SECTION 1: EXECUTIVE SUMMARY 1 SECTION 2: THE STRATEGIC CASE & ORGANISATIONAL OVERVIEW STRATEGIC CONTEXT BUSINESS NEEDS 3 2.

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1 NEW ADMINISTRATION (OFFICE) BLOCK Re provision of Office Space for New South Glasgow Hospitals Staff FULL BUSINESS CASE December 2013

2 TABLE OF CONTENTS: SECTION 1: EXECUTIVE SUMMARY 1 SECTION 2: THE STRATEGIC CASE & ORGANISATIONAL OVERVIEW STRATEGIC CONTEXT BUSINESS NEEDS OTHER ORGANISATIONAL STRATEGIES INVESTMENT OBJECTIVES EXISTING ARRANGEMENTS BUSINESS STRATEGY AND AIMS DEPENDENCIES AVAILABLE SITES TIMESCALE STRATEGIC RISKS CONSTRAINTS & DEPENDENCIES 15 SECTION 3: THE ECONOMIC CASE SECTION OVERVIEW CRITICAL SUCCESS FACTORS SHORT LISTED OPTIONS REVISITED BENEFITS APPRAISAL PREFERRED OPTION 19 SECTION 4: THE COMMERCIAL CASE SECTION OVERVIEW REQUIRED SERVICES RISK AND THE COMMERCIAL FRAMEWORK CHANGE CONTROL PROCEDURES OPEN BOOK PHILOSOPHY 22 SECTION 5: THE FINANCIAL CASE OVERVIEW CAPITAL REQUIREMENTS ASSUMPTIONS USED IN CALCULATING CONSTRUCTION COSTS RISK REGISTER CAPITAL FUNDING REVENUE IMPACT REVENUE AFFORDABILITY IMPACT ON BALANCE SHEET 25 SECTION 6: THE MANAGEMENT CASE PROJECT MANAGEMENT CHANGE MANAGEMENT RISK MANAGEMENT POST PROJECT EVALUATION 31 APPENDIX 1: FB1 FORM 34 APPENDIX 2: SCHEDULE OF ACCOMMODATION 36 APPENDIX 3: WORKSTATION/STAFF RATIOS 40 APPENDIX 4: DESIGN STATEMENT 41 APPENDIX 5: AEDET 60 APPENDIX 6: METHODOLOGY FOR THE INITIAL BENEFITS ANALYSIS 61

3 APPENDIX 7: RISK REGISTER 63 APPENDIX 8: GENERAL ARRANGMENTS 71

4 SECTION 1: EXECUTIVE SUMMARY This Full Business Case (FBC) provides NHS Greater Glasgow and Clyde proposals to reprovide administration support facilities currently on the Western Infirmary, Victoria Infirmary, parts of the Southern General and Yorkhill Hospital sites which will close following the transfer of services to the New South Glasgow Hospitals in The New South Glasgow Hospitals are comprised of a new build 1,109 bedded adult hospital and new 256 bedded children s hospital on the Southern General Campus. This will achieve the gold standard triple co location 1 of adult, maternity and children s services. The new hospitals will be operational in 2015 and there will be a total of 10,000 staff based on the Southern General Campus. Between the Western Infirmary, Yorkhill Hospital, Victoria Infirmary and those parts of the Southern General transferring to the new adult and children s hospitals there is an objective to re provide 1,200 workplaces on the Southern General Campus. The two options to re provide this administrative support were provided in the Outline Business Case submitted to, and approved by the Capital Investment Group; these were to either refurbish the retained estate or to build a new office building. For this Full Business Case the option appraisal undertaken at Outline Business Case was reviewed and the outcome is that a New Administration (Office) Block remains the preferred option for the following reasons. The preferred option will provide: A 21 st century office to support staff in carrying out their duties efficiently and effectively; A modern, fit for purpose, high technological environment with access to natural daylight; Excellent co locations of specialty teams enhancing communication and encouraging more collaborative cross functional working; A facility which will meet the needs of staff providing: work space, access to Wi Fi, quiet space to facilitate confidential conversations, meetings rooms and space for social interaction and rest; and An eco efficient facility aiming for BREEAM excellence which will contribute to the Health Board meeting the national HEAT target in reducing carbon emissions. The anticipated completion of the New Administration (Office) block is in April 2015 and will mean that the facility will be open to support staff migrating to the New South Glasgow Hospitals. 1 Triple co location of adult, maternity and children s services means that babies requiring paediatric specialist care and mothers requiring other acute adult specialist care can access these services immediately as they are located on the same campus

