5. CAPITAL EXPENDITURE AND
INVESTMENT
5.1 General
5.1.1 Could the Department provide an
update of Table 5.1.1? [5.1.1]
ANSWER
1. The information requested is given in
Table 5.1.1.
Table 5.1.1
NHS CAPITAL SPENDING 2004-05 to 2007-08 (RESOURCES)
& PFI
|
| 2004-05
| 2005-06 Plan | 2006-07 Plan
| 2007-08 Plan |
| Forecast Outturn | |
| | |
| £ million
| £ million |
£ million | £ million
|
|
| Government Spending (Excluding Foundation Trusts)
| 3,049 | 3,737
| 5,163 | 6,133
|
| Foundation Trust Capital Expenditure | 350
| 500 | na
| na |
| Receipts from Land Sales | 582
| 200 | 200
| 200 |
| Total public capital funding for capital investment
| 3,981 | 4,437
| 5,363 | 6,333
|
| Percentage Real Terms Growth |
| 8.7 | 17.7
| 15.0 |
| PFI Investment | 883
| 1,650 | 2,238
| 1,949 |
| Percentage Real Terms Growth |
| 82.3 | 32.1
| -15.2 |
| Total investment | 4,864
| 6,087 | 7,601
| 8,282 |
| Percentage Real Terms Growth |
| 22.1 | 21.6
| 6.1 |
|
Notes
1. Real Terms Growth calculated using GDP deflator of 2.14%/2.53%/2.70%/2.70%.
2. NHS foundation trust capital spend in 2006-07 and 2007-08 will
depend on the number of NHS foundation trusts in operation, which
will depend on 2005 star-ratings and the Healthcare Commission's
review of NHS foundation trusts, both due in the summer.
5.2 Primary care capital investment and facilities
5.2.1 Could the Department update of table 5.2.2 and
figure 5.2.2, providing a trend analysis of the costs of the rental
reimbursement schemes by category (e.g. notional, actual etc)
and an explanation for any changes? [5.2.2]
ANSWER
1. The information requested is provided in Table
5.2.1 and Figures 5.2.1(a) and (b).
Table 5.2.1
GMS PREMISES EXPENDITURE: SPEND ON GMS PREMISES (ENGLAND)
1997-98 TO 2003-04
|
| £ million | 1997-98
| 1998-99 | 1999-2000
| 2000-01 | 2001-02
| 2002-03 | 2003-04
|
|
| Non Discretionary (Non Cash-limited) Notional Rents
| 68.2 | 75.9
| 85.6 | 93.6
| 87.4 | 87.7
| 84.6 |
| Actual rent | 18.2
| 24.7 | 28.2
| 18.6 | 17.3
| 21 | 37.7
|
| Actual rent -*Health centres (incl Lease and Licence payments only)
| 18.1 | 20.7
| 19.8 | 37.5
| 36.1 | 34.3
| 23.5 |
| Rates /water/sewage | 56.9
| 63.6 | 68.1
| 71.8 | 72.5
| 59.3 | 50.0
|
| *Health centre Rates/water/sewage | 7.1
| 8.1 | 7.1
| 5.7 | 6.3
| 4.3 | 5.4
|
| Ongoing rental on vacated premises, SFA para 55
| | 0.1 |
4.0 | 0.0
| 0.0 | 0.7
| 0.2 |
|
| Non Discretionary Premises total | 168.5
| 193.1 | 212.8
| 227.2 | 219.6
| 207.3 | 201.4
|
|
| Discretionary (Cash-limited) Cost Rents & LA Economic Rents
| 96.3 | 98.2
| 88.9 | 85.6
| 65.1 | 56.1
| 43.3 |
| Improvement grants | 20.3
| 22.2 | 16.9
| 16.9 | 14.2
| 13.5 | 17.5
|
| Improvement grants *(for Health centres) |
7.1 | 5.6
| 2.9 | 4.5
| 3.6 | 5.1
| 7.9 |
| Grants to surrender leases on poor premises under SFA para 55
| N/A | 0.2
| 0.0 | 0.0
| 0.0 | 0.3
| 0.3 |
| Discretionary Premises total | 123.7
| 126.2 | 108.7
| 107.0 | 82.9
| 75.0 | 69.0
|
|
Notes:
1. Non Discretionary: non cash-limited
Please note that from 1997-98 actual rents was split to additionally
show introduction of Health Centre rents incurred. Health centre
rates were created in 1997-98 to identify costs incurred.
