Full Business Case. Full Business Case. County Hospital Ward Refurbishment Works

Transcription

1 Full Business Case Cunty Hspital Ward Refurbishment Wrks Octber

2 Glssary Dcument Cntrl Versin Date Issued Brief Summary f Change 1 22 Jul 15 Initial Draft AG 2 1 Sept 15 Initial Draft amended fr cmments n OBC by TDA 3 30 Sept Cmments fllwing prject team review 4 5 Octber Octber Octber st Octber Octber 15 Amendments frm EA Inclusin f additinal infrmatin Inclusin f additinal infrmatin and appendices Final versin fr CPB apprval Financial tables updated Final amendments Owner s Name HD HD HD HD HD KF HD 2

3 Glssary Cntents Glssary f Terms and Abbreviatins 6 1 Executive Summary Intrductin & Backgrund Cmmissiner and Stakehlder Supprt Capital Prgramme Case f Need Optin Appraisal Summary f FBC Scheme Capital Cst summary Financial Case Management Case Timescales UHNM Trust apprval Recmmendatins 15 2 Strategic Backgrund Intrductin & Backgrund University Hspitals f Nrth Midlands NHS Trust Strategic Case fr Change Capital Prgramme Investment Objectives Trust Objectives met thrugh Ward Refurbishment & Recnfiguratin Capacity Strategy Need fr Ward Recnfiguratin & Upgrade Clinical functinal suitability Ward Efficiency Risk f Ding Nthing Estates Strategy and DCP Trust Bard Supprt & Apprval Cmmissiner & Stakehlder Supprt Equality and Diversity 30 3 Ecnmic Case Optin Appraisal Generating Optins Lng List 31 3

4 Glssary 3.3 Shrt Listed Optins Criteria Rank Weighting and Scring Scring Criteria Scring Results Sensitivity analysis Cnclusin f Optin Appraisal Ecnmic Appraisal Capital csts Summary f Ecnmic Appraisal Cnclusin 40 4 Technical Slutin Summary f FBC scheme Detailed descriptin f wrks Design Develpment Prcess Single Rm cnfiguratin BREEAM Dergatins against standards Fire Cmpliance Cntrl f Infectin Windw Replacement Capital Cst Summary Equipment and IM&T 49 5 Cmmercial Case Prcurement Rute Cntract Structure Risk Allcatin Matrix Facilities Management Prvisin Wrkfrce Planning 51 6 Financial Case Intrductin Key Features f the Business Case Trust Financial Psitin UHNM Incme and Expenditure Impact n balance sheet Cash flws 54 4

5 Glssary 6.7 Cnclusin 54 7 Management Case Prgramme Prject Management Structure Capital Prgramme Bard Outline f Change Cntrl Risk Management Benefits Realisatin Plan Pst Prject Evaluatin 62 8 Cnclusin and Recmmendatin Cnclusin Recmmendatins 64 9 Appendices Due Diligence Reprt Recmmendatins OBC Optin Appraisal Wrkshp Reprt FB frms fr all ptins Csted Risk register User Grup Briefing dcuments Detailed Schedule f Dergatins BREEAM Assessment Fire Office sign ff Ward plans Detailed Prgramme Benefits Realisatin Plan UHNM Trust Bard Apprval 65 5

6 Glssary Glssary f Terms and Abbreviatins Abbreviatin Full term ABC CCG CH CQC CSF DCF DDA DH EAC FBC FM GMP HBN HMT HSE HTM / N I&E IHSS IM&T JV LTB LTFM MRI MSFT NPV NHS TDA Acquisitin Business Case Clinical Cmmissining Grup Cunty Hspital Care Quality Cmmissin Critical Success Factr Discunted Cash Flw Disability Discriminatin Act Department f Health Equivalent Annual Cst Full Business Case Facilities Management Guaranteed Maximum Price Health Building Nte Her Majesty s Treasury Health and Safety Executive Health Technical Memrandum / Nte Incme and Expenditure Integrating Health Services fr Staffrdshire Infrmatin Management and Technlgy Jint Venture Lcal Transitin Bard Lng Term Financial Mdel Magnetic Resnance Imaging Mid Staffrdshire NHS Fundatin Trust Net Present Value NHS Trust Develpment Authrity 6

