Select Committee on Health Memoranda

Table 5.4.13(a)

SchemeTotal No. of beds provided before new facility Total No. of beds as proposed in the OBC Total No. of beds provided by PFI solution
Gloucestershire HospitalsSurgery 221Surgery216 Surgery216
Medicine371 Medicine389Medicine 389
Total G&A Beds597 Total G&A Beds612 Total G&A Beds612
Children's/SCB53 Children's/SCB64Children's/SCB 64
Day Case45 Day Case54Day Case 56
Total Other Beds98 Total Other Beds118Total Other Beds 120
Total Beds695 Total Beds730Total Beds 732
Nuffield Orthopaedic CentreTotal G&A Beds 144Total G&A Beds 144Total G&A Beds144
Other Types6 Other Types6Other Types 16
Total Beds150 Total Beds150Total Beds 160
Totals845 880 892

Table 5.4.13(b)
SchemeTotal No. beds at present Total beds OBC Total beds PFI
Southern DerbyshireTotal G&A Beds 1,215Total G&A Beds 1,129Total G&A Beds1,129
T&O Recovery14 Community53Community 53
Intermediate Care 90Intermediate Care90
Total Beds1,229 Total Beds1,272Total Beds 1,272
BlackburnAdult Medical 221Adult Medical234 Adult Medical238
Surgery223 Surgery217Surgery 252
Paediatric52 Paediatric43Paediatric 43
Medical Rehab73 Medical Rehab73Medical Rehab 73
Total G&A Beds569 Total G&A Beds567 Total G&A Beds606
Maternity66 Maternity66Maternity 66
Mental Health76 Mental Health76Mental Health 76
Day Case54 Day Case64Day Case 78
Total Beds765 Total Beds773Total Beds 826
Oxford Radcliffe (3rd Wave)Paediatric Medicine & Surgery 96Paediatric Medicine & Surgery 106Paediatric Medicine & Surgery 106
Neurology28 Neurology32Neurology 33
Neurosurgery & Neurology 46Neurosurgery & Neurology 57Neurosurgery & Neurology 57
Ophthalmology16 Ophthalmology15Ophthalmology 15
Plastic18 Plastic21Plastic 19
Total G&A Beds230 Total G&A Beds251 Total G&A Beds248
Day beds15 Day beds17Day beds 28
Total Beds254 Total Beds285Total Beds 293
Leeds Teaching HospitalsOncology 95Oncology142 Oncology142
Surgery88 Surgery96Surgery 96
Clinical Haematology30 Clinical Haematology40 Clinical Haematology40
Private Patients 10Private Patients10
Young Adults 10Young Adults10
Critical Care 16Critical Care16
Total G&A Beds213 Total G&A Beds314 Total G&A Beds314
Day Case: Day Case:Day Case:
Oncology32 Oncology52Oncology 52
Clinical Haematology32 Clinical Haematology44 Clinical Haematology44
Total Beds277 Total Beds410Total Beds 410
Newcastle-upon-TyneCategories of G&A 1,582Categories of G&A 1,582Categories of G&A 1,661
Total G&A Beds1,582 Total G&A Beds1,582 Total G&A Beds1,661
Other Types133 Other Types133Other Types 153
Day Case90 Day Case90Day Case 108
Total Beds1,805 Total Beds1,805Total Beds 1,922
Central ManchesterTotal G&A Beds 1,254Total G&A Beds 1,244Total G&A Beds1,386
Daycase139 Daycase172Daycase 197
Total Beds1,393 Total Beds1,416Total Beds 1,583
Coventry and Warwickshire
(Walsgrave)Total G&A Beds 899Total G&A Beds 829Total G&A Beds916
Maternity80 Maternity65Maternity 68
Critical Care81 Critical Care77Critical Care 91
Day Case63 Day Case66Day Case 56
Renal Dialysis29 Renal Dialysis30Renal Dialysis 30
Total Beds1,152 Total Beds -In the scheme1,067 Total Beds -In the scheme1,161
Off site intermediate care 0Off site intermediate care 95Off site intermediate care 95
Total Beds1,152 Total Beds1,162Total Beds 1,256
Barking, Havering and RedbridgeCategories of G&A Categories of G&A Categories of G&A
Medical 381 Critical Care94Critical Care 124
Surgery281 Emergency390Emergency 420
Paediatric22 Paediatric30Paediatric 30
Elective 90Elective90
Total G&A Beds684 Total G&A Beds604 Total G&A Beds664
Maternity82 Maternity107Maternity 107
Day Case83 Day Case 88Day Case 88
Total Beds849 Total Beds799Total Beds 859
TOTALS7,724 7,922 8,421

