7.  A nationally agreed support scheme will provide assistance to 12 of the PFI schemes prioritised in the first wave. The early PFI schemes were being progressed on the assumption that they would be revenue neutral or better, but this did not happen because the capital cost base of hospitals in the top prioritised schemes was already depressed because of their poor state. A nationally agreed mechanism for smoothing out the payments profile of PFI schemes was put forward. This aimed to put the cost profile of PFI schemes on to the same footing as publicly funded schemes.

  8.  As originally conceived, a proportion of the concession payments each year were to be capitalised in recognition of the future economic benefits from the reduced payments in the secondary concession period. This complex way of providing support was originally thought necessary in order to be compatible with PFI schemes, and the sums agreed are shown in the following table. It has, however, now been concluded that support can be provided more simply. The support will be added to the HAs revenue allocations.

  9.  In common with trusts with publicly funded schemes, and trusts with short-term financing difficulties, regional offices sometimes make local financial support available. The terms of this support are agreed legally and vary from region to region.

  (iv)   Could the Department provide a table showing the increases to the capital cost of schemes since the last expenditure questionnaire and provide a commentary on changes of more than 10 per cent? In addition, could the Department provide the intital costs of PFI schemes at outline business case (baseline year) for those schemes reported in last year's questionnaire and comment on increases?

  10.  The information requested is contained in the following tables.

Northern & Yorkshire

A	B	C	D	E	F
Region	Capital cost at OBC stage	Capital cost reported last year	Capital value this year	% change since OBC stage	% change since last year
	£m	£m	£m
NORTHERN & YORKSHIRE REGION
Leeds Teaching Hospitals NHS Trust			119.0	0.0	0.0
Newcastle upon Tyne Hospitals NHS Trust		123.8	105.3		--14.9
South Tees Acute Hospitals NHS Trust	51.2	96.3	121.9	138.1	26.6
Carlisle Hospitals NHS Trust	39.0	64.7	66.7	71.0	3.1
Calderdale Healthcare NHS Trust	31.0	64.6	64.6	108.4	0.0
North Durham Health Care NHS Trust	55.2	61.0	61.0	10.5	0.0
Leeds Community & Mental Health Services NHS Trust	39.0	43.0	42.2	8.2	--1.9
South Durham Health Care NHS Trust	20.0	41.2	48.0	140.0	16.5
Hull and East Yorkshire Hospitals NHS Trust	21.7	21.7	21.7	0.0	0.0
Northumbria Health Care NHS Trust— Hexham GH	18.0	18.0	21.2	17.8	17.8
Northumbria Health Care NHS Trust	8.2	18.2	16.9	106.1	--7.1
North Durham Health Care NHS Trust— Chester-Le-Street Comm Hospital	10.4		10.4	0.0
Total Northern & Yorkshire	293.7	552.5	698.9

Comment on any increases over 10 per cent

GENERAL COMMENT ON OBC COSTS

  The OBC options were worked up a long time in advance of eventual agreement of the PFI solution. Differences in cost are therefore generally attributable to:

(a)  Inflationary increase

(b)  Changes in the scope of the scheme eventually undertaken under PFI.

NORTHMBRIA HEALTHCARE NHS TRUST—REDEVELOPMENT OF HEXHAM GH

  The cost has been updated to reflect changes to the content of the scheme. Revenue affordability has been maintained.

SOUTH TEES ACUTE HOSPITALS—SINGLE SITE DEVELOPMENT

  At OBC there was no PFI option. The cost shown was for a traditionally financed public sector project the scope of which was smaller than the PFI scheme eventually undertaken.

  The reasons for the increase include:

  Design changes to incorporate new services eg, Spinal Injuries and also to improve clinical functionality, and inflation.

NEWCASTLE UPON TYNE HOSPITALS

  The capital value reported last year equates to the total capital value of the revised scheme including VAT.

  The latest estimate of capital value to private sector is £105.3 million which excludes planning contingencies (£4.975 million) and VAT.

SOUTH DURHAM HEALTH CARE

  The increase to the capital value reflects changes to the content of the scheme. Revenue affordability has been maintained.