7 Glssary Abbreviatin Full term OBC OGC Outline Business Case Office f Gvernment Cmmerce P21+ Prcure 21+ PER Prject Evaluatin Review PFI /PFI2 Prject Finance Initiative / Prject Finance Initiative 2 PLACE PMO PPP PSCP RIBA RSUH RWT SFI SGH SSB UHNM TSAs UHNS VAT Patient Led Assessments f the Care Envirnment Prject Management Office Public Private Partnership Principal Supply Chain Partner Ryal Institute f British Architects Ryal Stke University Hspital Ryal Wlverhamptn NHS Trust Standing Financial Instructins Staffrd General Hspital Sustaining Services Bard University Hspitals f Nrth Midlands NHS Trust Trust Special Administratrs University Hspitals f Nrth Staffrdshire NHS Trust Value Added Tax 7

8 1 Executive Summary 1.1 Intrductin & Backgrund The purpse f this Full Business Case (FBC) is t cnfirm the case set ut in the Outline Business Case (OBC) apprved by the University f Nrth Midlands Hspital NHS Trust Bard in June 2015 and subsequently submitted t the Trust Develpment Agency (TDA) fr apprval. It affirms the case f need and the ptins appraisal prcess undertaken t test and cnfirm the preferred ptin identified in the Acquisitin Business Case (ABC) fr the prvisin f ward accmmdatin at the Cunty Hspital. In February 2014 the Secretary f State apprved the Trust Special Administratrs (TSA) recmmendatins fr the future f Mid Staffrdshire Fundatin Trust (MSFT). This recmmended that University Hspital Nrth Staffrdshire NHS Trust (UHNS) assumed respnsibility fr the staff, assets and services delivered at the frmer Staffrd General Hspital. The entity f MSFT was t be disslved. In July 2014 the Bard apprved the ABC fr Cunty Hspital. A revised addendum t this was subsequently apprved by the Trust Develpment Authrity (TDA) in Nvember The ABC prpsed that UHNS acquired the services and facilities frm MSFT. The acquisitin was t be undertaken n the basis that the TSAs clinical mdel set ut in the TSAs reprt dated December 2013 wuld be implemented. The University Hspital f Nrth Staffrdshire NHS Trust acquired the respnsibility fr the delivery f a number f clinical services at Mid Staffrdshire Fundatin Trust fr a perid f 29 mnths frm 1 Nvember The tw Trusts cmbined t frm the University Hspitals f Nrth Midlands NHS Trust (UHNM). In July 2015 the UHNM Trust prepared and apprved an OBC which set ut the need fr addressing the bed capacity at Cunty Hspital t supprt the implementatin f the mdel f care apprved by the Secretary f State in February This FBC cnfirms the requirement fr 14.94m f the 15m capital identified in the Capital Allcatin Prgramme and 6.99m revenue per annum, at steady state 2017/18, as set ut in the ABC. The case addresses the cmments raised by the TDA in July 2015 as part f the OBC apprval. As agreed with the TDA, t enable the Trust t achieve the clinical mdel defined within the ABC the Trust has prceeded at risk n Phase 1 f the ward refurbishment. The OBC cnfirmed cmpletin f the ward upgrade by March The FBC reverts t the riginal ABC timescale and cnfirms cmpletin f Nvember 2017.This is due t the cmplexity within the decant prcess and, at each phase, t handback ward areas int clinical use prir t cmmencing the next phase. In additin it is recgnised that t achieve the target timescale, the usual FBC apprval prcesses will be fast. 1.2 Cmmissiner and Stakehlder Supprt The standard prcess fr the develpment f a large capital investment f this nature wuld be fr the Trust t develp a prgramme setting ut ptins that wuld be cnsulted n widely with a range f stakehlders. In this instance the principles underlying the need fr significant investment were tested by the TSAs prcess. The TSAs mdel f care was widely cnsulted upn with Cmmissiners, Staff, Patients and Regulatrs. Cmmissiners cnfirmed their supprt fr the TSAs mdel f care. Details f this prcess are set ut in the ABC, Sectin 2. 8