2. Discretionary: cash limited
Again with the introduction of monitoring Health centre spend
from 1997-98—Improvement Grants have been split to separately
identify Health Centre spend.
3. Please note that 2003-04 information is based on Final
HFR/PFR discretionary and non-discretionary summarised accounts
outturn.
4. Data up to 1995-96 is based on the returns of the former
90 FHSAs upto 1996, the 100 England HAs and PCTs from 2000-01.
Data from 1996 onwards is based on HA returns. 2002-03 data is
split between 28 SHA Qtr1-2 reporting and 303 PCTs. Q3 & 4
combined returns, owing to PCTs not having non-discretionary banking
rights up until September 2003. 2003-04 data is based on 304 audited
PCT returns.
5. Data on PMS premises spend is not collected centrally.
6. Decreases in all premises spend in 2003-04 are due mainly
to the impact on GP transfers from GMS to PMS and increased waves
1-5b PMS pilots going live.
7. Please note that all figures up to 2001-02 are cash based.
Due to changes in Government Accounting regulations, figures for
2002-03 and 2003-04 are now resource based.
5.2.2 Could the Department provide an account of the
total value of the asset base in primary care by category of owner,
eg NHS, GP, private provider? [5.2.3]
ANSWER
1. The total value of premises occupied by GPs, providing
General Medical Services, is around £1.891 billion. This
comprises £1.279 billion owner-occupied premises, £377
million rented from the private sector and £235 million for
NHS-owned health centres. These figures are based on an amortisation
of actual, notional and cost rents reimbursed to GPs providing
GMS. Data is not collected centrally in respect of premises occupied
by GPs providing Personal Medical Services.
2. These figures are lower than last year due to the
increase in PMS practices.
5.2.3 Could the Department update information on the
backlog in repairs and maintenance for primary care nationally
and by strategic health authority? [5.2.4]
ANSWER
1. Full financial data on the value of backlog repair
and maintenance for the primary care estate is not held centrally.
However, from a total of around 11,000 GP premises, analysis of
a sample of 3,912 rented facilities made in 2001-02 (excluding
health centres) and notional rented owner-occupied premises showed
the following (see pie charts)
2. It is expected that because of the investment in primary
care premises, this picture is improving, but no definitive survey
has been carried out to confirm this.
5.2.4 Could the Department provide update information
on the changing ownership of primary care premises and provide
details of the top ten new provider companies? [5.2.5]
ANSWER
1. The ratios for GP premises are about 63% owner-occupied,
21% private sector owned and 16% are NHS-owned health centres.
To date, premises built by third party developers have mainly
replaced existing premises already rented in the private sector.
It is expected therefore that the above ratios currently remain
fairly constant with a gradual move away from NHS and GP owned
premises towards rented premises.
2. The leasing of purpose built premises to GPs is still
a relatively new concept involving an increasing number of developers
with varying numbers of completed projects. A "top ten"
list of companies is not yet feasible in this maturing sector
of the GP estate. However, the Department has issued standards
of size, design, construction and lease terms that all third party
developers should give regard when building premises suitable
for modern primary care.
5.2.5 Could the Department please update data provided
on all grants, public loans and capital receipts used to fund
or finance primary care facilities on an annual basis since 1997.
[5.2.6]
ANSWER
1. The majority of funding for capital in GMS or PMS
is made available through revenue funding streams—former
health authority and now primary care trust revenue allocations
which include GMS discretionary, PMS funding and GMS non-discretionary
spend.
2. Capital related expenditure in the discretionary element
includes cost rents, improvement grants and computer purchases
and PMS funding, while the non-discretionary element includes
GMS notional rents.
3. Up to 2002-03 a transfer was made each year from HCHS
capital to revenue to fund an element of the total discretionary
GMS provision. The sums are shown in Table 5.2.5.
4. From 2003-04 onwards the GMS element is fully met
from the Department's revenue stream following the introduction
of a further stage of Resource Allocation and Budgeting (RAB).
Table 5.2.5
TRANSFER OF HCHS CAPITAL FOR UNIFIED REVENUE ALLOCATIONS
FOR 1997-98 TO 2002-03
|
| Year | £ million
|
|
| 1997-98 | 25
|
| 1998-99 | 26
|
| 1999-2000 | 26
|
| 2000-01 | 27
|
| 2001-02 | 27
|
| 2002-03 | 28
|
|
5. In addition, £35 million of public funding has
been invested since 2002-03 in the most under doctored areas of
the country to improve nearly 500 practice premises to accommodate
600 new GP registrars. This supported the NHS Plan target of improving
3,000 GP practices.
