Select Committee on Health Memoranda

Memorandum by the Department of Health (Continued)

Table 4.8.4b


  1.  Element of NHS capital programme awaiting to be allocated.

Table 4.8.4c


  1  The figures are after the transfer to revenue of the IM&T Modernisation Fund (£240 million) and Ambulance Response Times (£23 million).

  2  These are costs associated with the maintenance and disposal of the NHS retained estate funded from gross capital receipts on the retained estate.

  3  These are the capital receipts generated from the sale of NHS trust assets. These receipts can be spent in addition to those voted in Estimates.

  4  Includes centrally held budgets, Health Authority Capital Cash Limits and High Security Psychiatric Hospitals.

  5  This is to cover:

    (i)  the higher capital threshold in the NHS;

    (ii)  capital expenditure on Joint Finance and GMS which are recorded as revenue as they are spent by a third party.

  6  The element of capital charges included in HCHS revenue but earned by NHS trusts in prices and used to finance capital expenditure.  

  7  Figures may not sum due to rounding

  18.  These tables are presented separately and show the forecast outturn and an update of the capital disposition table shown in the 2001-02 Departmental Report.

  4.8f  For major projects (currently defined as those greater than £25 million in value), could the Department please provide a comparison between the PFI price and the publicly financed option. The publicly financed comparator's costings should be broken down as follows:

  Basic construction contract, broken down between pre-implementation and post implementation costs;

  The value of risk adjustment, again broken down between pre-implementation and post implementation costs, in both pounds and percentage terms, and

  The final total real full life cost of both options.

  Where adjustments have been made to the PFI costs (to bring prices to a like for like basis), these should be broken down on the same basis as the publicly funded option.

  Could the Department also provide a brief commentary on any apparent differences between the reported schemes.

  19.  The information requested is contained in the attached tables.

  *  The negative risk figure is due to 100 per cent transfer of risk of the £4.5 million and £800,000 being income generated by the scheme.

  Explanatory notes:

  All values are expressed as net present costs (NPCs) over the life of the project, including the risk values. The project life is typically assumed to be 60 years.

  The NPC of the risk adjustment in each phase (pre and post implementation) is expressed as a percentage of the NPC of each phase. The NPCs and risks in the post-implementation phase are often not comparable between projects, because they include variable amounts of costs and risks that are common to both options. For example, the West Middlesex and Dudley projects include the cost of clinical services in the analysis, so the NPCs are high compared to other projects.

  The cost of PFI options is not broken down into pre and post implementation, because the Trusts do not start paying the unitary charge for the development until it is built and available for use.

  The pre-implementation costs refer mainly to costs associated with the construction of the buildings and the large equipment items. Some other costs, such as small equipment items and backlog maintenance, are included in the post-implementation costs in all cases, even though some of these costs are incurred before the new building is commissioned. This approach has been taken to increase the extent to which projects can be compared on a like for like basis.

  In the case of West Middlesex, the negative figure is due to the 100 per cent transfer of risk of the £4.5 million and £800,000 being income generated by the scheme. Also note NPC based on cash flow of entire Trust.

  For UCLH the value of post implementation risk for the PFI option is 0 because the PFI project includes two private wards that will generate £10 million income for the Trust annually.

  4.8g  Could the Department update the information given in Table 4.8g on donated capital additions by region only?

  20.  The information requested is contained in Table 4.8.5

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