9 1.3 Capital Prgramme The acquisitin f services and facilities frm MSFT required changes t be made t the estate at bth the Cunty Hspital site and the Ryal Stke University Hspital (RSUH) site, t enable UHNM t meet regulatry and cmmissiner requirements and t deliver the benefit and synergies identified in the ABC. The Capital Business Case (July 2014) frmed an appendix t the ABC and identified the capital funding required t supprt the implementatin f the preferred ptin in the ABC. The Business Case identified a number f investment prjects at each site t ensure that: Each f the sites can deliver the ptimal slutin. The verarching capital investment prgramme, as a whle, achieves the desired utcmes set ut in the ABC. The ABC cnfirmed the ttal capital allcatin f 83.2m wuld be applied fr via a number f separate business cases, enabling individual elements t be finalised whilst ensuring that the capital prgramme can be cmpleted within the agreed timescale. It is imprtant t recgnise that each f these business cases is a subset f the ttal funding slutin. In additin t the 83.2m prvided by the TDA the Trust is cntributing 16.6m f internally generated capital frm the Cunty Hspital and IHSS depreciatin twards the wrks required t cnfigure bth hspital sites. 1.4 Case f Need The Reprt f the Mid Staffrdshire NHS Fundatin Trust Public Inquiry (Francis, 2013), Alberti review f the prcedures fr emergency admissins and treatment (2008) and subsequent due diligence reprt (EC Harris, 2014) that has been undertaken prir t acquisitin identified a number f significant weaknesses, issues and risks assciated with the wards at Cunty Hspital. In particular a number f key issues were identified fr the ward areas that meant these areas fell far belw the current acceptable standards t supprt high quality nursing care. Lack f side rm prvisin at Cunty/infectin cntrl. Ward layut. Currently 14% f beds have assciated en-suite tilets, which presents difficulty in islating patients. The Francis reprt identified sme elderly care wards nt having side rms and that this chrt f patients is susceptible t infectin and frequently require nursing in single rms. Wards 11&12 were particularly identified by Francis as having a lack f islatin/ chrt facilities fllwing repeated c-diff utbreaks (Francis, 2013). The Alberti reprt particularly identified that the physical layut n the wards as unsatisfactry, particularly n ward 10, which was mstly ccupied by elderly patients (Alberti, 2008). Lss f efficiency thrugh c-lcatin f specialities and als clinical adjacencies fr efficient use f equipment (Francis Reprt, 2013). The impact f crazy ward design fr nursing (Francis Reprt, 2013). Nursing, medical and clinical efficiency is reduced due t small ward sizes (7-23 beds). 9

10 The Due Diligence review cmpleted at acquisitin identified the fllwing issues with the ward areas. These have als been raised thrugh a PLACE audit Single sex access t tilets Lack f privacy fr bath/shwer rms t crridrs Lack f day rms Lack f private rms n wards fr patient/relative cnversatins In terms f Health Building Nte (HBN) standards the wards are nn-cmpliant in terms f; space infectin cntrl privacy and dignity single sex prvisin single rm prvisin Dirty utility prvisin des nt meet natinal standards including wards sharing dirty utilities The Trust has wrked t establish the facilities that will be required at Cunty Hspital in rder t address the issues and t safely implement the TSAs' mdel f care. Initial plans have been drawn up t cnsider hw the existing space culd best be cnfigured and refurbished t supprt the mdel and t address the risks identified by the due diligence prcess. The key drivers t this FBC are t maximise the ability t: prvide single sex accmmdatin meeting guidance meet cntrl f infectin best practice prvide integrated care pathways acrss the Cunty Hspital & Ryal Stke prvide adequate strage prvide dirty utilities and washing facilities prvide a dementia friendly envirnment imprve staffing efficiency and recruitment ensure cmpliance with Fire HTMs address backlg maintenance Imprving the current infrastructure and estate f the Cunty Hspital is essential, nt nly t prevent risks t patient and staff safety but als t enable staff t have the tls t undertake their rles effectively. 10

