Department of Health: The Paddington Health Campus Scheme

part twoRisk management2.14 The NHS Capital Investment Manual requires NHSTrusts to assess risk at a level sufficient to assure the Trustthat the preferred option in an OBC is affordable andrepresents the optimum solution. The 2000 OBC did nothave a risk register. In early 2001 the Campus partnerscommissioned a risk assessment from Ernst & Young whichwas delivered in May 2001. It was a static assessmentand was not integrated into the scheme’s ongoingmanagement. While there were plans to update theassessment in 2002, it was not updated until the autumnof 2003. A further update took place in the autumn of2004 and was incorporated into the 2004 OBC.2.15 There were a number of areas specific to the Campusscheme which were not covered in the risk assessments.There was no risk/impact assessment of;nnnnhaving two sponsor NHS Trusts and three SeniorResponsible Officers;commissioners’ reluctance to support the scheme’sdevelopment costs;the absence of strategic support; orthe cost-benefit implications of Imperial College’sresearch to the vision of the Campus.Although the Campus partners recognised the need toaddress the final bullet after the 2003 Gateway review(Appendix 2), they were unable to identify an appropriatemethodology to quantify either risk or benefit inconjunction with Imperial College.2.16 None of the risk assessments were used in astructured way as active risk registers for the ongoingmanagement of the scheme. As the 2005 IndependentReview Panel noted (Appendix 2), in 2003 the schemewas focussed on procurement when in reality it stillneeded to satisfy the pre-conditions of a robust OutlineBusiness Case.2.17 Following the Gateway review in November 2003(Appendix 2), the Campus partners accepted the needto introduce and embed a risk register, assumptionslog and issues log as primary project control tools.However, during the summer and autumn of 2004 theProject Director recognised that the project team didnot have the capacity, or financial resources, to absorbsignificantly different ways of working at the same timeas producing a new OBC. The Project Director decidedto concentrate on the OBC with the firm intention ofintroducing the Gateway recommendations for projectcontrols immediately after submission of the revised OBC.The Campus partners’ December 2004 OBC included arisk management strategy, an updated risk register and thecommitment to an active risk management process.Project management2.18 In October 2000, the Department’s guidance onfunding operational planning for PFI schemes was thatthe then London Regional Office would re-imburse thescheme with 1. 75 per cent of the capital costs to fund thecost of developing the scheme to Full Business Case. Thescheme, with projected capital costs in the 2000 OBC of£360 million was therefore based on a funding ceiling of£6.3 million. The project team understood that this couldnot vary, despite the significant increase in the estimatedcapital cost of the scheme.2.19 The abolition of NHS Regional Offices inMarch 2002 transferred the responsibility for fundingproject costs to the local NHS. The North West LondonStrategic Health Authority provided £2 million for projectcosts in 2002/03 and £1.5 million in 2003/04. Howeverfrom April 2004 the eight main commissioning PrimaryCare Trusts only agreed to cover half the sum sought fromthem. PUK agreed to match this funding.2.20 The Royal Brompton and Harefield NHS Trust hadactivity commissioned by all 303 Primary Care Trusts overthe period the scheme was being developed. Since mostPCTs therefore had little activity carried out by the RoyalBrompton and Harefield NHS Trust, it had correspondinglylittle influence over their commissioning decisions.In addition, approximately 20 per cent of the RoyalBrompton and Harefield NHS Trust’s income came fromspecialist clinical service commissioners and researchand development funding, neither of which consideredthat their resources had been increased to enable themto support project development costs. As noted by theIndependent Review Panel, inadequate and inappropriatefunding handicapped the scheme’s management capabilitythroughout the planning phase.18The Paddington Health Campus scheme