Trent & Eastern

A	B	C	D	E	F
Region	Capital cost at OBC stage	Capital cost reported last year	Capital value this year	% change since OBC stage	% change since last year
	£m	£m	£m
TRENT REGION
Southern Derbyshire Acute Hospitals NHS Trust			177.0
Queens Medical Centre, Nottingham University Hospital NHS Trust	10.6	16.6	16.6	56.6	0
Nottingham Healthcare NHS Trust	13.9	12.1	12.7	--8.8	4.7
Doncaster and South Humber NHS Trust1	11.3	11.3	11.3	0.0	0.0
Total Trent		40.0	217.6

  Notes:

  1 Please note that in 1999-2000 this scheme was reported as two schemes, but it has now been consolidated into one due to a combined procurement process.

QUEENS MEDICAL CENTRE, NOTTINGHAM UNIVERSITY

  Earlier cost estimates had been based on the Public Sector Comparator. The PFI scope is extended in line with the trusts capital development plans following private sector innovation. It now includes a private patients unit, relocation of the maxilofacial services and retain facilities. This figure includes £1.4 million to be funded at the operational phase by non-SPV sources and the value of land to be disposed.

A	B	C	D	E	F
Region	Capital cost at OBC stage	Capital cost reported last year	Capital value this year	% change since OBC stage	% change since last year
	£m	£m	£m
EASTERN REGION
Norfolk & Norwich Health Care NHS Trust Note 1	122.9	143.5	158.0	29	10
Luton & Dunstable Hospital NHS Trust Note 2	6.9	14.7	14.7	113	0
Essex & Herts Community NHS Trust	11.9	11.4	10.4	--13	--9
East Hertfordshire NHS Trust	10.0	10.0	10.0		0
Total Eastern		179.6	193.1

Comments on any increases over 10 per cent

  Note 1: OBC based on a bed compliment of 709 and FBC on 809. An additional 144 beds have been approved in 1999-2000 bringing the total compliment to 954.

  Note 2: The scope of the original project was extended to include the provision of staff accommodation at an approximate capital cost of £7 million. The remaining increase is due to indexation.

London

A	B	C	D	E	F
Region	Capital cost at OBC stage	Capital cost reported last year	Capital value this year	% change since OBC stage	% change since last year
	£m	£m	£m
LONDON REGION
Barts & the London NHS Trust	620.0	250.0	620.0	0.0	148.0
University College London Hospitals NHS Trust	115.0	160.0	347.0	201.7	116.9
Havering Hospitals NHS Trust	145.6		146.5	0.6
Bromley Hospitals NHS Trust	112.1	117.9	117.9	5.2	0.0
Greenwich Healthcare NHS Trust	57.1	93.0	96.1	68.3	3.3
King's Healthcare NHS Trust	77.2	64.0	75.5	--2.2	18.0
Barnet & Chase Farm Hospitals NHS Trust	54.0	54.0	54.0	0.0	0.0
St. George's Healthcare NHS Trust	31.4	40.0	45.7	45.5	14.3
West Middlesex University NHS Trust	38.2	33.0	38.2	0.0	15.8
The Whittington Hospital NHST Trust	23.0		23.0	0.0
South West London Community NHS Trust	20.5		20.5	0.0
Newham Healthcare NHS Trust		20.0	20.0		0.0
Oxleas NHS Trust	14.3	15.0	14.5	1.4	--3.3
Newham Community Health Services NHS Trust	12.7	14.5	12.1	--4.7	--16.6
Parkside Health NHS Trust	11.0	11.0	11.9	8.2	8.2
Redbridge Health Care NHS Trust	7.6	10.4	10.4	37.4	0.0
London Total	1,339.7	882.8	1,653.3

Comment on any increases over 10 per cent

BARTS AND THE LONDON

  The capital cost reported last year relates to the earlier OBC approval which related to the closuse of Barts and the development of the Royal London. The scheme has reached preferred PFI partner staus and was working towards FBC. The Turnberg Review of Health Services in London set out a very different option for the Trust which included the retention of Barts and additional beds. The OBC for the current scheme was approved by the RO in February 2000. The approved capital cost was £462 million which included IM&T costs of £25 million for which a separate OBC is being prepared. The capital cost identified above is an estimate of the capital cost to the private sector of the project which includes an estimate of building price inflation over the 10 year implementation period of the project shown in the OBC. This may well decrease if a private sector partner is able to substantially decrease the implementation period.