5.2.6 Could the Department please update table 5.2.7,
providing a list of primary care premises which have signed or
in the process of signing up for the use of PFI, together with
their total capital cost, the length of contract, the annual unitary
charge and availability fee and FM fee. Where projects are bundled
with non-NHS facilities, could they also provide details of the
other income streams e.g. from commercial and retail, local authority.
[5.2.7]
ANSWER
1. As reported for the past three years, NHS LIFT is
the procurement route for the development of Primary Care Facilities.
2. PFI has only been used once to provide primary care
based facilities, at North Kirklees PCT. Details of this scheme
appear in the answer to question 5.3.3.
5.2.7 Could the Department please list all the LIFT
schemes currently under way, and their costs? [5.2.8]
ANSWER
1. The information requested in given in Table 5.2.7.
Table 5.2.7
NHS LIFT SCHEMES
|
| LIFT Scheme | Status
| Capital cost £m 1st tranche
| Capital cost £m 2nd tranche
| Buildings open to patients
|
|
| 1st Wave | |
| | |
| Barnsley | LIFTCO
| 13.12 | |
Goldthorpe—Dec 2004 |
| established
| | | Worsbrough—Dec 2004
|
| | |
| Thurnscoe—Dec 2004
|
| Camden & Islington | LIFTCO established
| 3.50 | |
Hanley Road—June 2005 |
| East London | LIFTCO established
| 29.19 | |
The Centre Manor Park—Sept 2004
|
| Manchester, Salford and Trafford | LIFTCO established
| 18.40 | 20.66
| |
| Newcastle and | LIFTCO
| | | |
| 13.40 |
| Brunton Park—March 2005
| |
| North Tyneside | established
| | | Shiremoor—March 2005
|
| | |
| Walker—June 2005
|
| Sandwell | LIFTCO established
| 7.40 | 2.40
| Birmingham Rd Health Centre—April 2005
|
| 2nd Wave | |
| | |
| Barking & Havering | LIFTCO
| 25.00 | |
Thamesview—April 2005 |
| established
| | | Broad Street—June 2005
|
| Birmingham & | LIFTCO
| 9.10 | |
Chemsley Wood—July 2005 |
| Solihull | established
| | | Woodgate Valley—July 2005
|
| Bradford | LIFTCO established
| 14.00 | |
|
| Cornwall & Isles of Scilly | LIFTCO established
| 3.46 | |
Liskeard Health Centre—June 2005
|
| Coventry | LIFTCO established
| 7.00 | |
|
| East Lancashire | LIFTCO
| 23.00 | 30.8
| Bacup—March 2005 |
| established
| | | Nelson—May 2005
|
| | |
| Darwen—June 2005
|
| Hull | LIFTCO established
| 6.55 | |
|
| Leicester | LIFTCO established
| 8.90 | 6.5
| |
| Liverpool | LIFTCO
| 10.64 | |
Ainsdale—June 2005 |
| established
| | | West Everton—July 2005
|
| Medway | LIFTCO established
| 18.20 | |
|
| North Staffordshire | LIFTCO established
| 7.50 | |
|
| Redbridge & Waltham Forest | LIFTCO established
| 15.06 | |
|
| 3rd Wave | |
| | |
| Ashton, Leigh & | LIFTCO
| 17.00 | 13.00
| Atherton—January 2005
|
| Wigan | established
| | | Lower Ince—May 2005
|
| | |
| Worsley Mesnes—June 2005
|
| Barnet, Enfield & Haringey | LIFTCO established
| 13.60 | |
|
| Brent & Harrow | LIFTCO established
| 17.50 | |
|
| Bristol | LIFTCO established
| 15.9 | |
|
| Bromley, Bexley & Greenwich | LIFTCO established
| 25.30 | 3.40
| |
| Colchester & Tendring | LIFTCO established
| 35.80 | |
|
| Derby | LIFTCO established
| 16.80 | |
|
| Doncaster | Preferred Bidder
| 0.0 | |
|
| Dudley | Preferred Bidder
| 0.0 | |
|
| Ealing, Hammersmith & Hounslow | LIFTCO established
| 28.60 | |
|
| East Hampshire, Fareham & Gosport | LIFTCO established
| 7.80 | |
|
| Greater Notts | LIFTCO established
| 33.50 | |
|
| Lambeth, Southwark & Lewisham | Preferred Bidder
| 0.0 | |
|
| Leeds | LIFTCO established
| 18.10 | |
|
| Norfolk | LIFTCO established
| 3.98 | |
Plowright Medical Centre, Swaffham—May 2005
|
| North Notts | Preferred Bidder
| 0.0 | |
|
| Oldham | LIFTCO established
| 2.52 | |
|
| Oxford | LIFTCO established
| 16.00 | |
|
| Plymouth | LIFTCO established
| 14.60 | |
|
| Sheffield | Preferred Bidder
| 0.0 | |
|
| South West London | LIFTCO established
| 18.48 | |
|
| St Helens, Knowsley and Warrington | LIFTCO established
| 12.30 | |
|
| Tees | LIFTCO established
| 7.00 | |
|
| Wolverhampton | LIFTCO established
| 8.00 | |
|
| 4th Wave | |
| | |
| Bolton, Rochdale, Heywood and Middleton |
Pre OJEU | 0.00
| | |
| Bury, Glossop and Tameside | Pre OJEU