11 1.5 Optin Appraisal The ptin appraisal determined that the preferred ptin fr the delivery f the prject bjectives is the Ward Refurbishment Optin with temprary decant facilities. On a cst-benefit basis this ptin scred nly marginally higher than the ptin f refurbishment withut the decant facilities (6%). The ptin with decant facilities requires an additinal 1.97m additinal nn-recurring revenue funding and althugh it wuld bring cmpletin f the wrks frward t April 2017, in line with the riginal timescale in the ABC, it generates n additinal recurring revenue benefits. It has therefre been determined that, with the cnstraints in revenue and capital funding, the preferred ptin is actually refurbishment withut decant facilities. The preferred ptin has been selected n the basis that it will: Enable delivery f the TSA clinical mdel Realise the required benefits Achieve the identified investment bjectives Addresses the case f need t supprt the upgrading f wards at Cunty Hspital, including addressing the key failings and risks f the current facilities 1.6 Summary f FBC Scheme This FBC is fr the wrks t refurbish the wards at Cunty Hspital. A summary f the key elements f wrk t be undertaken as part f this scheme are set ut belw. Table 1 Capital scheme summary Scheme Summary f wrks Refurbishment f Wards Refurbish existing ward areas, addressing infectin cntrl issues and increasing prprtin f single bed bays, resulting in the prvisin f 3 x 28 bed ward 1 x 29 bed ward 1 31 bed ward Prvisin f new mechanical and electrical services 11

12 1.7 Capital Cst summary The capital cst f the prpsed wrks has been prepared by the prject quantity surveyr and is currently in line with the 15m allcated in the Capital Prgramme. Table 2 Capital cst summary Summary Cst Excluding VAT VAT Cst Including VAT 1 Departmental Csts (frm Frm FB2) 11,054,921 1,754,551 12,809,472 2 On-Csts (frm Frm FB3) (2% f Departmental Csts) 1% 152,000 24, ,320 3 Wrks Cst Ttal (1+2) at BIS PUBSEC??? 11,206,921 1,778,871 12,985,792 4 Prvisinal Lcatin Adjustment () (b) 0% 5 Sub-ttal (3+4) 11,206,921 1,778,871 12,985,792 6 Trust Fees (c) (4% f sub-ttal 5) 4% 890,791 (d) 890,791 7 Nn-Wrks Csts (frm Frm FB4) (e) Land Other Equipment Csts (frm Frm FB2) 0% 52,344 10,469 62,813 9 Planning Cntingency 4% 423,042 84, , TOTAL (fr apprval purpses) 12,573,098 1,873,948 14,447, Optimism Bias - Cmbined Separate line in SBC 0.0% Sub-ttal 12,573,098 1,873,948 14,447, Inflatin Adjustment t prjected Tender Dates 0.0% 427,426 68, , Frecast Final Business Case Ttal 13,000,524 1,942,336 14,942,860 This capital cst fr the preferred ptin is based n a firm GMP prvided by Kier by the Trust s Prcure 21+ partner. 1.8 Financial Case This FBC identifies: 1. The capital expenditure f 14.94m funding requirement set ut in the abve FB Frm remains in line with the 15m prgramme capital cst as set ut in the addendum t the ABC. 2. Revenue expenditure funding requirement f 7m revenue per annum at steady state 2017/18, as set ut in the ABC. a. These csts exclude revenue assciated with any step dwn prvisin, as this was assumed in the ABC t be a transfer f revenue frm Ryal t Cunty. If the step dwn prvisin des nt result in beds being clsed at Ryal, a separate business case will be required. 12

13 b. The ABC prpsed t refurbish 5 ward areas (5 x 24 beds), prviding a ttal f 120 beds. As the detailed design has prgressed the capital case prpses t prvide 144 beds. A separate business case will be required t supprt any uplift in revenue ver and abve the ABC fr these beds. The implicatins f the prpsed investment have been cnsidered and reflected in the Trust s Lng Term Financial Mdel (LTFM). The LTFM demnstrates the affrdability f the prpsed develpment. 1.9 Management Case Delivery f the verall capital prgramme will be gverned by the Trust s Capital Investment Grup t ensure the effective management f the prgramme. Reprting t the Trust IHSS Capital Prgramme Bard will prvide the essential versight f prgramme delivery, csts, benefits, risks and dependencies Timescales The key milestne perids relating t this scheme are set ut belw. In rder fr the Trust t achieve the earliest pssible peratinal date, the Trust began wrk n the first phase f the ward refurbishment prgramme at risk in August 2015 pre the apprval f the OBC by the TDA. Table 3 Key Timescales Element Milestne cmpletin Date OBC Trust Bard apprval July 2015 OBC TDA apprval Octber 2015 FBC Develpment & Trust Apprvals Octber 2015 TDA apprval perid Nvember 2015 Cnstructin Perid (phased) August 2015 Octber 2017 Cmmissining (final phase) Nvember 2017 Operatinal (final phase) Nvember 2017 In the OBC the timescale fr delivering the ward refurbishment prgramme was April Fllwing a detailed review f the phasing f the necessary wrks it is evident that this timescale cannt be met withut the additinal funding fr the decant facilities. The prgramme f wrks has reverted t that cntained within the ABC and is nw due t cmplete in Nvember UHNM Trust apprval The apprving bdies are frmally asked t cnsider and supprt the preferred ptin set ut in this FBC and apprve the Trust prceeding t the preparatin f a Full Business Case. All capital business cases needed t deliver the prpsals in the Acquisitin Business Case and the subsequent Addendum require frmal apprval frm the apprpriate bdy f the Trust. T be cnsidered fr apprval this business case needs t demnstrate that it meet 5 tests as fllws: 13

