NHS BLOOD AND TRANSPLANT. January Annual Functional Report Estates & Facilities

Transcription

1 NHS BLOOD AND TRANSPLANT January 2014 Title Annual Functional Report Estates & Facilities Executive Summary Action requested from the Board Strategic Priority or Regulatory Requirement that this item relates to Organisational forums where the paper (or equivalent paper) has been considered Implications for Equality and Diversity Author Responsible Director NED Reviewers An annual report of the activities of the Estates and Facilities function within NHSBT.is provided. A presentation will be made at the Board meeting to highlight the key actions and issues regarding the function s support of NHSBT strategy. To review the report, and supporting presentation, and consider the need for any further assurance, or action required, in respect of the the function s capability to support NHSBT s strategy. Assessment of the function s capability to support NHSBT strategy. Executive Team N/A Mark Woodget, Deputy Director Estates & Facilities Rob Bradburn, Finance Director NA 1/15

2 Introduction Estates & Facilities Annual Functional Report to the Board January 2014 The primary purpose of annual functional reporting to the Board is to provide assurance regarding the capability and capacity of the functions to support NHSBT s business strategies. As the first report of this type for the Estates & Facilities (E&F) function, additional background on the composition of the NHSBT estate is provided. This report has five main sections: 1. Overview of the current property portfolio 2. Organisation and cost 3. Current strategy and plans 4. Emerging strategy and plans 5. Organisational capacity and capability The appendices to this report provide additional data on the portfolio of properties and cost of the function. Overview of the Current Portfolio The NHSBT estate comprises a portfolio of 94 properties of various sizes and uses distributed throughout the UK and representing a total floor space of 114,000m 2 (1.23 million ft 2 ). These properties can be grouped by type, as follows. Blood Collection Team Bases: The blood collection teams account for nearly half of the total number of properties and 9% of the total floor area. They are typically small, mainly light industrial units, used by the collection teams for assembling before travelling to collection venues, storage of consumables (some temperature controlled) and session equipment, training, small offices, staff welfare and vehicle parking. The 44 team bases are distributed geographically to serve local panels of donors, ensuring that travel distances for collection team staff to mobile sessions are limited. The majority accommodate just one team but the largest accommodate up to four teams. All of the team bases are leased, typically on nine year leases with three-yearly break options. As a result there is regular turnover of break opportunities, rent reviews and expiries. Main Blood Centres: The 14 blood centres together account for most of NHSBT s total floor area (78%). They vary considerably in size from the smallest, Plymouth (418 sqm) to the largest, Filton (15,935 sqm). They typically accommodate multiple functions, the extent of which (excluding Group Services) are listed in Appendix 1 and summarised in the following chart. Seven of the main blood centres are freehold and seven are leasehold. Four of the leasehold properties have leases longer than 100 years. 2/15

3 7,000 6,000 5,000 4,000 3,000 2,000 STS Tissues R&D SCI H&I RCI BS 1,000 0 Filton Colindale Liverpool Manchester Birmingham Tooting Sheffield Cambridge Oxford Brentwood Newcastle Leeds Southampton Plymouth Manufacturing takes place at five locations (Filton, Colindale, Manchester, Sheffield and Newcastle), testing at two (Filton and Manchester) and there are Stock Holding Units (SHUs) at all of them. There is a further very small SHU at Lancaster (not shown). In the same way that the team bases are distributed geographically to serve panels of donors, the SHU s are distributed to serve local customer hospitals. Inevitably, some hospitals are closer to SHU s than others and this is typically reflected in the sizes of the hospitals own blood banks. Those which are very close to an SHU are typically very small, holding minimal stocks of blood and taking frequent deliveries (or collections) from their local SHU. The Tissues operation is primarily located in the Liverpool Centre where there are extensive clean room facilities for the processing of tissue products. The standards of cleanliness required for tissue processing are very much higher than for blood because the process is open to the atmosphere, in marked contrast to the closed processing of blood. Liverpool also houses the manufacturing of reagents (mostly for internal use) that are used in support of red cell reference testing. The main blood centres also house the laboratories supporting our diagnostic services (RCI and H&I), and stem cell / molecular services as illustrated above. As with stock holding units these services are required to be close to the hospitals that they serve. As a result although the processing and testing of blood components has been reduced to 5 locations, the sites have been retained in order to provide local stock holding and diagnostic/stem cell services. Where possible, however, the space created by the closure of testing/processing has been utilised by reintegrating any stand alone satellite locations in the surrounding area. R&D activity is primarily concentrated at three locations (Filton, Cambridge and Oxford) and is closely associated with adjacent universities. 3/15

