sea service support for stp delivery€¦ ·

Draft & confidential: For discussion only Draft & confidential: For discussion only

SEA Service Support

for STP delivery

16th September 2016

Draft & confidential: For discussion only

Contents

• Who we are

• Principles of consistent National SEP Service

• Details of our team and the SEA lead for each STP area

• Strategic Estate Advisor Role

• National template and expectations around it

• Some key STP estate themes/issues in the South


Who Are We

• CHP & NHSPS are Ltd Property Companies who’s shareholding is solely owned by DoH;

• CHP was formed in 2001 and delivered the Local Improvement Finance Trust (LIFT) program that invested 2.5 billion pounds in the community and primary care sector ;

• NHS PS formed in April 2013 following structural management changes to the NHS and took responsibility for free hold PCT estate that did not transfer to provider organisations;

• CHP & NHS PS have been working closely with Commissioners and providers since June 16 in supporting delivery of Local estate plans.


Principles of Consistent National SEP Service

1. A named Strategic Estates Advisor for each STP footprint (whilst allowing for small number of shared areas)

2. Clearly defined role for Strategic Estates Advisors and their delivery requirements for 2016/17

3. Ensure all Interim Local Estates Strategies reach a base level standard by March 2017 – as measured against an agreed checklist for determining what a “good” CCG Local Estates Strategy should cover

4. Agreement on what STP Estates Strategies should cover and clear local governance for integrating CCG estates strategies with STP planning and implementation

5. Creation of a common estates data-set and consistent national use of mapping software (eg. SHAPE, ePIMS, Ordnance Survey) -

6. A National SEP Steering Committee as sub-set of Estates Programme Board to monitor delivery of consistent service and address any specific material matters as appropriate – with common integrated reporting.


Details of our team and the SEA lead for each STP

area

CHP and NHSPS have agreed named lead for each STP on basis that CCG responsibilities are unchanged – so allowing existing relationships to be maintained

Each company will have lead responsibility for 18 STPs each

In all these areas there is very good local co-ordination between CHP and NHSPS SEAs:

- Kent & Medway - Gaynor Baker (CHP) Paul Cross (NHS PS)

- Sussex and East Surrey – Gaynor Baker (CHP) James Page (NHS PS)

- Bath, Swindon & Wilshire – Andrew Strange (NHS PS)

- Bristol, North Somerset & South Glous – Ant Burn (CHP)

- Buckinghamshire, Oxfordshire & Berkshire West – James Page (NHSPS)

- Cornwall & Isle Scilly – Andrew Collier (CHP)

- Devon – Andrew Collier (CHP)

- Dorset – Janet Kearney (NHS PS)

- Frimley Health – James Page (NHS PS)

- Gloucestershire – Andrew Strange (NHS PS)

- Hampshire & IOW – David Richards (CHP)

- Somerset – Ant Burn (CHP)

- Surry Heartlands – James Page (CHP)


Strategic Estate Advisor Role

• Establishing a Local Estates Forum (if one is not already in place;)

• collating data from the DV Primary Care dataset and outputs from the PEP;

• working with the outputs from the Carter Review to advise upon emerging opportunities;

• highlighting inefficient, high cost and under used estate;

• sharing best practice;

• considering the drivers for change, both service and estate;

• reviewing the retendering of service contracts to make the best use of the available estate;

• identifying property constraints and opportunities in the area;

• advising on the estates element of the Sustainability and Transformation Plans;

• working with other public sector bodies to help identify opportunities for economic, shared estate solutions;

• advising upon investment requirements to support cross- sector estates rationalisation and possible funding solutions;

• identifying opportunities for the disposal of surplus estate;

• identifying steps to ensure that local estates strategies can be kept up to date and remain relevant and useful in the medium and long term

• Assisting CCGs, STPs and Local Estates Forums with strategy implementation and supporting task & finish groups.


National Template & expectations around it

Will support delivery of consistent estates STP submission across England;

Template is the minimum level of estate information to be submitted;

Support the estate response to the transformational change in model of care;

To identify top 4/5 transformational change estates projects that form part of the STP

delivery and implementation program;

Will highlight the potential level of opportunity for estate rationalization, land disposal,

reduction of estate demand, recurring revenue savings and capital investment needs;

Provide an overview on the ability if the estates transformation plan is potentially

affordable;


STP Estate Opportunities

• Property opportunities?

– reduce demand?

– reduce running costs?