Table 5.4.13(c)

TrustPrevious No. of
In-Patient Beds
No. of In-Patient Beds
in Completed Scheme
Royal Berks & Battle
Adult Medicine194196
Elderly care85138
Oncology/Haematology24 40
General Surgery/Urology115 112
Head & Neck2622
Trauma & Orhopaedics100 106
Total725 806

5.4  Long Term Capital Projects and PFI

  5.4.14  For each PFI scheme could the Department provide the estimates of the unitary fee and split between the availability and facilities management fee at outline business case (baseline year) and the actual cost of the unitary fee split as above on signing off the FBC? Could the Department comment on how any increases were funded? [4.8j]

  1.  Please refer to the answer provided for question 5.4.6

5.4  Long Term Capital Projects and PFI

  5.4.15  For each PFI scheme signed or given approval in principle, could the Department provide income and capital charges of Trusts which make up each PFI scheme prior to signing and income, availability fee and capital charges on retained estate for each scheme having signed, or estimates for those schemes which have not yet signed? [4.8k]

  1.  The tables below shows all NHS trusts with a PFI scheme above £10 million that has reached Financial Close.

  2.  Column A shows the income, depreciation and PDC Dividends shown in the audited annual accounts for 2000-01.

  3.  The depreciation, PDC dividends and unitary payment expected to be charged to the income and expenditure account in the first full year in which the PFI scheme is operational.

  4.  Information has not been provided on schemes that are yet to reach financial close. There are only broad indications of the likely level of the unitary payment. PDC dividends have been used as a proxy for the 6 per cent return.

Northern & Yorkshire RO

Pre PFI £000s Source—Audited accounts for 2000-01 Post PFI-Dryburn £000s First year in which scheme is fully operational Post PFI C-L-S £000s First year in which scheme is fully operational
North Durham Health Care—Chester-le-Street Income100,140114,250 121,850
PFI 11,06113,282
Depreciation4,715 2,5003,682
PDC Dividends1,691 2,1112,321

  Note: The first PFI scheme that becomes operational is the Durham DGH which has been reported on before the Trusts merged in April 1998 and the Chester-le-Street scheme reached financial close in May 2002.

Trent, Eastern, London and North West RO's

  5.  No new schemes to add.

South East RO

Pre PFI £000s Source—Audited accounts for 1999-2000 Post PFI £000s First year in which scheme is fully operational

Newbury PCT*
Income     n/a72,000
PFI  n/a   2,639
Depreciation  n/a      400
PDC Dividends  n/a   n/a
Nuffield Orthopaedic CentreIncome 49,46850,248
PFI         0   5,212
Depreciation  1,418   1,045
PDC Dividends  2,445   1,824

  * Newbury PCT established on 1 April 2001

South West RO
Pre PFI £000s Source—Audited accounts for 1999-2000 Post PFI £000s First year in which scheme is fully operational
Gloucestershire RoyalIncome 93,182102,104
PFI 3,299
Depreciation3,244 3,258
PDC Dividends3,680 3,390
Mid Devon PCTIncome
PFIsee note
PDC Dividends

  The PCT was established in April 2001 and so does not have this data.

West Midlands RO

Pre PFI £000s Source—Audited accounts for 1999-2000 Post PFI £000s First year in which scheme is fully operational
Royal Wolverhampton HospitalsIncome 119,254150,873
PFI 2,588
Depreciation5,160 6,894
PDC Dividends6,331 8,976

5.4  Long Term Capital Projects and PFI

  5.4.16  What sums of money have been raised by PFI consortia from selling off NHS assets such as medical equipment and furniture that were handed over to them when they took over responsibility for hospital buildings and equipment? Were these sums taken into account during negotiation of the contract, and in the costings of options presented in the Full Business Cases so far approved for major PFI schemes?

  1.  NHS assets which may be transferred to Project Co in PFI deals are primarily land and equipment, which may include medical equipment (furniture is difficult to separately identify and is rarely included due to its relatively small value; we did not therefore ask Trusts about this category). Information on land and medical equipment is therefore provided in the tables below. We have collected information from the 12 major PFI schemes in England which are operational.


  2.  Surplus land is included in PFI schemes to reduce project finance costs and therefore the unitary payment paid to the private sector partner. Where a reduction in future payments forms the benefit, the net present value of the reduction in the value of the annual service payments must be greater than or equal to the Open Market Value (OMV) of the asset as valued by the District Valuer. NHS Trusts also need to consider whether overage arrangements are necessary. The affordability of the scheme, for the purposes of FBC approval, should be based on the minimum underwritten value of the land.