4 Donor Centres: In addition to the donor centres provided within main blood centres, there are a further 14 stand alone static donor centres. They are typically located in town centres, in secondary retail environments, although there are some in out-oftown locations. With the exception of the Gloucester Donor Centre, which is freehold, all are leased commercial properties. Lease terms are typically years with a variety of lease break options, although the Leeds city centre unit has a 25 year lease and the West End Donor Centre lease is for 997 years. The donor centres have historically been important for providing an environment in which platelets can be collected by component donation. This is only feasible at static blood centres because of the machines used in the process and the impracticality of transporting them to mobile session venues. Warehouses: There are five stand alone leased warehouses and a further three stores located in main blood centres providing storage for consumables used within the blood supply chain. The five warehouses were created when stores were displaced from blood centres due to lack of space for core functions. One of the five (Wimbledon) has recently been closed and the activity consolidated into Borehamwood. ODT Offices: Adoption of the recommendations of the Organ Donation Task Force in 2008 required NHSBT to establish team locations for the Senior Nurses for Organ Donation (SN-OD) that were transferred from local Trusts to NHBST. The SN-OD teams were absorbed within existing NHSBT locations where possible but required us to establish new satellite locations in Cardiff, Belfast, Falkirk and Cambridge. This extended the estate portfolio to include more properties outside England. Previously, with the exception of blood collection team bases in North Wales, all properties had been in England alone. Most of the ODT offices are small commercial leased properties of between 100 and 200 sqm. The one exception is the former UK Transplant office at Fox Den Road, Stoke Gifford, Bristol, a freehold property located a short distance from the Filton Blood Centre, which at 2,080 sqm is the largest NHSBT office, accommodating national ODT staff. Specialist Therapeutic Services Units: These are typically very small units of less than 150 sqm, hosted by NHS Trusts in hospitals, where patients can most conveniently be treated by NHSBT staff. They were previously accommodated in static donor centres but the need to transport in some cases very sick patients to the donor centres and the close juxtaposition of donors and patients was not ideal. The STS units are occupied under either leases or Memoranda of Terms of Occupation (MOTOs). Data Centres: A single stand alone data centre is located on the Bio Products Laboratory (BPL) site at Elstree, Hertfordshire which was previously part of NHSBT. Other data centres are located in Colindale and in the ODT office building in Stoke Gifford. The lease on the data centre at BPL expires at the end of 2015 by which time it is expected that NHSBT will have exited the site and implemented a new national data centre strategy using a mix of cloud based and co-location services. Other Offices: The number of satellite offices has been reduced considerably in recent years as functions have been re-integrated into main blood centres using space freed up by processing/testing closures. Excluding the ODT offices at Stoke Gifford, there remain just two stand alone offices; NHSBT s headquarters at Watford and a small 84 sqm property in Plymouth. The latter was leased to accommodate an overspill of blood collection office staff from the very small Plymouth Blood Centre. 4/15

