Select Committee on Health Minutes of Evidence

Appendix B: Illustrative example of a Risk Description Table

CategoryConstruction and Development
RiskIncorrect Cost Estimate
DefinitionThe cost to complete the construction phase may be different from that estimated in the tender.
Impact OnConstruction timetable and cost
CommentaryPSC: Construction costs in the FBC are based on a standard variation of price government contract. It could change as the design and the programme are developed, or if problems arise.

PFI: The construction cost is a fixed price turnkey price. The risk of changes in cost, during the construction phase, is transferred in full to the private sector.
Risk Retained by TrustPSC: 100 per cent
PFI: 0 per cent
Estimated Cost of RiskPSC: £1,323,000
PFI: £0
Overall Probability25 per cent
TimingRisk is apparent throughout the construction period - Years 1 and 2
Evidence for assumptionsPSC: Experience shows that contract prices are not the final price paid by the trust. The original estimate may be higher or lower than the final contract sum.
Source—Trust's technical adviser and workshop discussions, NHS Estates Database.

  Appendix A: Table of information (question 3a)

  Appendix B: Table of information (question 3c)

  Appendix C: table of information (question 3e)

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