Dulwich Programme Board Minutes of the meeting held on 26 March Tooley Street

Transcription

1 Dulwich Programme Board Minutes of the meeting held on 26 March Tooley Street Present: Robert Park Chair and Lay Member, SCCG RP Rebecca Scott Programme Director, SCCG RS Gerry Owen Project Director - Community Health Partnerships and Project Support to SCCG GO Malcolm Hines Chief Financial Officer SCCG MH David Buckland Project Lead South London Health Partnerships DB Martin Saunders Healthwatch Southwark MS Simon James Assets and Disposals Manager -NHS Property Services SJ John King EPEC Patient Representative, SCCG JK Roger Durston Associate Clinical Lead, SCCG RD Jill Solly Head of Primary:Secondary Interface, Kings College Hospital JS Nicola Theron Area Director Community Health Partnerships NT Rachael de Souza Corporate Business Manager, SCCG RdS Apologies: Rosemary Watts Head of Membership, Engagement and Equalities RW Catherine Webster Capital Investment Manager NHSPS CW Eugene Prinsloo Head of Infrastructure Development CHP EP Olufemi Osonuga Associate Clinical Lead OO Paul Jenkins Director of Integrated Commissioning PJ 1 Welcome and introductions Members introduced themselves, and new participants were welcomed to the group 2 Conflicts of Interest RP advised that given conflicts of interests, for Agenda item 7 DB would be leaving the meeting before this item was discussed. This was agreed by all other members present. Action 3 Minutes and Matters Arising The minutes of the meeting held 22 January 2014 were agreed to be a correct record with the following amendment requested: Action for Agenda Item 3; Minutes and Matters Arising was allocated to RP. This was incorrect as there was no action RP is to be deleted in the minutes recorded for 22 January (Correction noted and has been made in the minutes of 22 January 2015). RdS 1

2 Programme Director s Report 4 Procurement Strategy RS (the Programme Director) reported that MH and RS attended a meeting on the 23 rd February 2015 with DoH where, following presentation and discussion of the extensive modelling scenarios for funding options of the new health centre, it was concluded that a LIFT development under a Land Retained Agreement (LRA) would represent the best value for the proposed centre (see Encl 4). The public sector funded option was decided to be the second best option. RS explained that the benefits of the LIFT option included retention of the land within NHS ownership and the return of the building to the NHS at the end of the 25 year lease period. RP supported that view. RS also outlined that another reason for opting for a LIFTCo as against a capitally funded option was the expected speed with which the next stages can begin. SCCG would ideally like the design stage to commence as soon as possible in order to mitigate risks of construction costs increasing progressively over an extended period. 5 Next Steps RS said that Community Health Partnerships (CHP) will therefore be the lead Department of Health property company for the development. There are a number of actions being taken forward: Leasing of the land from NHS PS to CHP RS said that CHP and NHS Property Services (NHS PS) were already in the process of discussing leasing arrangements for the land. There was an NHS PS Asset and Investment Committee meeting held on the 25 March where this was to be discussed. SJ reported no update from yesterday s meeting. SJ explained that the options were either a peppercorn rent; rent based on the opportunity costs of the site; or a hypothetical market rate of circa 150,000. It was expected that this would then be passed down to LIFTCo, but the detail of that needed to be confirmed. SJ Project management and development of the business case RS reported that Cyril Sweett UK had been commissioned to support the CCG in the development of the business case, and the work would be largely managed by GO. GO will also be working on the Dulwich Project with CHP. RS/GO CHP kick-off workshop CHP is aiming to hold a high-level workshop with all the parties involved to discuss and agree formal roles and responsibilities. This will include CHP, the CCG, NHS PS, NHS England. RP proposed that a schematic representation, plotting each partner with their respective roles would be useful, especially for engaging with members of the public. MH said that it was important to be clear so that there was an avoidance of duplication. NT said that it was important to get an early understanding of what the technical sign-off procedure involved. RS/NT 2