5 In summary, 84 leasehold properties make up approximately half of the total floor space. The remaining 10 freehold properties account for the balance. 30% of the total floor space is subject to lease expiries or breaks in next five years, as illustrated in the chart below. The later peak, in 2023, marks the end of the Liverpool Blood Centre lease. 16% 14% 12% 10% 8% 6% 4% 2% 0% >100 years In total 78% of the total space could potentially be vacated or reconfigured in the next five years, should the business require it. This indicates a high level of flexibility although many of the problems in the estate stem from the limited degree of control which we, as tenants, can exercise over our leasehold portfolio. Examples include temperature control, parking and shared services. Further details of NHSBT s 94 properties are included in Appendix 1. Organisation and Cost The estates annual budget totals 40.4m or 9.3% of total NHSBT income. This includes payroll costs of 3.4m, capital charges of 9m and an estates development fund of 4m (effectively spending on large non-recurring projects/refurbishments that do not qualify as capital). Hence 60% of the estates budget is incurred on ongoing property related costs (rent, rates, utilities, cleaning, maintenance, waste management etc). A more detailed analysis is provided in Appendix 2. The Estates and Facilities (E&F) team totals 85 FTE, mostly geographically based managers and staff, providing services to internal customers occupying the estate portfolio. The main structure is based around the main blood centres, each of which, with the exception of Plymouth and Oxford, has a dedicated E&F manager. The operation is organised into three regions, with central technical support. Over 85% (by value) of facilities services are outsourced, the only exceptions being reception, mailroom and some portering. The key part played by E&F managers in the running of the main centres dictates that maintaining cover at each of them is a major requirement of the structure. 5/15

6 In addition to meeting internal customers requirements, the E&F team focus on achieving national consistency, regulatory and statutory compliance, as well as ensuring the performance and value for money achieved through contractors. E&F also includes a small central team which manages NHSBT s annual capital and revenue building works programmes, a single National Property Manager who handles all leases, freehold titles and related topics, and two staff focused on sustainability and environmental management. Determining the efficiency of the estate and the management function is challenging. Benchmarking would be the logical approach but finding valid comparators, including for example other European Blood Alliance members, has proved to be difficult due to very wide variation in context and use. By contrast, the benchmarking of office buildings/space is straightforward and is undertaken annually by the Government Property Unit (GPU). In this context the two NHSBT office properties in scope for the exercise (Watford and Stoke Gifford) both flag as red status due to their relative under utilisation. The level of routine repairs and maintenance of the estate generally compares well with other NHS organisations. Alterations to accommodate changes in the business s operational needs, replace major elements of fabric or plant and make improvements to meet statutory or regulatory requirements are managed through an annual programme of works. For 2013/14, the programme includes 58 projects, totalling 7.6m ( 4m revenue and 3.6m capital). A parallel annual programme of minor works projects with individual values between 1-50k is also undertaken, totalling 873k in 2013/14 and including over 200 projects. Current Strategy and Plans The NHSBT estate was first assembled on the creation of the National Blood Authority in 1993 from a variety of predecessor organisations with regional or zonal geographical coverage. Variations in the scope of the services provided by those predecessor organisations was reflected in the size and content of the properties. A single national estates function was first created in The first National Blood Service Estates Strategy was written in The focus at that time was on improving the age and condition of the estate and it was from this that the new centres in Liverpool and Manchester were spawned. Other themes were the national integration of services, modernising and improving the standard of accommodation in line with improvements in product safety. Subsequent estates strategies continued to focus on modernisation and consolidation. The age and condition of the main blood centres began to be addressed between 2000 and 2008 with the construction of firstly, the Liverpool Centre at Speke in 2003 and then the Bristol Centre at Filton in The Speke property replaced a cramped old city centre property. The creation of the Filton Centre was predicated on both the replacement of an old building on the Southmead Hospital campus and the consolidation of manufacturing and testing in the midlands and south west region. Both of the centres were new buildings which raised the general standard of accommodation for the organisation. The construction of Filton formed part of a broader vision at that time for the creation of four super centres including three further major investments in the South East, 6/15