– release capital?

• Know your property

– data

– site visits!

– benchmarking

• Know your services!

• Understanding relationships

– property ownership

– winners and losers/carrots and sticks

– OPE

• Identify the problem!


STP Estate Themes?

• quick wins vs long term projects

• leasehold opportunities?

• office estate?

• vacant space?

• outdated community hospitals?

• primary care “at scale”?

• costs to achieve?

• investment requirements?


Reduce Demand?


Vacant Space


Appropriate use of space?

PPP Supporting

New Models of Care

26 August 2016

Our approach

From Conception to Delivery:

The next generation of PPPs in Health

CHP has taken a robust and collaborative approach to exploring the merits of a PPP solution

To establish perspectives from all the relevant stakeholders involved in the programme and

consider key challenges for a future estates solution one to one meetings and workshops were

conducted with representatives from Department of Health, NHS England, NHS Property

Services, NHS Improvement, commissioners and providers

Seven potential options were identified that

were formally agreed to be refined and

evaluated using the framework set out.

A Programme Board has been established

which has representation by NHSE (Peter

Brazel), NHSI (Jason Dorsett), NHSPS

(Dennis Markey) and DH (Ben Masterson).

Current stage

5 work streams identified

to refine preferred option:

1. Corporate structures, partnering

and balance sheet treatment

2. Funding options and structures

3. Pipeline demand and scope of

services

4. Tenancy agreements, payment

structures, risk transfer and

design innovation

5. Considering current PPPs and

delivery vehicles

DH request CHP to

explore PPP Options

Stakeholder engagement

with health system and

PPP sector

5 options identified:

• Do nothing (Public

Funding)

• Maintain Status Quo

• Adaptation of Existing

Models

• New Model

• CHP Ownership Change

PwC engagement

following tender exercise

7 options scored

(additional two):

Do nothing (Private

Sector Funding)

National Commercialisation

of NHS Estate

PwC stakeholder

engagement 1-2-1’s

and group workshops

Preferred

option

identified

High-level

Heads of

Terms

produced

Legal advisors appointed

Key

messages &

assurance

Draft

Shareholder

Agreement

Draft

Partnering

Agreement

Production of detailed

Heads of Terms

Draft

Shareholder

Agreement

CHP Innovation

programme lease

options

15

PPP supporting new models of care

Underpinning the delivery of the Five Year Forward View and GP Forward View

What the PPP vehicle will deliver

• Provide the NHS with the estate expertise to fill

capacity and the delivery gaps

Access to industry best practice and innovation

Collaboration through trusted and transparent public

private partnerships Enables integrated and flexible

infrastructure for new models of

care to deliver, improved patient

outcomes, improved environment

for staff and improved efficiency of

NHS estate cost

01 02

PPP attributes

Proven deliverability to time and cost

Combine public and private sector skill sets to focus

on common outcomes

Ability to hold assets, risk and manage a supply

chain for the NHS

Fit for purpose estate delivering better patient outcomes

04 03

Key challenges being addressed

Delivering modern estate to house new models of care

Improve capacity via better utilisation and ability to

deliver 7 day working

Eradicating backlog maintenance through options to

transfer lifecycle risk

Funding and affordability

Ability to utilise public capital and debt funding to

finance estate solutions

An Off ‘national government’ balance sheet solution

Generate capital receipts from the NHS estate

1

6

PPP in the Modern Health System

PPP Delivery

Vehicle Delivers; skills, resources and

supply chain management

NHS Property

Holders Focus on property and

facilities management.

National Advisory

Service Single centre of

support to deliver

advisory services

Asset holding

subsidiary of PPP

with ability for health

Trusts to take a

shareholding and

investment stake.

*STP Support Via NAS (informed client) and PPP

(delivering services)

1

7

Delivering better patient outcomes through the right NHS estate

Proposed PPP:

Infrastructure Partnership Model

Infrastructure Partnership model

Commercial Principles

• 8–10 Regional PPP companies with the right balance between operational

sustainability through scale and local buy-in.(£100m demand)

• 80/20% Private/Public shareholding with the ability to bring in trust/local

authority shareholding at subsidiary level.

• Promote NHS investment at regional and local levels, whilst building

private sector confidence in the health sector.

• Structured to deliver estate services to transform the health estate through,

master planning, health care planning, asset management, transaction

support, investment, development and operational estate management.

• Ability to hold assets and risk, access funding and cost base.