5 The only currently logistically available site on the Southern General campus for this facility is the area previously occupied by Mental Health Services which have re located to the Leverndale site. Part of the site is assigned to a new Teaching and Learning Facility. However, there is sufficient space available behind the Teaching and Learning Facility to develop the proposed New Administration (Office) Build. The location of the building will allow staff providing clinical services in the New South Glasgow Hospitals close proximity to their administration support workspace. The total development cost of the New Administration (Office) Block development is m. Through the effective management and mitigation of risks associated with the design and construction of the adult and children s hospitals and laboratory facilities, it has now been confirmed that the m capital cost of the New Administration (Office) Block can be accommodated from within the New South Glasgow Hospitals project budget of 841.7m. This proposal was discussed and supported at the Acute Services Strategy Board in November Furthermore, the NHS Greater Glasgow and Clyde Health Board approved the Full Business Case at its meeting on 17 th December Summary of Key Dates A summary of the key project dates is provided in the table below: Table 1 Projected Dates for New Administration (Office) Block Planning Approval granted 12 th December 2013 FBC approval CIG 28 th January 2014 Anticipated Construction commencement 10 th February 2014 Anticipated construction completion 30 th April

6 SECTION 2: THE STRATEGIC CASE & ORGANISATIONAL OVERVIEW 2.1 STRATEGIC CONTEXT NHS Greater Glasgow and Clyde (The Board), serves a population of 1.2 million people, employs 38,000 staff and has annual budget of 2.9 billion. The Board provides a wide range of services to the local population of Glasgow and Clyde and also regional and national services. Glasgow s Acute Services are delivered from ten major hospitals, three of which lie within Clyde and the remaining seven are located within Glasgow itself. Following an Acute Services Review (ASR) of Glasgow acute clinical services, two new Ambulatory Care Hospitals have been built in the North and South of the city at the Stobhill Hospital and Victoria Infirmary site respectively. These represent Phase 1 of the ASR and opened in Phase 2 of the ASR is well underway with the investment of 842m in a new laboratory building (opened March 2012), and a new 1,109 bedded adult hospital and 256 bedded children s hospital all on the Southern General Campus. This will achieve triple co location of adult, maternity and children s services. The new hospitals will be operational in 2015 and there will be a total of approximately 10,000 staff based at the New Southern Campus. 2.2 BUSINESS NEEDS The proposed project is to re provide 1,200 work desks, 110 flexible working spaces and associated support facilities with ease of access to the New South Glasgow Hospitals for staff transferring to the Southern Campus and staff in exisiting Southern estate moving to the new adult hospital. A benchmarking exercise has taken place to identify the working practices of clinicians and their requirements for workspaces, environment, design and also the layout of other recent office facilities provisions in terms of what has worked well and what has worked less well. The design review included reference to other NHS organisations, such as Forth Valley Health Board and the Birmingham Queen Elizabeth Hospital, as well as the newly designed Glasgow City Council offices (Tomorrow s Office), the reconfigured PricewaterhouseCoopers offices in Glasgow, and the new build Roselyn Institute. Interviews with the New South Glasgow Hospitals Project Nurse Adviser and Associate Medical Director were undertaken to identify the potential needs required by doctors and nurses from their workspace and supplemented by information from the benchmarking hospitals