7 North East and North West. The underpinning economics were not sufficiently developed and accordingly, as part of the NBS strategy in 2007 (supported by McKinsey), the plans were rejected in favour of a focus on closure and rationalisation of processing and testing capacity. Following the consolidations that then took place between 2008 and 2011 a number of satellite office properties, Aztec West (Bristol), Birmingham Research Park, Deansbrook Road (Edgware), Oxford Science Park, Elstree Gate (Borehamwood), Capitol Park (Leeds) and Middlesbrough, were closed and re-integrated into the main sites, saving ca 1.7m pa. It has also lead to the planned closure of the Brentwood Centre that will release further cash savings of 0.6m pa. It is worth noting that the Brentwood project involves the closure and exit from an old, NHSBT owned site, moving to a three site leased model with lower overall cost and much greater operational flexibility. Future estates re-configurations are likely to follow this model, at least in part, resulting in a larger number of smaller properties but with much greater flexibility and efficiency. The most recent strategy, presented to the Board in May 2012, adopted measures of suitability and whole life cost to evaluate the estate. The suitability of main blood centres and static donor centres was assessed against a range of 41 qualitative criteria, while the unit of measurement for comparing whole life costs was the equivalent annual cost per square metre over 50 years (EAC/m 2 ). The results were plotted on a two-by-two matrix to highlight those properties meriting special attention. The matrix for main blood centres is shown below with the RAG status for each one indicated. None of the properties fell in the red (redevelop) quadrant Maintain Filton Liverpool Review Manchester Suitability (%) 50 Leeds Plymouth Southampton Newcastle Colindale Cambridge Lancaster Oxford Sheffield Tooting B'wood Birmingham 0 Review Redevelop? EAC/m 2 ( ) Improving the suitability of the properties in the lower left quadrant was identified as the strategic priority. Following extensive option appraisals this led directly to the following major projects/investments that the Board has recently been asked to approve. 7/15

8 refurbishment of Vincent Drive, Birmingham ( 4.4m, three phases over three years) refurbishment of Tooting ( 7.7m, six phases over five years) reconfiguration of the estate in the Brentwood / Essex area This leaves the sites at Leeds and Sheffield as the main focus for the next steps in the development of the estate (see below). We also need to develop a plan for Colindale in order to improve its condition and ensure best use of what is a key manufacturing facility.. In addition there is a programme of planned refurbishment of the static donor centres (each refurbishment costing ca 1m), although the impact of any changes as a result of the platelet strategy will require a fundamental review of the plan. In the short term the reduction in demand for red cells is leading to the closure of two team bases, in Barnstaple and the Isle of Wight. A base in Nottingham has also been closed in Any further reductions in demand are expected to lead to further closures. Emerging Strategy and Plans The objective of the Estates and Facilities function is to deliver resilient solutions and services that, in support of business strategies, provide a high qualilty environment for staff, are compliant with regulatory requirements at all times and which are demonstrably efficient and effective. Within this overall objective we will adopt the principle of sustainability and drive the NHSBT Carbon Management Plan. We will also seek to prioritise flexible solutions that recognise the increasing pace of change and the impact this may have on NHSBT s operational plans in the future. With regard to office areas a presumption in favour of open plan space and greater emphasis on shared or hot desks in support of greater agile working will apply. Typically, eight or fewer desks will be provided for every ten office staff and permanent desk ownership will be limited. The aim would be to achieve densities in the region of 8m2/FTE or less, in line with the GPU target for new properties. Understanding and anticipating business needs is critical to success. In this respect it is fair to say that this has only emerged over the last three years as a result of the focus on developing long term strategic objectives and plans for each of NHSBT s strategic operational units. Looking forward we will engage closely with each of the businesses to establish business needs and to provide alternative infrastructural opportunities in order that the most effective corporate solutions are identified and implemented. As part of this, resilience of the estate will be a critical consideration with greater focus on business risk and mitigation thereof. In this context the short term focus will be on delivering the three major investments established by the last strategic plan: refurbishment of the Birmingham Blood Centre refurbishment of the Tooting Blood Centre implementing the Brentwood estates reconfiguration Beyond this there will be an additional short term focus on 8/15

