First memorandum by Health Management
(Carlisle) plc and North Cumbria Acute Hospitals NHS Trust (PS
CUMBERLAND INFIRMARY CARLISLE PFI PROJECT
This joint paper has been prepared for the Health
Select Committee by Health Management (Carlisle) plc and North
Cumbria Acute Hospitals NHS Trust.
Prior to the opening of the new hospital the
Trust provided clinical services from three hospitals on two sites,
two miles apart which had many significant operational issues:
High clinical risks from providing
services across the City.
Patient's facilities in some areas
were poor, eg nightingale wards which did not provide good levels
Lack of basic facilities in some
wards eg no piped medical gases, nurse call systems, inadequate
number of WCs.
Significant backlog maintenance issues.
Lack of theatre capacity.
Poor functional relationships for
key clinical departments eg A&E, Theatres and Imaging.
A new hospital development had been planned
for the previous 25 years but did not receive traditional funding.
In 1994 the PFI procurement commenced, financial close was achieved
in November 1997 with the Trust's private sector partner, Health
Management (Carlisle) plc.
The project involved the rationalisation of
three existing hospitals onto the Cumberland Infirmary site with
the subsequent clinical and operational benefits.
The redevelopment of the Cumberland Infirmary
Carlisle was achieved and opened to patients ahead of programme
in less than two and a half years. The overall design and construction
period was considerably less than that achieved historically for
traditionally funded projects. The project was delivered within
Improved facilities and environment.
Improved vertical and horizontal
Unified Imaging department with CT
Combined Day Surgery/Endoscopy Unit.
Dedicted Ophthalmic Day Surgery Unit.
Integrated Rehabilitation Unit, including
Dedicated main theatre block (with
Dedicated Family Services Unit, including
six LDRP maternity rooms.
Combined Critical Care Unit (ITU
and HDU with additional bed).
Individual bedside (pay) TV screens
33,000 square metre new construction.
10,000 square metre retained buildings.
Total beds474 design brief/442
CARLISLE PFI PROCESS
|1||OJEC advert placed
|2||Health Management (Carlisle) appointed preferred bidder
|3||Contract financial close
|5||Transfer of non-clinical staff commenced
||1 April 1998|
|6||Construction completion to 30 per cent of floor area
||14 February 2000|
|7||Construction completion of remaining area
||1 April 2000|
|8||Originally programmed construction completion
||15 May 2000|
5. PRIVATE SECTOR
Health Management (Carlisle) plc is a 50/50 dedicated joint
venture concession company formed for the Cumberland Infirmary
Carlisle by AMEC and Interserve (Facilities Management) Ltd [formerly
Building & Property Group Ltd].
Both shareholders have extensive experience in various sectors
of the PFI market, including healthcare. Projects include University
College London Hospitals which is currently under construction,
and Burnley General Hospital which is at the bidding stage.
Design & Build:
AMEC Capital Projects Construction [formerly AMEC
AMEC Capital Projects Mechanical & Electrical
[formerly Matthew Hall].
Interserve (Facilities Management) Ltd [formerly
Building & Property Ltd].
Concession Period45 years with a break
at year 30.
Construction capital cost at financial close£57.00
Total finance£83.71 million.
Finance provided by shareholders£7.91
Finance provided by 30 year AAA guaranteed bond£75.80
Annual charges to the Trust at 1 October 2001
in base date prices (March 1996):
Annual charge increases in line with RPI.
Availability fee is subject to deduction if areas
are declared unavailable.
Service fee is subject to deduction for poor performance.
Soft services are subject to periodic benchmarking
and market testing.
7. SERVICE PROVIDED
7.1 Health Management (Carlisle) plc are responsible
for the design, construction and funding of the new Cumberland
Infirmary. Responsibility for all non-clinical services for the
concession period of 30 years following practical completion also
lies with Health Management Carlisle.
7.2 Interim facilities management service provision began
in April 1998 with the transfer of non-clinical staff under TUPE
provisions. During the interim period up to practical completion
of the building works all the non-clinical services were progressively
transferred to Health Management Carlisle and their facilities
management subcontractor Interserve (Facilities Management) Ltd.
7.3 From the full service commencement date Interserve
(Facilities Management) Ltd have been responsible for the provision
of the following services to the entire Cumberland Infirmary premises
Car park and traffic management.
Cateringprovision of patient and staff/visitor
catering (canteen and coffee shop).
Estates managementprovision of planned
maintenance, adhoc repair and capital works.
Grounds Maintenance of the whole site including
car parks and landscaping.
Linen/laundryprovision of rental service.
Portering service to agreed areas.
Provision and management of the full facility
including energy monitoring, mechanical services, electrical services
and environmental controls.
Security including CCTV monitoring.
Telephone switchboard and help desk.
7.4 Health Management Carlisle are also responsible for
Life Cycle replacement programme for the hospital
to maintain a specified standard over the project life.
Management of health and safety relating to the
service provision and integration with Trust procedures.
Procurement and management of non-clinical insurance's
for the Cumberland Infirmary site.
Development and support of new facilities in 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
Full cost of all planned/reactive maintenance
and life cycle replacement of building elements, plant and service
Payment partially linked to patient volume.
Income from restaurant and coffee shop.
Income from retail unit.
9. LESSONS LEARNT
The project in Carlisle was in the initial wave of approved
PFI schemes, the second to be signed and the first to be completed.
There was little advice available and as a result the Trust was
exploring new ground. Consequently in such situations there are
a wide range of lessons learnt which have already benefited later
schemes. The PFU and the NHS Executive are now co-ordinating all
schemes across the country and standard project documents are
available which have improved the process.
The key issues learnt can be summarised as:
1. Detailed specifications for the building, clinical
services and support services should be agreed early.
2. The Project team should have appropriate human resource
3. Ensure multi-disciplinary groups undertake clinical
specifications and design approvals including modelling and simulation.
4. The equipment strategy should be prepared well in
5. The planned commissioning period of eight week was
6. Staff expectations have to be managed as all new buildings
have teething problems as systems are commissioned.
7. There are some weaknesses in the Contract particularly
in relation to the Payment Mechanism, service performance penalties
and operational costs that affect all parties.
8. Be aware of the cultural changes. In Carlisle's case:
Three distinct hospitals into one.
New working relationships public and private.
9. Any partnership takes time to develop and the relationship
between the Trust and HMC is still maturing.