Department of Health: The Paddington Health Campus Scheme

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part five5.1 Both NHS Trusts continue to need substantialinvestment to redevelop or refurbish their hospital estatesto make them fit for purpose. The 2004 OBC quantifiedthe combined cost of bringing both the St Mary’s andRoyal Brompton Hospitals’ estates to modern standardsat £759 million. Both Trusts are working on reviseddevelopment plans which take account of the demandand capacity work the Strategic Health Authority hasconducted during the latter half of 2005. At this pointin time the exact nature of future capital developmentrequirements for both Trusts has yet to be established.5.2 The cost of construction in the public sector hasincreased at above the cost of inflation while the schemewas in development. This means that it will be some37 per cent more expensive to build replacement facilitiesnow than it would have been in 2000, before allowing forgeneral inflation. A worked example of the impact of delayis at Appendix 4. Such a delay does not represent cashspent or wasted on this scheme and nor is it an argumentfor simply building schemes more quickly, irrespectiveof the business case for investment. It demonstrates thatredevelopment now will be markedly more expensivethan in 2000.5.3 The North West London Strategic Health Authorityin July 2005 announced that it would carry out a sectorstrategy review to determine its capacity and servicerequirement and investment priorities. It is unlikely thatall three hospitals – St Mary’s, the Brompton and Harefield– can be rebuilt or refurbished as required in the light ofavailable capital resources.5.4 In September 2005 the Department issued newguidance on the business case approval process for majorcapital schemes. The principal changes were thatnnthe Department would no longer approve StrategicOutline Cases. These would now only requireStrategic Health Authority approval; andOBCs for schemes with a capital cost of £75 millionor more will require Departmental approval beforea scheme can advertise in OJEU. This would followStrategic Health Authority approval of the OBC.5.5 The changes reflected a re-prioritization ofDepartmental resources away from reviewing StrategicOutline Cases as experience had shown they werevery difficult to assess conclusively. The intention of thepre‐OJEU review is that it ensures Departmental resourcesare focused on more fully developed cases to check thatcapacity and service assumptions fit with national policies,affordability assumptions are robust, the scheme representsgood value for money and the scheme is ready for OJEU.5.6 The Department, in the context of the Our health,our care, our say 11 White Paper on health and socialcare services in the community, is reconsidering thecurrent capital investment programme. It expects toreduce the scale of the programme from £12 billion to£7-9 billion after a reappraisal of the affordability of theprogramme and individual schemes within it in early2006. It will also, as part of this exercise write to StrategicHealth Authorities with practical guidance on applyingthe experience of previous procurements, both in the NHSand in wider government.5.7 Since the end of the scheme, Imperial College hasadvanced plans to refurbish the National Heart and LungInstitute building on the Royal Brompton Hospital Campus.This current modernisation is expected to be completed byearly 2008 at a cost of around £10 million.11 Our health, our care, our say: a new direction for community services, Cm 6737, Department of Health, January 2006.the Paddington Health Campus scheme37
glossaryglossaryAddendumAffordabilityBusiness CaseCampus PartnersCapital Investment ManualClinical Reference GroupCommissionersEnabling and decantingFull Business CaseGateway ReportIndependent Review Panel 2005Joint Project Board (JPB)Joint Reviewthe May 2005 update to the December 2004 OBC.the capacity of an organisation to afford the health campus. It is usuallyexpressed as the maximum price that the organisation could pay.a document that supports a proposal for capital investment. It mustconvincingly demonstrate that a project is economically sound, financiallyviable and will be well managed.St Mary’s NHS Trust, the Royal Brompton and Harefield NHS Trust andImperial College of Science, Technology and Medicine and, from 1 July 2002,Partnerships UK.provides detailed guidance to the NHS for each stage of a capital schemeincluding practical guidance on the technical considerations of the full capitalappraisal process and a framework for establishing management arrangementsto enable benefits to be identified, evaluated and realised.responsible for developing clinical models based on affordable models of carefor the Campus.NHS organisations, usually Primary Care Trusts, which receive direct fundingfrom the Department of Health to purchase healthcare for patients. May alsoinclude national commissioners of specialist services.works that would facilitate the move of the three hospitals to the campus andallow St Mary’s hospital to remain operational during building works.the third phase (following the Strategic Outline Case and Outline Business Case)of the business case, which assesses and plans the preferred option in detail.a review by the Office of Government Commerce to establish a scheme’s fitnessto proceed in the procurement cycle.commissioned by the North West London Strategic Health Authority to producea report on the ‘Lessons Learned from the Paddington Health Campus Project’(published 10 October 2005).established in May 2002 to oversee the Paddington Health Campus scheme.The Board was co-chaired on a rotating basis by Non-Executive Directors ofSt Mary’s and the Royal Brompton and Harefield NHS Trusts.collaboration between the Department of Health, HM Treasury and the NationalAudit Office in 2004 to consider why the scheme’s estimated capital costs hadrisen so much since the 2000 OBC and how this situation had come about.38the Paddington Health Campus scheme
Page 1 and 2: department of healthThe Paddington
Page 3 and 4: DEPARTMENT of healthThe Paddington
Page 5: Part 3The Campus partners were unab
Page 8 and 9: summary8 While the Campus partners
Page 10 and 11: summary21 Ultimately, in addition t
Page 12 and 13: part onePart oneThere was a strong
Page 14 and 15: part oneThere were strong clinical
Page 16 and 17: part twoPart TwoThe way the Campus
Page 18 and 19: part two2.6 Securing planning permi
Page 20 and 21: part twoRisk management2.14 The NHS
Page 22 and 23: part two2.28 Public support for the
Page 24 and 25: part three3.1 The Royal Brompton an
Page 26 and 27: part three3.12 The PDCL negotiator
Page 28 and 29: part three3.24 All Campus partners
Page 30 and 31: part threeThe changing proposals fo
Page 32 and 33: part three6A comparison of capital
Page 34 and 35: part fourAccountability for the sch
Page 36 and 37: part four4.8 Some of the advice and
Page 40 and 41: glossaryLondon Regional OfficeMemor
Page 42 and 43: appendix oneAppendix oneChronology
Page 44 and 45: appendix one2004 (continued)JulyChi
Page 46 and 47: appendix two7 It was the view of th
Page 48 and 49: appendix fourAppendix fourThe oppor
Page 50 and 51: appendix fiveDepartment of Health:

Department of Health: The Paddington Health Campus Scheme

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