[2]
The additional revenue consequence of the scheme is in excess
of £30m. This will provide, for example, an additional 15,000
FCEs per annum, a Burns Centre for Children serving the north
of England and Information Technology to meet the requirements
of Information for Health/Building the Information Core.
For Greater Manchester Strategic HA, the additional revenue
required when the new hospital opens is approximately equal to
nine per cent per annum of the SHA's assumed growth over the next
seven years.
The affordability of the scheme has been questioned. In particular,
a paper by the Director of Finance at Manchester Health Authority
has been widely quoted with references to "financial deficit"
and "The children's re-provision must proceed but the rationale
around adults services may be less strong".
However, less widely quoted is that the paper also states
"The size of the investment is affordable by the Manchester
health economy over the likely timescale". In addition, the
Chief Executive of Manchester Health Authority was interviewed
on both television and radio about this paper in October. He stated
"One of the reasons for the increase in day-to-day running
costs that we anticipate is because more patients will be treated
at Central Manchester than we anticipated, after all this is a
time of expansion for the National Health Service"......
"I'm saying there will be no financial problem in the context
of the NHS budget for the whole of Greater Manchester."
1
Trusts were notified by Peter Coates, Head of Private Finance
Unit, Department of Health on 27 April 2001 that "Following
discussions with HM Treasury, it has been agreed that as from
today's date, neither the Public Sector Comparator (PSC) nor the
affordability envelope should be made available to the private
sector at any point during the competitive bidding process. The
reason for this change of policy is that the Treasury are concerned
that competition is being constrained and contractors may be pricing
their bids in relation to the Trust's affordability envelope,
rather than the true costs of the project." Back
2
See above footnote. Back
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