| 0.00 | |
|
| Southend, Castle Point and Rochford | Pre OJEU
| 0.00 | |
|
| South East Midlands | Pre OJEU
| 0.00 | |
|
| South Midlands | Pre OJEU
| 0.00 | |
|
| South West Hampshire | Pre OJEU
| 0.00 | |
|
| Sustainable Communities in Kent | Pre OJEU
| 0.00 | |
|
| Wiltshire | OJEU
| 0.00 | |
|
|
| Total | | 546.20
| 76.76 |
|
|
| Notes: | |
| 1. | The above table reflects the position as of end of July 2005. Capital costs have been calculated using the following definition:
|
| 2. | "Capital cost includes the costs of land, construction, equipment and professional fees but excludes VAT, rolled up interest and financing costs such as bank arrangement fees, bank due diligence fees, banks' lawyers fees and third party equity costs."
|
| |
5.3 Long Term Capital Projects and PFI
5.3.1 Could the Department provide please update table
5.3.1, showing all publicly funded capital projects with a total
cost above £10 million which are under construction during
2004-05? Could this also show the original and current estimated
completion dates along with a percentage figure for any additional
time overrun/saving? Likewise, the original total cost and current
estimated out-turn cost should be provided along with a percentage
cost performance figure. [5.3.1]
ANSWER
1. The information requested is no longer available.
5.3.2 Could the Department provide a commentary on
cases where there are significant discrepancies between original
estimates of completion dates and/or expenditures and current
estimates? [5.3.2]
ANSWER
1. The information requested is no longer available.
5.3.3 Could the Department provide an update of Tables
5.3.3? [5.3.3]
ANSWER
1. The information requested is given in Tables 5.3.3(a)
to (e).
2. The NHS Bank took over responsibility from DH for
providing transitional revenue support to a number of the earlier
PFI schemes for 2004-05. In April 2005 the NHS Bank approved the
policy for 2005-06 and future years for these existing and future
schemes, which is set out below.
3. The existing transitional support for the earlier
schemes will still be phased out. However, to prevent sharp and
in some instances material cut-offs of income, it was agreed that
the support mechanisms would be phased out over a longer period.
All existing central revenue support schemes for PFI are now to
have ceased by the end of 2007-08.
4. All new PFI schemes are now subject to the same accounting
rules and from 2005-06 (and particularly 2006-07) Payment by Results
(PbR) will increasingly standardise the income that all providers
receive for their operations.
5. From 2005-06, a system of revenue support will apply
evenly to all new major schemes—both PFI and publicly funded—coming
on stream and with transitional arrangements applying to all schemes
that came on stream in the five years up to and including 2005-06.
The key elements are:
— all schemes in excess of £25 million (whether
public capital or PFI) will receive a revenue payment from the
NHS Bank of 2.5% of their capital cost in their first year of
operation;
— this will become 2% in the 2nd year of operation
and decline a further 0.5% in each subsequent year until it ceases
after the 5th year; and
— this makes 7.5% of capital cost in total for the
life of the project. This total is fixed, but the NHS Bank will
offer some flexibility over draw-down.
6. In addition, the NHS Bank will provide a contribution
to PFI project costs (eg external advisers) equal to 2% of total
scheme value, also commencing in 2005-06.
7. The principle behind the new system is recognition
of the fact that all capital investment projects, whether PFI
or publicly funded, bring additional revenue costs. These reflect
new building stock, higher quality services and decanting and
commissioning costs. The progressive phasing out of support reflects
the fact that there will improved operating synergies and increased
patient through-put resulting from the new, superior facilities
in the longer term.
8. We are not aware of any local arrangements to help
provide revenue support to PFI schemes but we are not asking the
NHS to collect this information.
| 