How are they procured and who can access their services:

• Via an OJEU to ensure competition and to attract the right consortia of

partners.

• National coverage (geography) and accessible by all health organisations and

local authorities.

IP

IP

IP

IP

IP

IP

IP

IP

1

8

Company Structures

The proposed structure offers local autonomy with support from a National Advisory Service

National Advisory

Service (NAS)

Regional IP

Regional IP

Regional IP

Regional IP

Regional IP

Existing LIFTCo

Existing Strategic

Estate Partnership

Local Partnership

(IP and individual trust)

Local Partnership

(Local Authority)

Local Partnership

(CHP/NHSPS)

Existing PPP (LIFT/SEP) would

operate at this level

8‒10 Infrastructure Partnerships

(Regional PPPs):

Delivery via regional coverage to

ensure the right scale to sustain a

viable PPP

Local Partnerships

• Local ownership (STP or

Trusts) through ability to take

shareholding and investment

• Vehicle which holds the asset

and allows freehold to remain

in public ownership (LRA)

where appropriate

National Advisory Service:

• A national organisation

acting as the health

system’s informed client

and delivering support

• Monitors infrastructure

demand pipeline

• Central cost base

• ? Act as ‘head’ tenant for

leases not held by

providers

19

GWB/50345459.ppt

Public Sector (Freeholder)

Regional PPP

CHP PSP

Local HoldCo 1

Local ProjectCo 1

Counterparty / User

Local HoldCo 2

Local ProjectCo 2

Counterparty / User

Debt Funding

Debt Funding

Local Ownership Local Ownership

[x]%

100%

>80% <20%

Property access / lease

[y]% Equity/sub-debt

[y]% [x]%

NB: • CHP/public sector ownership (x +

CHP’s proportion of y): not to exceed % leading to on-balance sheet treatment.

• Property access/lease arrangements: dependent on property solution.

Services/ Project

100%

Counterparty / User

Services

Services/ Project

Equity/sub-debt Equity/sub-debt



Property access/lease

Property access/lease

Key: Contracts

Ownership

Equity/sub-debt

PSP PSP

Relationship Structures 20

Design

(DQIs)

Build

(BREEAM & Service)

Maintenance

(DECs)

Operating Costs

(POEs)

All schools (190)

PPP New Build school (67)

Non-PPP New Build schools (87)

Refurbished schools (36)

39%

24%

17% 55% 55% 70%

78% 59% 31%

33%

67%

73%

Across 190 schools, PPP

schools demonstrate better

value:

Lower operating costs

Lower maintenance costs

Reduced build costs

Sustainable costs

PPP works to deliver value:

Asset delivered on time

and on cost

Remain well maintained

over the life time of the

building

Remain compliant

UCL 2016 study into the benefits of PPP

PPP approach to delivering infrastructure compared to individual D&B

A learning framework for Strategic Partnering in construction: the Asset Value enhanced model, the UCL Bartlett School of Construction and Project Management, Daan Vermeer, 2016

21

Mobilising for Success 22

Next Steps

The key next steps to facilitate the development of the preferred option are as follows:

• Further stakeholders engagement to gain endorsement and buy in, including the Sir Robert review

• DH business case approval (mid Oct 2016)

• Refinement of regional PPPs that aligns with existing STP planning boundaries and activities

• Further HMT engagement to facilitate their discussions with ONS, ensuring PPP and its assets remain off balance sheet

• Establish the key contractual documents that will regulate the future PPP vehicle and determine how it interacts with

providers and commissioners;

• Gather key benchmarking data around the cost of debt to inform the development of funding models;

• Continue to work with the project pipeline forum to refine the demand levels for future estate solutions

• Continue to work with the New Models of Care team

• Work with potential private partner organisations to confirm ongoing interest in participating in a bid process

• Complete current phase to enable a OJEU process to comment Jan 2017

23

Appendix

A set of critical success factors were identified which then became our evaluation criteria

As a result of discussion between CHP, DH and stakeholders and analysis of strategic priorities, the criteria were assigned

either a hurdle pass/fail requirement or relative weights based on their overriding priority.

Evaluation Criteria

Source: PwC options analysis & appraisal

Access to funding

Local ownership

National coverage

Optimal risk allocation

Deliverability

Service flexibility

Pass/Fail

25%

20%

15%

20%

20%

• This option allows for capital that remains off balance sheet at department level and has no impact on DH’s CDEL: and

• The option enables a standardised and fully understood procurement and streamlined approvals process.