UNIVERSITY COLLEGE HOSPITALS NHS TRUST

  The capital cost reported last year relates to the proposed scheme based on a 1996 tender. The cost of the scheme has increased due to a number of factors—inflation, additional facilities with in the scheme. The capital cost indentifed above is an estimate of the capital cost to the private sector if the project which includes debt servicing and professional design costs. The PFI scheme, which came forward in October 1997, differed radically from the solution identified in the OBC (March 1995) in that it proposed a single site solution comprising a high rise ward block linked to a lower rise podium block, rather than a four site solution.

  The service and revenue advantages of a single site, all new build, hopsital offset the high construction costs. The trust has undertaken several cost reduction exercises and the consortium price properly reflects the location and type of scheme.

  The scheme has changed significantly in scale and cost. Increases in cost can be broadly attributed to inflation costs, land acquisition costs and additonal facilities not within original scheme (as well as debt service costs).

  The increased cost is primarily due to some cost increases on the part of the consortium which have not been passed through to the NHS through increases in the unitary tariff—a practical demonstration of risk transfer to the private sector.

ST GEORGE'S HEALTHCARE NHS TRUST

  The OBC was produced in 1995 and the capital cost of the preferred option was £31.4 million.

  The capital value this year is the capital cost of the PFI option at financial close.

  The PFI Capital cost does reflect the provision of additonal clinical accommodation for futre flexibility—two shelled operating theatres and two additional ITU beds over the PSC. The latter is wholly at the risk of the private sector.

WEST MIDDLESEX UNIVERSITY HOSPITAL NHS TRUST

  The costs shown above do not include refurbishment of existing buildings on the site.

REDBRIDGE HEALTHCARE NHS TRUST

  The OBC was approved in February 1997. The scope of the Case was only for adult acute wards. EMI provision and a PICU. There have been three key changes in the project scope since OBC approved—a day hospital for older people has been included in agreement with the (then) North Thames RO in 1998; a change in the clinical model of care which has meant the inclusion of additional therapy space and an increase in the floor are of the scheme to ensure that there will be compliance with Government policy on single sex segregation. A further driver has been the effect of inflation. This has increased the cost of the Public Sector Comparator from £7.4 million at 1997 prices to £11.89 million at 1999 prices.

  The capital value reported this year and last year is shown as being the capital value to the PFI Partner which has stayed broadly constant at £10.44 million.

South East

A	B	C	D	E	F
Region	Capital cost at OBC stage	Capital cost reported last year	Capital value this year	% change since OBC stage	% change since last year
	£m	£m	£m	£m
SOUTH EAST REGION
Dartford & Gravesham NHS Trust	96.0	94.0	94.0	--2.1	0.0
Portsmouth Hospitals NHS Trust1			75.0
Oxford Radcliffe Hospitals NHS Trust2			71.0
South Buckinghamshire NHS Trust		45.1	45.1		0.0
West Berkshire Priority Care Services NHS Trust (Fairmile Scheme)	29.4	29.4	29.7	1.0	1.0
Stoke Mandeville Hospital NHS Trust	23.7	23.7	23.7	0.0	0.0
Nutfield Othopaedic Centre NHS Trust	23.6		23.6	0.0
Sussex Weald & Downs NHS Trust	17.0	17.0	19.9	17.1	17.1
Northampton Community Healthcare NHS Trust	19.8		19.8	0.0
Southampton Community Health Service NHS Trust	16.9	18.0	18.0	6.5	0.0
West Berkshire Priority Care Services NHS Trust (Newbury Scheme)	18.0	18.0	18.0	0.0	0.0
Surrey Hampshire Borders NHS Trust (Farnham Scheme)	15.0	15.0	18.0	20.0	20.0
Portsmouth Healthcare NHS Trust	8.3	11.0	12.0	44.6	9.1
Thames Gateway (Sheppey Community Hospital)3	10.0	10.0	12.5		25.0
Total South East		281.2	480.3
1  Portsmouth Hospitals have not yet an OBC approved. SOC was approved for £75 million. 2  Oxford Radcliffe Hospitals have not yet had an OBC approved. SOC was approved for £71 million.