3 Letter to CHP asking that a New Project Proposal Request be put to LIFTCo The CCG are required to write to CHP asking them to put in a New Project Request to LIFTCo. The format of the proposed letter is appended to Encl 3 in the pack that was circulated to attendees at this meeting. RS advised that NHS England had already agreed to co-sign the letter. It contains a number of assurances which are to be discussed at the Programme Board today. RS/NT Meetings with Provider Occupants Southwark CCG (SCCG) will be working closely with Gerry Owen (CHP) to develop the business case and organise meetings with future occupants. RS/GO Communications and Engagement Plan RS noted that as soon as the New Project Proposal is issued the CCG will begin working on a communications and engagement plan for the next phase of the programme. RS/RW 6 Assurances required by CHP from Commissioning Organisations RS explained that subject to DPB support the sign-off on this letter would be approved by the Integrated Governance and Performance Committee that afternoon. It covers the following assurances: Confirmation that the following documents have been developed and approved by the relevant bodies: Project Initiation Document (Approved by NHS England in May 2014) Site Options Appraisal (Approved by NHS England in December 2014) Participants Requirements (Dulwich Programme Board in November 2014) The Programme Board confirmed that these documents have all been approved. Agreement in principle that at financial close we will confirm that services will continue to be commissioned to be provided from the new health centre for the duration of the lease. Members reviewed a draft of the letter which will be signed off at financial close and agreed support for this proposal. Agreement to underwriting, within an agreed budget, the transaction costs incurred by CHP. RS referred members to Encl 5; Dulwich Health Centre: transaction costs, explaining that as sponsors of projects, SCCG are the commissioners of the services, and the organisation which holds the financial risks. CHP will be the procuring authority, will own the land and hold the head lease. This means that SCCG will be working very closely with the CHP throughout the project. 3

4 RD asked for a thumbnail sketch of CHPs role, to which NT responded that the role of CHP was that of a public/private partnership. She noted that CHP operate nationally, and have a 40% share in all LIFT buildings having taken over the 20% share previously held by PCTs. She further explained that CHP is a part owner, and responsible for delivery of the project. She said that CHP seeks to deliver a programme where each new project will aim to learn from the delivery of previous projects. Therefore CHP is in effect an investor as well as a provider. There was a discussion about the costs of changes to PFI buildings, and members confirmed that they need to have a building that is not only designed so that changes are straightforward to make, but also that the leasing structures do not make this prohibitively expensive. RS clarified that this position is different from when the PCTs were procuring authorities. She explained that now many of the costs of developing the plans were incurred by CHP, but that they needed to be covered by the commissioning sponsors. She went through the proposed budget and noted that these costs were consistent with other similar projects. MH noted that the CCG has set aside 700K to cover costs of capital project developments this year, in and RS asked for confirmation of Programme Board support to underwriting transaction costs as outlined in Encl5. The Programme Board agreed to support the proposals. Agreement to underwriting abortive costs RS explained that in the event that the project is abandoned, there are some costs that the CCG would be expected to cover. These include any transaction costs already incurred and under some circumstances, costs already borne by LIFTCo in developing the project. She said that the transaction costs were already noted, but drew attention to the LIFTCo development costs outlined in the table in Encl 5. She confirmed that these figures are net of VAT and would add up to the value of approximately 1.4million by Financial Close. RS explained that the LIFTCo costs are only payable in the event that the scheme being developed demonstrates VFM and remains within the affordability envelope. It is also only payable after Stage 1 is complete. She explained how this would work: If the project is abandoned before Stage 1, LIFTCo will be liable for their costs If the project is abandoned after Stage 2 but is within the affordability envelope and is demonstrably value for money SCCG will be liable for the costs. RS drew members attention to the risk analysis set out in the paper and there was a brief discussion. This centred on community engagement, approvals processes and affordability. The Board felt that engagement with both clinicians and the public had to be managed through an on-going engagement, and RS confirmed that there would be a communications and engagement plan to do this. JK wanted to know whether a formal consultation was being planned. RS advised that formal consultation had already occurred, but there was still the need to continue with engagement with both clinicians and members of the public. 4

5 RS also confirmed that a lot of progress had been made in developing relationships with NHS England during the stages when the PID and Options Appraisal documents were being developed in There was a brief discussion about the business case process and the stages within it. There was also a discussion about affordability and how providers will be asked to commit to paying rent and thereby providing a guaranteed income flow. RD asked if these monies could be included in the business case. GO replied that at Stage 1 of the business case, we needed an honest declaration of intent from provider occupants. However, at Stage 2 of the business case, there would need to be a legally binding agreement. This is covered in the business case, under the heading Local support. Detail is in section 4 of Encl 8 which was circulated in advance of the meeting. Finally, in response to a question about general practice RS advised that Melbourne Grove will be the practice to move into these premises. RS asked for confirmation of Programme Board support to underwriting the abortive costs as outlined in Encl 6. The Programme Board agreed to support the proposals. Affordability envelope (Note: DB was not present for this discussion due to his conflict of interests). RS explained that the final assurance that is required is for the CCG to set a starting point for discussions about how much they are prepared to pay annually for the new building. She explained that in making a recommendation she had begun with the current costs of Dulwich Hospital and Melbourne Grove. She said that this year Dulwich Hospital is expected to cost 2,016,121 and Melbourne Grove a further 68,321. This adds up to a total of 2,084,442. She noted that this was a different figure that that previously reported as the costs for Dulwich had increased by a figure of circa 200k and changes made to NHS accounting for the cost of capital resulted in a reduction of circa 770K. The net effect led to a reduction in the available funding of around 570k. Against this, the main costs associated with the proposed LIFT building included: A lease cost including rental, hard FM and lifecycle costs Rates Soft FM and utilities Other costs resulting from the development. Some of these items fall outside the affordability envelope, and an estimate can be made for them. Assuming a building of around 4500m2, rates are likely to come in at circa 542K and soft FM/utilities at 450K. There was a discussion about how these figures had been arrived at and RS explained that for the soft FM and utilities figures recently developed LIFT buildings of a similar size (eg the Ackerman in Lambeth) had been used. An additional other cost is for GSTT s clinical staff to have an office based off site (an assumption of 80,000p.a. has been made to cover these costs). If existing services with no expansion was provided, the space required will be approximately 2334 square meters. However, the health centre we are proposing is 4500m2, and will accommodate additional services, the providers of which will pay 5