• The option enables local leadership (e.g. Devolution proof) to ensure a suitable balance between central and local

accountability; and

• The option provides clear guidelines on accessibility and eligibility.

• The option provides a single delivery route for all future infrastructure initiatives that meet defined categorisations;

• The option is open and accessible to all geographies to enable capital investment in healthcare estate; and

• The option falls within the relevant procurement regulations.

• The option allows for the provision of a less complex procurement that is straightforward to execute and can be

delivered at pace;

• The option can fulfil the scale of infrastructure initiative needs identified in the detailed strategic estate plans (and

subsequently STPs); and

• The option can access a combination of local and existing management capability within property companies.

• The option can draw in the full suite of estate services from design partners, financing, project management,

construction and management skills; and

• The option is an affordable long term solution for providers and is able to tailor to specific needs and requirements of the

local health economy and respond to the dynamism of the NHS.

• The option is able to allocate risk to the organisation best able to manage it;

• The option encourages a collaborative approach between public and private sector; and

• The option provides an attractive proposition to the private sector.

25

Preferred Option Refinement

Five work stream were identified with key outputs.

Enable drafting of

potential Partnering

Agreements

Identifying funding

options

Implications, structures

and sustainability

Revenue consequence

mitigation

A Corporate Structures

B Funding Options

and Structures

Context, strategic

need, commercial

requirements/pipeline

Scoping Service

Requirements

Explore PPP activities

and optimum

engagement point

C Pipeline Demand and

Scope of Services

Occupancy

Agreements

Payment Processes

Design Innovation

D Tenancy Agreements,

Payment Structures,

Existing & future PPPs

working together to

benefit "all"

What are the key

issues/concerns of

existing PPPs

E Considering Current

PPPs and Delivery

Vehicles

Develop best structure

to enable drafting of

SHA or equivalent

(LLP)

Design an Off Balance

Sheet solution

12

Focus on communicating benefits that PPPs

bring through public and private sector

collaboration

A series of five stakeholder workshops* have taken place to challenge and refine the

preferred option. These have focused on five key work streams and outcomes with a further

validation workshop planned.

Key Messages from Stakeholder Engagement

PPP company with 80/20

shareholding split

A shareholder (light) agreement and

a partnering agreement for services

No exclusivity, 10 year partnering

agreement and focused on delivery of

transforming the estate

Ability to utilise public capital

or debt funding

Focused on achieving best

debt funding rates

Innovative funding solutions to

support shell and core delivery

Corporate Structures

Funding Options

and Structures

Ability to delivery full range

of estate related services

Master planning and healthcare planning

to drive best utilisation of the Estate

Resources, skills, expertise and

supply chain management to be

delivered through PPP

Pipeline Demand and

Scope of Services

Flexible occupancy options

and payment structures

Innovation of design to support new models

of care and commissioning arrangements

Industry best practise to drive greater

utilisation of the built environment

Tenancy Agreements,

Payment Structures,

National coverage to compliment existing

PPPs and delivery frameworks

Recognition of existing contractual

arrangements

Considering Current

PPPs and Delivery

Vehicles

Note: *Attendees have included NHS trusts, commissioners, HMT, DH, NHSE, NHSI, NHSPS, Sir Robert Naylor’s Team, Investors, Advisors, Funders and LIFT/SEP private sector

27

The pipeline includes 881 schemes. Approximately 414 are

deemed to be new developments amounting to £3.83bn.

The pipeline combines schemes from a number of sources:

• CCG SEPs in CHP areas, combined with SEA

local intelligence and including Devo Manchester

• Existing CHP Capital pipeline

• Existing NHSPS approved Customer Capital nationwide

• The P21+/22 framework

Additional work is required, and is currently in progress, to

improve the quality and depth of detail on each scheme.