  3.  In the Value for Money (VFM) analysis for the Public Sector Comparator (PSC), land is included as a negative cost in the year it is to be sold. For the PFI option, as long as the present value of the unitary charge reduction as a result of land being included in the deal is greater than the present cost of the land being sold then VFM is achieved.

TrustValue of Land involved in PFI contract (£m)

Overage Arrangements Additional income realised from surplus Land
DARTFORD22 The Trust sold the West Hill site to ASDA as part of the PFI; proceeds for the benefit of the PFI project were £2.5m. This was based on residential use; if ASDA obtained planning permission for a new supermarket then the Trust could receive extra proceeds. The Trust is still in contact with ASDA but as yet no formal application has been made by them to Dartford Borough Council. The timing of the planning applications is a matter for ASDA.
CARLISLENo Land involved
SOUTH BUCKS4 Agreement provides for guaranteed contribution from sale of surplus sites with 50:50 share on any increases in value.
NORFOLK & NORWICHNo Land involved
NORTH DURHAM3 Agreement provides for additional benefits to the Trust should planning permission for the site be obtained. Project to have proposals for private housing but have not yet obtained planning permission.
GREENWICH13 Agreement provides for guaranteed contribution from sale of surplus sites with 50:50 share of any increase in value. The capital contribution agreed for the contract was £13.2m. Project Co in fact sold the surplus land for a total of £12.74m.
CALDERDALENo Land involved
BARNET & CHASE FARM (Wellhouse)8 Land has been sold but Trust is not aware what the actual proceeds were.
WORCESTER ROYAL4 Overage positions should planning gain be made within eight years. Property developer has proposals for the residential and commercial use but planning permission not yet obtained.
SOUTH DURHAM (Bishop Auckland)0.345 Where the consideration paid by the third party exceeds the base figure, the Trust will receive a sum equal to 50 per cent of the excess. The surplus Land is to be used for private housing; planning permission has not yet been obtained.

Medical Equipment

  4.  Existing Medical Equipment transferred to Project Co is treated in two ways in a PFI scheme:

    (i)  Equipment which is transferred to Project Co. but which is not ascribed a value under the contract and is treated as a disposal and written off; and

    (ii)  Equipment which is ascribed a contract value on the same basis as land (ie reduction in the unitary payments paid to Project Co.) and treated as a deferred asset (also like Land).

  5.  Information from the 12 operational Trusts shows:

TrustMedical Equipment Transferred
DARTFORDNo Medical Equipment transferred to Project Co.
CARLISLENo Medical Equipment transferred to Project Co.
SOUTH BUCKSNo Medical Equipment transferred to Project Co.
NORFOLK & NORWICHNo Medical Equipment transferred to Project Co.
NORTH DURHAMNo Medical Equipment transferred to Project Co.
GREENWICHNo Medical Equipment transferred to Project Co.
CALDERDALENo Medical Equipment transferred to Project Co.
SOUTH MANCHESTERNo Medical Equipment transferred to Project Co.
BARNET & CHASE FARM (Wellhouse)Medical, office and other equipment worth £3.5m was transferred to Project Co in return for reduced unitary payments; none of the items have been sold.
WORCESTER ROYALMedical and office equipment transferred to Project Co for book value of £1.4 million in return for reduced unitary payment. Residual equipment transferred in consideration for earlier than planned replacements in the first three years of the contract; approximately £100,000 was raised at auction by Project Co. for this residual equipment.
HEREFORD HOSPITALSNo Medical Equipment transferred to Project Co.
SOUTH DURHAM (Bishop Auckland)No Medical Equipment transferred to Project Co.

5.4  Long Term Capital Projects and PFI

  5.4.17  Could the Department provide information on capital costs in the current year of PFI schemes which are actually completed such as the Norfolk and Norwich Hospital and the Worcestershire Royal Hospital, on a basis that allows comparison with capital costs in non-PFI hospitals. We would also like any preliminary information on bed numbers actually in use in these schemes and revenue costs per bed.

  1.  It is not easy to directly compare capital costs alone between PFI and conventionally funded hospitals because PFI proposals are structured and priced to deliver an integrated service, ie building for two or three years, maintaining the new facility for 30 years and in many cases providing ancillary support services for the same period. However, officials recently compiled a table which compared the most directly relevant revenue costs for the operational schemes at Worcester, North Durham and Carlisle to what the theoretical estimates for capital charges and other like-for-like costs would have been if these hospitals had been built from public funds. This was done for inclusion in a response to an article which appeared in the British Medical Journal in May this year (the full response is a letter of 19 June from Peter Coates, Branch Head, Private Finance and Investment Branch, which was published on the BMJ's website). This provides a helpful proxy guide for the relative costs of raising finance, construction costs and maintaining the finished building. The figures in the table are from the article itself—which uses a mixture of data submitted to the Health Select Committee last year—and theoretical figures and data collected by officials directly from the relevant Trusts specifically for this table.