9 developing an improvement plan for the Colindale Blood Centre supporting the implementation of the Blood Donation strategy and the impact that this will have on the supporting donor centre and team base infrastructure within this, supporting the implementation of Blood Donation Organisational Design project (BDOD) to identify the ideal locations for management and supporting staff understanding the potential impact of revised collection and manufacturing plans that would emerge from ongoing reduction in red cell demand, and implementation of a new platelet strategy (reduced component donation) and implementation of pathogen inactivation supporting the changes emerging from the warehousing and logistics function Looking beyond the short term the following direction of travel, by region, is anticipated. NORTH North / East Estate Optimisation: As identified by the 2012 analysis the Leeds and Sheffield centres are less than ideal in terms of configuration and cost. In addition the Leeds Centre is becomingly increasingly non viable. A large part of the Seacroft Hospital, on whose site it is located, has closed and a planned housing development will surround the centre over time. Over the next year alternative options will therefore be generated for evaluation with local customers and staff. Liverpool: The size of the Liverpool centre versus the activities it houses, and the extensive suite of clean rooms within, makes it a costly facility to operate. As such a high level of overhead is loaded, in particular, onto the tissue products that are manufactured there. The lease on the property has 10 years to run. The landlord is very unlikely to accept a surrender before it expires in 2023 and it may be questionable whether renewal could be justified at that time. A future consolidation into either a smaller property in Liverpool or perhaps a larger north west reconfiguration may need to be considered nearer the time. SOUTH EAST When the Brentwood estates reconfiguration has completed there will remain only Tooting and Colindale serving London with Colindale north of the river and Tooting to the south. As described above Tooting is subject to a major refurbishment programme and although Colindale has a relatively modern fabric, it still has some refurbishment needs. In addition Colindale has been subject to an ongoing series of incremental changes over time and the use of space is sub optimal. Furthermore it is now surrounded by a major housing development and is suffering from a number of operational constraints and inefficiencies. There is therefore a need to develop a longer term improvement plan for the facility with emphasis on maximising space utilisation, creating flexibility, improving services and ensuring resilience. Watford: As noted above, the 2012/13 GPU benchmarking report on the two NHSBT office properties in scope for the exercise (Watford and Stoke Gifford) flagged both as red status for efficiency. Although the properties are not unduly expensive they are both under utilised and exceed the utilisation target of 10m²/FTE. The Watford lease ends in 2015 and a decision will be required on the future requirement for a headquarters office before the end of the coming financial year. At the last lease break opportunity, in 2011, we had great difficulty persuading the GPU that we 9/15

10 should remain in Watford. The GPU s new National Property Controls had just been introduced, including the expectation that all ALBs would relocate to vacant civil estate when such opportunities arose. There is now a much greater expectation that vacant civil estate will be used in place of new commercial leases. It is therefore unlikely that a case to retain the existing offices in Watford when the current lease comes to an end in 2015 would be accepted and we would be expected to relocate to vacant government space within the area. SOUTH WEST Recognising the under utilisation of the Stoke Gifford site, recent activity has focused on closure of Stoke Gifford and consolidation within Filton. This project was recently postponed on the basis that the relocation of the IT infrastructure supporting organ donation and transplantation to Filton would be too risky and hence investment in infrastructural resilience and replacement was needed in advance of any move, Going forward, however, it will be necessary to develop a long-term plan for the South West including Filton, Stoke Gifford and Emerald Park (a further location that houses a warehouse but also a blood donation session environment test space and additional office space). This will again require an extensive options appraisal exercise, in conjunction with the wider business, in order to ensure that the end state is efficient and meets GPU targets (based on private sector benchmarks) for space utilisation and cost. Organisational Capacity and Capability As noted above the Estates and Facilities (E&F) team totals 85. The operation is organised into three regions, with central technical support. Almost all facilities services are outsourced. A small central team manages annual building works programmes, a single National Property Manager handles all leases, freehold titles and related topics, and two staff are focused on sustainability and environmental management. High level organisation chart Deputy Director E&F Sustainability Manager Head of E&F National Property Manager Head of Capital Projects Regional E&F Managers x3 National Technical Manager Construction Project Managers x3 E&F Managers x13 10/15