14 T be part f the Acquisitin Business Case The refurbishment f the wards was identified in the Capital Appendix f the ABC as a pririty scheme. T be cvered by the capital allcatin The capital cst f the scheme was riginally set at 15m as identified in the Capital Appendix f the ABC. The final cst f the prject is 14.94m, s within the agreed budget as set ut in the ABC. Capital is t be funded by the Trust Develpment Agency (TDA). T be included within the revenue allcatin identified within the IHSS ABC, r t have the revenue implicatins apprved frm ther surces. Revenue csts and surces, within the cntext f the IHSS ABC are summarised as fllws: Steady state revenue csts fr pay & nn pay within the ABC fr wards are 7m which is funded frm 6.4m identified within the divisinal revenue wrkbk and 0.6m transitinal revenue supprt. These csts exclude revenue csts assciated with any step dwn prvisin, as this was assumed t be a transfer f revenue frm Ryal t Cunty. If the step dwn prvisin des nt result in beds being clsed at Ryal, a separate business case will be required. The ABC prpsed t refurbish 5 ward areas f 24 beds. As the detailed design has prgressed the physical ward area enables this capital case prpses t prvide 5 ward areas with 28 beds minimum which in turn supprts peratinal flw thrugh a reductin in Occupancy rates. There are n additinal activity r revenue cnsequences as a result f these additinal beds. T deliver the functinal benefits envisaged including quality and safety. This case aims t reslve quality and safety issues identified within the Francis Inquiry reprts (2013) and the Alberti review f prcedures and admissins fr emergency treatment (2008). In additin the refurbishment will reslve ward envirnmental issues identified within the Due Diligence reprt cmpleted as part f the ABC. The prject will deliver the fllwing functinal bjectives and benefits: meet privacy and dignity requirements meet cntrl f infectin best practice Increase the number f single rms at Cunty frm 14% acrss the site t 43% within the refurbished areas prvide integrated care pathways acrss the Cunty Hspital & RSUH prvide adequate strage f drugs and equipment prvide dirty utilities and washing facilities prvide a dementia friendly envirnment Imprved envirnment t deliver service, resulting in greater clinical efficiency and effectiveness fr clinical and nursing staff imprve staffing efficiency and recruitment address backlg maintenance and issues with statutry cmpliance (e.g. Fire) T be in keeping with the Trust s 2025 Visin 14

15 The ward refurbishment prgramme is identified within the 2015/2016 annual plan, which highlights the need fr tw wards t be refurbished in 2015/16 tw in 2016/17, with cmpletin f the final ward in 17/ Recmmendatins The purpse f this FBC dcument is t cnfirm the case set ut in the OBC addressing the strategic and clinical ward case f need, nn-financial and financial appraisal f the ptins resulting in a preferred ptin f Refurbishment f the Inpatient Wards. The capital cst f the preferred ptin is cnfirmed at 14.94m, in line with the OBC and within the Capital Prgramme budget cst identified in the addendum t the ABC at 15m. The revenue csts f 6.99m are identified within the ABC. The Cmmittee is recmmended t apprve this Full Business Case n the grunds it meets the 5 tests as set ut in IHSS Capital Expenditure Reprt 1. 1 IHSS Capital Expenditure Reprt t UHNM Trust Bard - June