  2.  The table is reproduced below.

Worcester N DurhamCarlisle

Annual cost if publicly funded (excluding depreciation and maintenance)
Depreciation1.11.1 1   
Maintenance1.92.1 2.8
Actual estimated public cost to Trust 9.89.6 9.7
Annual cost of PFI9.3 11.39   

  3.  Explanations of the rows are as follows:

    (i)  "Annual cost if publicly funded": figure from the BMJ article—theoretical calculation using a figure of 6 per cent of construction cost of new hospital plus capital charges on retained estate (from data submitted last year to the Health Select Committee by officials).

    (ii)  "Depreciation": this is a theoretical calculation by officials which must be included in any estimate of the "Annual cost if publicly funded"—it is the second element of the capital charges costs which was omitted from the table in the BMJ article. Straight line depreciation over 60 years is used. It is assumed equipment and retained estate costs are the same for both options.

    (iii)  "Maintenance": these figures were collected by officials directly from the relevant trusts—they are the costs associated with maintaining the fabric of the building (commonly referred to as "Hard FM"). Again, these were omitted from the calculation of "Annual cost if publicly funded" in the article in the BMJ: they must be included in a like-for-like comparison with the PFI availability charge, as the latter includes the cost of building maintenance.

    (iv)  "Annual cost of PFI": figure from the BMJ article—this is the capital charges on the retained estate plus the annual PFI availability charge and is compiled from data submitted last year to the Health Select Committee by officials.


Bed Numbers

  4.  The fourth column in the table below shows the number of beds currently delivered in the 12 operational PFI hospitals in England compared to those set out in the PFI solution at the time of FBC approval and which were submitted to the committee last year.

Revenue Costs

  5.  The NHS does not have a formal statistical definition for revenue costs per bed. Clearly, many different factors could be included or excluded from such a definition, such as operating expenses or employee costs. However, the "Income from Activities" entry from a Trust's accounts is analogous to the revenue generated by the organisation from providing clinical services. Figures are therefore provided in the attached table for those PFI hospitals which have a year's operational accounts.

SchemeType of BedsPFI solution in FBC Beds operational Aug. 2002Trust Income ("Income from activities" from audited accounts 2001-02)
DARTFORDTotal G&A beds 362362
Maternity40 40£73,443m
Total Beds402 402
CARLISLEMedicine216 216
Surgical144 144
ITU/HDU9 8£114,478m
Total G&A Beds406 405
Maternity38 37
Total Beds444 442
SOUTH BUCKSAcute331 £92,16m
Total G&A Beds489 492
Maternity53 53
Total Beds542 545
General & Acute 833
Total G&A Beds

PFI hospital not open for a full year
Maternity67 50
Total Beds953 953
NORTH DURHAMTotal G&A Beds 443452
Maternity33 33£107,619m
Day Case48 48
Total Beds524 533
GREENWICHTotal G&A Beds 447447

PFI hospital not open for a full year
Mental Health87 87
Total Beds571 571
CALDERDALESurgical116 110
Medical122 121
Elderly149 154
SCBU14 14
Total G&A Beds417 407£102,519m
Mental Health78 78
Women/Children74 74
Day Case35 37
Private Patient Beds 100
Total Beds614 598
SOUTH MANCHESTERAdult Medical 213316
Surgery286 335
Paediatric60 47
Total G&A Beds* 559698
Additional surgical 60
Maternity37 47£155,826m
Medical Rehab33 44
Mental Health77 77
Unallocated91 32
Day Case74 49
Total Beds931 947
BARNET & CHASE FARM (Wellhouse)Total G&A Beds

PFI hospital not open for a full year
Maternity30 30
Total Beds459 459
Geriatric25 56
Total G&A Beds

PFI hospital not open for a full year
Maternity49 49
Total Beds474 544
Geriatric53 53
Total G&A Beds

PFI hospital not open for a full year
Maternity21 21
Total Beds340 340

(Bishop Auckland)
Medicine General


Elderly69 69
Surgery72 72
Total G&A beds

PFI hospital not open for a full year
Maternity25 25
Day Case43 43
Total Beds347 347

  Note—There was an arithmetical error on last year's return—this showed the total G&A beds under the PFI solution as 659 where it should have been 559, bringing the total to be provided to 931, as opposed to 1031. However, the opened scheme has a total of 947 beds, which compares to the OBC figure of 948.

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