Memorandum by Consort Healthcare (Durham)
Limited (PS 7)
Consort Healthcare (Durham Limited), "Consort",
is a 50/50 joint venture dedicated PFI concession company formed
for the Durham project by The Royal Bank of Scotland plc and Balfour
Beatty plc. Both shareholders have extensive portfolios in various
sectors of the PFI market, including healthcare. These include
a further joint collaboration in the New Royal Infirmary of Edinburgh
and Medical School, currently under construction.
ConstructionBalfour Beatty Construction
Limited/Haden Young Limited.
Non-clinical ServicesHaden Building Management
DURHAM PFI PROCESS
1. OJEC Advert placedDecember 1994.
2. Five organisations pre-qualifiedMay
3. Consort pre-qualified to bid as one of
two biddersSeptember 1995.
4. Consort appointed Preferred BidderMarch
5. Contract financial closeMarch
6. Construction commencementApril
7. Doctors' Residences Completion6
8. New Trust Headquarters Completion7
9. Phase 1A Construction Completion30
10. Phase 1B Construction Completion12
11. Full Service Commencement and Clinical
Operation of Phase 1A and B2 April 2001.
12. Phase 2 Construction Completion9
13. Commencement Clinical Operation Phase
27 August 2001.
14. Phase 3 Construction (external works)
Completion due30 November 2001.
15. Completion of ConcessionMarch
All key construction and operational dates have
Accident and Emergency Department.
Maternity and Gynaecology (in-patient and out-patient).
Paediatrics (in-patient and out-patient).
Pathology, Pharmacy, Mortuary, main kitchen,
Total 22,000 square metres.
Radiology (including CT and MRI).
Total 9,000 square metres.
Main Entrance and Reception.
Medical and Surgical Offices.
Total 9,000 square metres.
Refurbishment of Retained Buildings.
Total Hospital Area (including Plant Rooms and
Service Areas) 45,000 square metres.
Total Beds 476.
3. SERVICES PROVIDED
Consort is responsible for the design, construction
and funding of the facilities followed by the provision of the
non-clinical services in the new District General Hospital for
the concession period, some 30 years after Financial Close.
Service operations began on completion of clinical
commissioning of Phase 1A and B with the transfer of Trust non-clinical
staff to Haden Building Management under TUPE provisions.
3.2 Transitional services
From Construction Completion, during operational
and clinical commissioning of each phase, Consort was responsible
for providing the following services in each completed new phase:
access control and co-ordination;
estates management and maintenance;
health and safety co-ordination;
provision of approved persons for
medical gas and pressure systems; and
management of internal and external
3.3 Operational services
From the Full Service Commencement date, Consort
was responsible for the provision of the following services to
the entire Dryburn Hospital site:
catering (both patient and restaurant);
portering (some patient movements,
equipment and general duties);
cleaning (of circulation areas and
security (both manpower and CCTV);
central telephone operators (24 hours,
seven days per week for a range of trust sites);
linen/laundry (operation of a sewing
room and full hospital linen service);
grounds maintenance (of the whole
site, including car parks and landscaped area, winter safety measures
estates management (planned and reactive
maintenance for the new hospital and the old retained buildings);
provision and management of the full
facility including energy, mechanical and electrical services,
provision of approved persons for
medical gases and pressure systems; and
car park and traffic management (public
3.4 Additional Consort responsibilities
Throughout the operational phase of the project
Consort is responsible for the following:
life cycle replacement programme
for the new hospital to maintain specified standard over the project
management of health and safety relating
to the services and integration with Trust procedures;
procurement and management of non-clinical
insurances for the UHND site; and
development and support of new facilities
and services to meeting changing Trust requirements.
Fixed price and programme for construction.
Fixed price for all non-clinical services (subject
to indexation and periodic market testing).
Full availability of the whole facility for
the concession life.
Full cost of all planned and reactive maintenance
and life cycle replacement of building elements, plant and service
Payment partially linked to patient volume.
Land value underwritten by shareholders.
Income from restaurant.
Income from car park.
Income from pay phone.
5. DESIGN AND
The University Hospital of North Durham was
built and opened for patients on programme in just three and a
half years. The overall design and construction period was considerably
less than that achieved historically for traditionally funded
The Consort solution utilised the layout and
shape of the site to produce a building which blended in with
existing woodland to produce a pleasant outlook from many patient
areas. The design retained a number of key features of the Trust's
own design but with some significant improvements. One of the
most significant was to produce a hospital with only three main
floors rather than six floors with a number of changes in level,
as was the case under the original Trust design. This change significantly
improved the functionality of the hospital.
The relocation of the new building to the North
of the site increased the redundant land to be made available
for development, which enabled the shareholders to maximise their
offer for the land which was used to reduce the charge to the
The new hospital has been constructed only a
few feet away from the existing operational hospital without any
Concession period 30 years from 31 March 1998.
Construction Capital Cost £70 million.
Shareholder Equity and Sub-debt £16.8 million.
Senior Debt £77.2 million.
Annual Charges to Trust (as 1 October 2001):
Annual charge increases with agreed indexation.
Availability Fee is subject to deduction for areas declared
Service Fee is subject to deduction for poor performance.
Services are additionally subject to periodic benchmarking
and market testing.
7. RESPONSE TO
As the most recent privately financed hospital to commence
operations, North Durham has, understandably, attracted significantly
Regrettably, much of this publicity has been sensational
and inaccurate. For the information of the Committee, there follows
a brief commentary on the main negative issues which have been
1. "Staff called a 999 ambulance to transport
a patient from the old hospital to the new because no porters
were available" Guardian 23 July/Newcastle Journal
This happened during the transitional period shortly after
the Accident and Emergency Department moved to the new hospital
andthe GP Out-of-Hours Service was still in the existing facility.