6 rent. RS explained that at this point we are therefore required to underwrite any additional costs. It is proposed that this is at the level of 500k, giving an affordability envelope of 1,516,692. MH confirmed that this had been allowed for within the 5 year financial strategy. NT confirmed that this would be a tight budget to work to, but that she supported it being set at that level as a starting point. There was a wider discussion about flexibility. RD asked whether CHP could assure SCCG if within the envelope discussed would give as much flexibility as was needed. NT said that NHS PS could not absolutely provide such an assurance but that at a recent completed Nelson project, as much flexibility as was possible had been enabled during the build programme. She said that the challenge in the design stage will always be to afford flexibility that accommodates changing uses of the accommodation for different services over a full 25 year lease period. She also confirmed that the degree of flexibility and cost would be discussed in detail during the design process. JK wanted to know when the lease would start and NT said that financial close would be from the day of practical completion. However an agreement would need to be reached about when the operational lease is to commence. MH said that our aim for financial close is in 12 months but it would be 18 months to 2 years after that before the premises were ready to use. RP again asked if there was a guarantee that the land would stay in the ownership of the NHS, to which NT confirmed that this was absolutely the agreement that had been reached by all parties. MH outlined that the on-going rental payments could be reduced by paying various development costs as we went along in the project. We are planning to pay transaction and some of the LIFTCo development costs as we go along rather than rolling these costs over a period of 25 years. RS asked for confirmation of Programme Board support to an affordability envelope of 1.5m as outlined in Encl 6. The Programme Board agreed to support the proposals. The Board agreed that subject to IGPC approval that afternoon the letter to CHP should be sent to Dr. Sue O Connell, Chief Executive for Community Health Partnerships. RP/MH MH/RS 7 Update on issues relating to the use of the surplus land at Dulwich Hospital SJ also reported that NHS PS is in discussions with the Education Funding Agency (EFA). The EFA s requirement is for as much space as they can get. He said that EFA attended a meeting with the council and their plans at this stage remained fairly fluid and no detail had yet been developed MH advised that the council is supportive of a secondary school. RP discussed potential traffic issues and asked whether a school on the site would help build a stronger business case for TfL to extend the 42 bus route which would provide more public transport to the site. As a result of purdah, SJ advised that no final decisions on the schools for this site could be confirmed until after June SJ 6

7 Business Case Requirements GO introduced Encl 8, which sets out briefly the requirements for each stage of the business case. She noted that there was on-going discussion between the PAU and CHP about the level of detail required for each organisation. She explained that much of the detail sits within stage 1 (including detail required to go to planning) and Stage 2 would include confirmation of planning consent, as well as reviewing and refreshing some of the detail. There was a discussion about the role of the business case in ensuring that provider occupants were signed up to their occupancy and the financial implication of that. It was confirmed that the early meetings with providers will be asking for in principle sign-up, at Stage 1 they will be asked for a declaration of intent, and at State 2 there will be a legal agreement. NT confirmed that there was recognition that providers do change, and that the leasing arrangements reflected that. There was a discussion too about how the building could be made to work efficiently in terms of space utilisation. There was also a discussion about working up the detail of the service offering, and confirmation that it was important to involve patients. RD asked about the future GP occupants. RS confirmed that the Melbourne Grove list would be tendered before the occupancy of the new building, so that process could take into consideration changes in GP costs. It was noted that informal discussions with the planners had already begun. Risk Register The risk register was reviewed and noted. No further changes were proposed. RS explained that now they had moved into a new phase of the development she and GO would be reviewing the whole risk register and that additional risks relating to this next phase would be included. RS/GP 6 Date of next meeting: 23 April, Rooms 132A&B 7