Comment on any increases over 10 per cent:

Sussex Weald & Downs—construction cost remains £17 million. £19.9 million includes fees and equipment.

Surrey Hampshire Borders—increase due to building inflation.

Portsmouth Healthcare—Changes since OBC to reflect Patient's Charter requirements, single sex ward and NSF requirements.

Thames Gateway NHS trust—the increase is due to building inflation and changes to the output specification from clinical practice.

South West

A	B	C	D	E	F
Region	Capital cost at OBC stage	Capital cost reported last year	Capital value this year	% change since OBC stage	% change since last year
	£m	£m	£m
SOUTH WEST REGION
Swindon & Marlborough NHS Trust		96.3	96.3		0.0
Gloucestershire Royal NHS Trust			32.0
Exeter & District Community Health Service NHS Trust			10.5
Cornwall Healthcare NHS Trust			10.2
Total South West		96.3	149.0
West Midlands
	B	C	D	E	F
Region	Capital cost at OBC stage	Capital cost reported last year	Capital value this year	% change since OBC stage	% change since last year
	£m	£m	£m
WEST MIDLANDS REGION
Walsgrave Hospitals NHS Trust	178.0	180.9	178.0	0.0	--1.6
Worcester Royal Infirmary NHS Trust	64.3	86.6	86.6	34.8	0.0
Dudley Group of Hospitals NHS Trust	67.7	67.7	67.7	0.0	0.0
Hereford Hospitals NHS Trust	44.1	64.1	64.1	45.4	0.0
City Hospital NHS Trust	19.1		22.1	15.7
North Staffordshire Combined Healthcare NHS Trust	19.1	19.2	19.2	0.5	0.0
The Royal Wolverhampton Hospitals NHS Trust	10.9	12.5	10.9	0.0	--12.8
Northern Birmingham Mental Health NHS Trust	15.9	12.3	12.3	--22.6	0.0
Total West Midlands		443.3	460.9

Comment on any increases over 10 per cent:

  Both Worcester and Hereford's preferred solutions at OBC included a large amount of refurbishment.

  The decrease to the scheme value at Royal Wolverhampton is because the value given in the last Health Committee report.

North West

A	B	C	D	E	F
Region	Capital cost at OBC stage	Capital cost reported last year	Capital value this year	% change since OBC stage	% change since last year
	£m	£m	£m	£m
NORTH WEST REGION
Central Manchester Healthcare & Manchester Children's NHS Trusts		127.0	199.0	36.2	56.7
South Manchester University Hospitals NHS Trust		65.6	65.6	0.0	0.0
New Schemes
Blackburn Hyndburn & Ribble Valley			70.3
Burnley Health Care NHS Trust			13.7	100.0
Total North West		192.6	348.6

Comment on any increase over 10 per cent:

Central Manchester/Manchester Childrens Trusts

The scheme costs have increased for the following reasons:

  (a)  Health Authorities requirements in terms of the finctional content of the scheme have increased, principally around a 30 per cent increase in children's activity and renal and cardiac services being brought into the scheme.

  (b)  There have been unforseen infrastructure and site problems;

  (c)  The new costings take into account building inflation, post SOC.

4.8  LONG TERM CAPITAL PROJECTS AND PFI

  (v)   Could the Department provide data on the revenue consequences of schemes which have reached financial close and represent long term contractual commitment over the next 25 hears? Could the Department provide an update of the Departmental Report table showing the source and applications of HCHS capital, giving the outturn position for 1999-2000?

  11.  The information requested is contained in the following tables.