The GP manning the Out-of-Hours Service, who was not a member
of Trust staff, was not fully aware of how to request a porter
and therefore rang an ambulance instead. Improved training and
instruction has been provided by the Trust to all GPs using the
2. "Ambulance bay too small" Newcastle Journal
At the time the criticism was made, the Accident and Emergency
entrance was being used as the temporary main entrance for all
With the opening of later phases, which are now complete,
there is a Main Entrance for patients, a separate entrance and
waiting area for Non-Emergency Ambulances leaving the area outside
the Accident and Emergency Department for emergency ambulances
only. Even at busy times, all emergency vehicles can gain suitable
3. "Design of sluice areas such that staff have
to drag foul waste through ward areas" Guardian 23 July/Newcastle
Journal 24 July.
The design and layout of sluice rooms, and the wards in general,
were fully discussed and designed in conjunction with clinical
staff and are fully in accordance with relevant Health Building
Notes. This issue had not been raised with Consort prior to the
article. The Trust have subsequently confirmed to Consort that
they have no concerns over the layout.
4. "Unbearable heat in some wards" Guardian
23 July/Newcastle Journal 24 July.
The hospital has been designed to be as "green"
as possible and uses natural ventilation as far as possible. The
new hospital is built adjacent to the existing facilities. The
construction programme is based on a phased transfer from the
old facilities to the new. At the time that the criticism was
made, the old hospital was being demolished adjacent to the new
To prevent any risk to patients from any emissions resulting
from the demolition process, strict controls were put in place
during the final stages of the construction programme. These included
keeping windows in the new hospital closed. This clearly compromised
the ventilation in the new hospital causing the high temperatures.
This also coincided with a period of particularly hot weather
in the early summer.
The Trust installed temporary mobile air-conditioning units
for the short term.
5. "New hospital has too few beds to cope with
demands" Northern Echo July/Guardian 23 July.
The number of beds within the hospital are as planned and
requested by the Trust in its full Business Case in 1997.
6. "Generator failure plunging Operating Theatres,
Intensive Care and Accident and Emergency into darkness".
There has been no failure of the generators but there have
been two occasions when mains power has been lost. On each occasion
the standby generators have started and restored power within
the required 15 seconds or less.
7. "Flood of sewage coming through the ceiling
in Pathology" Guardian 23 July.
There was an incident on Friday 13 April 2001 (Good Friday),
11 days after opening Phase 1. A blockage was caused by two pieces
of wood lodged in a waste pipe. The blockage was finally cleared
on Easter Saturday some hours after the call was first made.
8. "Pharmacy squeezed next to the mortuary without
a waiting area" Guardian 23 July.
The original design had the main Pharmacy Department located
on the lower ground floor, where it now is, supported by a Satellite
Unit for dispensing to Outpatients, which was to be located adjacent
and convenient to the Outpatient areas, which included a waiting
area. The Trust has decided to use the area of the Pharmacy Satellite
Unit for an alternative purpose. This means Outpatients are required
to go to the main facility on the lower ground floor. Consort
has been investigating options for creating a waiting area by
installing seating in the corridor adjacent to the Pharmacy Department.
This proposal has recently received approval from the Fire Officer
and will be implemented in the near future.
9. "Unbearable heat in ward kitchens, where meals
brought in from a factory need to be regenerated" Guardian
The zonal kitchens do get very hot and Consort is looking
into ways to improve this situation. There is a regimented regime
for regeneration which means in the larger kitchens, virtually
all ovens are on at the same time. This generates the maximum
heat in the area.
Meals are delivered to the hospital three times a week to
meet the predictable (high) quality levels which are required.
The system is generally believed to be safer than more traditional
hospital processes. The quality of the food has generally been
well received by patients.
10. "The hospital seems to be charging for everything
it can, including bedside TVs and vases for flowers" Guardian
The hospital TVs are supplied by Patientline under contract
to the Trust. The government's NHS plan requires installation
of such systems in all hospitals by 2004. Consort is not charging
and never has charged for the provision of vases.
11. "£30 charge to use a porter" Northern
Echo 12 July.
The majority of patients are transported by Team Assistant
Supports, who are ward-based Trust employees working in accordance
with the Patient Focussed Care model. These staff transport all
patients who require a wheelchair. If a patient is moved with
their bed, an HBML porter will assist. Since April, the Trust
has expanded some aspects of the portering service provided by
Consort through variations to address changes within the Trust.
There has never been a charge per use of porter.
12. "The WRVS volunteers will have to pay rent"
Guardian 23 July.
The WRVS have been allocated space free-of-charge to provide
the volunteer services normally provided by the WRVS. There is
an additional space that was set aside for retail facilities to
provide services for both staff and visitors as well as patients.
Income from this area is used to subsidise the cost of the hospital.
Rather than let this space to a private sector retailer,
as is normal in many hospitals, it was jointly agreed by the Trust
and Consort to let this prime retail site to the WRVS. The WRVS
have been happy to enter into this arrangement, which is directly
between the Trust and the WRVS. The full lease income paid by
the WRVS is used to subsidise the cost of the hospital.
North Durham Hospital is recognised as an excellent design,
built to time and cost. Any large DGH will have "snagging"
issues whether privately or publicly financed. In the case of
Durham, all snagging issues have been dealt with efficiently and
promptly. In respect of the services, they have only just commenced
and so far there is every indication that the system is working
well and that the staff, Trust and patients are very satisfied
with levels provided.