11 The E&F team have established a strong reputation for managing day to day requirements and for managing large refurbishment projects. As such there is sufficient capacity and capability to support day to day operations and existing plans. In 2013/14 this has included the ability to support 58 projects totalling 7.6m ( 4m revenue and 3.6m capital) and a parallel annual programme of 200 minor works projects with individual values between 1-50k (totalling 873k). Although there has been a heavy focus on supporting incremental change there has been more limited engagement in proactively identifying and developing longer term strategic options and for working with the business to drive step change solutions. An objective for the following year, therefore, is to review the organisational structure of E&F with the objectives of:- enabling greater capacity for strategic thinking and development at both regional and national level providing greater opportunity for management development and emergency cover whilst ensuring value for money Funding for projects is provided through capital and revenue budgets. With regard to capital there has been little constraint to capital budgets in the past from the DH. More often than not we are encouraged to bring forward large projects where possible to utilise the funding that is available. Options for re-provisioning estate in the Leeds/Sheffield area may lead to a project with much a higher capital budget than the norm. It is anticipated that the planning with DH will identify this as a separate project with specifically identified funding. Revenue funding is effectively provided through blood price income and, as such, is dependent on the prices that are set. To date our budgets have provided for ca 4m pa for large non-recurring projects that do not qualify as capital. Given the pressure on prices, exacerbated by the decline in red cell demand, it is likely that this level of funding will be reduced in future. As a result there will need to be greater prioritisation of projects with a focus on front line activities in blood donation and processing/laboratory areas. 11/15

12 Appendix 1 The NHSBT estate comprises: 44 blood collection team bases 14 blood centres (all with SHU s, 9 with donor centres, 3 with warehouses and 3 housing key R&D facilities) 14 stand alone donor centres (1 with an STS unit) 6 stand alone Organ Donation and Transplantation offices 2 other offices (Watford and Plymouth) 5 warehouses 5 stand alone STS units 1 stand alone data centre (at BPL) 1 stand alone stockholding Unit 2 stand alone laboratories (Clinical Biotechnology Centre and Cambridge Science Park) Floor space by location / type Donor Centres ODT Others Stores Filton Collection Team Bases Plymouth Oxford Southampton Liverpool Manchester Cambridge Birmingham Sheffield Brentwood Tooting Colindale Newcastle Leeds 12/15

13 Appendix 2 13/15

14 Appendix 2 - Financial Data Estates Function Budget Statement Category Nominal Description 2012/ /14 Actual Actual Budget Budget Forecast Forecast WTE Spend WTE Spend WTE Spend Estates Team Income -412, , ,388 Pay ,806, ,876, ,886,190 Non Pay Laundry 242, , ,573 Rent /Rates 8,406,728 8,136,302 7,978,302 Utilities 4,056,156 4,204,776 4,364,776 Catering 467, , ,440 Cleaning 2,380,527 2,266,128 2,266,128 Waste Disposal 1,876,440 1,915,068 1,795,068 Security 495, , ,920 Off Site Storage 307, , ,102 Premises Maintenance 4,347,641 3,922,957 3,797,957 Postage 572, , ,488 Finance Lease Interest 466, , ,336 External Services Other 469, , ,676 Other 736, , ,950 Capital Charges 8,922,749 8,988,079 8,988,079 Total Non Pay 33,746,761 33,315,795 32,962,795 Total Income & Expenditure ,141, ,784, ,391,597 Construction Team+A8 Pay , , ,944 Non Pay Other 65,533 81,647 66,647 Total Income & Expenditure , , ,591 Major revenue projects (estates development) Non Pay 3,186,113 4,032,481 4,032,481 Total Income -412, , ,388 Pay ,256, ,373, ,243,134 Non Pay 36,998,407 37,429,923 37,061,923 Total Income & Expenditure ,842, ,395, ,847,669 14/15

15 Costs of Main Centres Millions Filton Colindale Liverpool Manchester Tooting Sheffield Newcastle Brentwood Cambridge Leeds Birmingham Oxford Southampton Plymouth Forward Works Register The requirement for future maintenance and repair work is regularly assessed, based on surveys of the condition of the estate, and documented in the form of a Forward Works Register (FWR). A summary of the FWR for the three estates regions, as at October 2013, is shown below. NORTH MSW LSE TOTAL 2012/13 Year 1 1,831, ,795 1,766,561 4,227, /14 Year 2 1,700, ,935 1,300,181 3,455, /15 Year 3 699, , ,550 2,126, /16 Year 4 652, , ,176 1,822, /17 Year 5 1,116, ,615 1,148,945 2,489,960 TOTAL 6,000,537 2,287,354 5,835,413 14,123,304 15/15