Current Status of the Pipeline

CHP has coordinated a central forum to establish the demand pipeline which is now chaired

by NHSE

NHS Strategy/5YFV

Estates Strategy

(SEPs/STP Estates Strategies)

Transformation Options/Requirements

Single Integrated Capital Pipeline

Delivery Options

Implementation

28

Summary of Tier 1 Projects

Type 2016/17 2017/18 2018/19 2019/20 TOTAL

New Developments Capital (schemes) Capital (schemes) Capital (schemes) Capital (schemes) Capital (schemes)

£0m - £5m £28.65m (11) £66.78m (26) £67.16m (25) £40.2m (17) £202.79m (79)

£5m - £10m £30m (5) £169.53m (26) £142.18m (20) £131.49m (20) £473.2m (71)

£10m - £20m £26.6m (2) £65m (6) £311.6m (25) £198m (18) £601.2m (51)

£20m - £50m £38.25m (1) £86.05m (3) £152.5m (5) £112.5m (4) £389.3m (13)

£50m - £100m £54m (1) £50m (1) £104m (2)

£100m+ £200m (1) £112.5m (1) £312.5m (2)

LIFT Variations * £2.5m (1) £3.03m (2) £5.7m (2) £4.05m (2) £15.28m (7)

Other Variations * £13m (2) £63.09m (16) £53.42m (15) £25.25m (6) £154.76m (39)

Extensions * £20.03m (3) £75.93m (14) £7.67 (3) £5.05m (3) £108.68m (23)

Total £159.03m (25) £529.4m (93) £994.23m (97) £679.04 (72) £2361.71m (287)

Key stats:

287 Tier 1 projects – Total £2.36 bn

However, need to apply significant discount factor (C50%) and further

analysis required to confirm feasibility of many schemes

Please note: there are currently 21 unclassified schemes in Tier 1 (£657m).

29

PPP

Groupings

STP Area Population

New Developments

Tier 1

Tier 1

within LIFTCo

Tier 1

outside LIFTCo Tier 2

Tier 2

within LIFTCo

Tier 2

outside LIFTCo Total

Total

within LIFTco

Total

outside LIFTCo

£

#

schemes £

#

schemes £ % £

#

schemes £

#

schemes £ % £

#

schemes £

#

schemes £ %

London

North West London

North Central London

North East London

South East London

South West London

8.9 302.7 25 302.1 24 0.6 0% 372.7 53 372.7 53 0 0% 675.4 78 674.8 77 0.6 0%

Greater

Manchester

Greater Manchester 3.1 159.7 20 104.5 15 55.2 35% 265.9 18 144.5 12 121.4 46% 425.6 38 249 27 176.6 41%

North West

West, North and East Cumbria

Lancashire and South Cumbria

Cheshire and Merseyside 5.1 169.5 19 119.3 13 50.2 30% 342.1 27 281.8 21 60.3 18% 511.6 46 401.1 34 110.5 22%

North East

& Yorkshire

South Yorks & Bassetlaw

West Yorks

Durham, Darlington,

Hambleton, Richmondshire &

Whitby

Coast, Humber and Vale

Northumberland, Tyne & Wear

8.7 89.7 21 50.1 11 39.6 44% 222.9 15 151.6 7 71.3 32% 312.6 36 201.7 18 110.9 35%

West

Midlands

The Black Country

Birmingham & Solihull

Staffordshire

Shropshire, Telford and Wrekin

Coventry & Warwickshire

Herefordshire & Worcestershire

5.9 121.9 23 121.9 23 0 0% 48.7 6 48.7 6 0 0% 170.6 29 170.6 29 0 0%

East

Midlands

Derbyshire

Lincolnshire

Notts

Leicester, Leicestershire &

Rutland

Northants

Milton Keynes, Bedfordshire &

Luton

5.5 117.7 14 112.9 12 4.8 4% 88.3 11 62.1 9 26.2 30% 206 25 175 21 31 15%

East of

England

Cambs and Peterborough

Norfolk & Waveney

Suffolk and North East Essex

Herts & West Essex

Mid & South Essex

5.4 147.2 19 100.6 11 46.6 32% 72 11 60 8 12 17% 219.2 30 160.6 19 58.6 27%

South

and West

Bath, Swindon & Wiltshire

Buckinghamshire, Oxfordshire

and Berks West

Cornwall and Isles of Scilly

Devon

Somerset

Bristol, North Somerset and

South Gloucestershire

Gloucestershire

Dorset

7.2 109.6 26 26.5 8 83.1 76% 148.2 35 14.5 6 133.7 90% 257.8 61 41 14 216.8 84%

South East

Kent & Medway

Sussex and East Surrey

Frimley Heath

Surrey Heartlands

Hampshire and the Isle of

Wight

7 748.7 40 697.2 37 51.5 7% 211 22 69.9 10 141.1 67% 959.7 62 767.1 47 192.6 20%

1966.7 207 1771.8 198 3738.5 405

30 Schemes within or outside LIFTCo area

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