7 In brief, the key needs were identified as follows: Quiet space to facilitate concentration, especially if reviewing and synthesising multiple results and complex treatment plans; Need for personal desk space; Ability to have confidential conversations, telephone or face to face; Facility to have impromptu meetings with colleagues (some may be confidential); A place to re group and be away from other people, space to think and reflect; A place to have social interaction; A space to meet with relatives if necessary; and Location close to clinical work and secretary. These key needs were incorporated into the project scope for the 1200 work desks and associated facilities. The scope of the project is based on an open plan configuration with breakout spaces for 2 or 3 person meetings or confidential phone calls or dictation, access to kitchenette and seating areas, flexible use of areas, access to natural light, good acoustics, and centralised waste and storage. The total area is 8,624m 2 Gross Internal Floor Area (GIFA). The Schedule of Accommodation is given in Appendix 2. Ratio of Staff to Workspace It was recognised that some staff who require workspace spend a high percentage of their time in direct clinical care and therefore require access to a workspace for only a proportion of their time/working shift. On this basis, some disciplines of staff have been allocated a workspace using a ratio of staff to desks. The ratios are given in Appendix 3. Further work is taking place with the Clinical Directorates to look at co location of clinical specialty teams within the New Administration (Office) Block and, once confirmed, to allocate individual workspaces to staff. 2.3 OTHER ORGANISATIONAL STRATEGIES The proposal for office re provision supports the Board s Acute Services Strategy to consolidate the number of inpatient hospitals. The open plan office space will support the drive to integrate teams, encourage collaborate working within and between specialty teams which in turn will enhance the patient service. Finally, the preferred option as described in this business case will, along with the new hospitals and new teaching and learning facility, provide an attractive working environment which will support staff recruitment. 2.4 INVESTMENT OBJECTIVES The investment to re provide administrative support facilities has a number of key objectives which can be presented in the broad categories of: 4 7 3

8 Supporting clinical staff in execution of their duties; Enhanced communication and collaboration through co location of teams; Support the clinical migration; Support staff in their clinical duties through reduction in travel time between the clinical workplaces and admin workspaces; Provides eco efficient facility (as described in the table below); Meet national guidance (The national guidance considered was Scottish Health Planning Note 03; and Reference to What Can We Do With The Office published by Scottish Futures Trust

9 These investment objectives are described in more detail in the table below, along with how they will be measured. Primary Objective Secondary Objective Measure: Timetable Supporting clinical staff in execution of their clinical duties. To support the clinical migration. Enhanced communication and collaboration through co location of teams. Access to an IT enabled workstation. Fit for purpose accommodation providing access to Wi Fi, break out spaces/private spaces for meetings, confidential conversations/telephone calls, dictation, natural light and security and kitchenette and seating areas. Provides an environment which gives staff a positive experience, an environment they can be proud of and enjoy working in. Support the clinical migration of clinical services from the Western Infirmary, Victoria Infirmary, Yorkhill Hospital and parts of the Southern General into the New South Glasgow Hospitals. Enable the migration programme to be a short as possible by providing administration support facilities for migrating staff. Provide flexibility in the order of hospital site transfers. Provision of accommodation which allows good communication and collaboration both within teams and between teams, with ability for team numbers to flex up and down Availability of 1,200 IT enabled workstations. Presence of Wi Fi, break out spaces. Staff satisfaction surveys. Monitor staff attendance. Admin support facilities in place to support the move of each transferring hospital site. Programme of migration is achieved as planned during summer/autumn Programme of moves is predicated by clinical requirements rather than availability of admin support accommodation. Achieve open plan configuration of workspaces allowing integration. 6 months from opening. 18 months from opening. June December December months from opening. Provides eco efficient Efficient use of energy. Achieving BREEAM Excellent 18 months from opening.

10 Primary Objective Secondary Objective Measure: Timetable facility. Support clinical staff in their duties through reduction in travel time between the clinical workplace and admin workspace. Meet national guidance. Aim for BREEAM Excellent. Contribute to the Board meeting the National HEAT Target E8.1 and E8.2, reduction in Carbon emissions to contribute to the greenhouse gas emissions reduction targets set in the Climate Change (Scotland) Act Contribute to the Board meeting the National HEAT Target E5.1 and E8.2 target, NHS Boards to operate within their agreed revenue resource limit; operate within their capital resource limit; meet their cash requirement. Achieve short travel time between the clinical workplace and admin workspace thereby reducing time in transit and increasing time at the bedside. National guidance for new office facilities; Accreditation. Achieve an operational target of 80KG/CO 2 /per sq meter per annum target or lower. Reduce revenue implications of operating admin support facilities, achieve projected running costs. Staff satisfaction surveys. Monitor staff complaints. Achieving; Flexible working and desk sharing (See Appendix 3). Space efficiency. More energy efficient lighting, heating, ventilation. Cellular and open desk plan. Efficient storage practices. Maximise use of technology, 18 months from opening. 18 months from opening

11 Primary Objective Secondary Objective Measure: Timetable moving to paper lite. Embrace new ways of working. Rationalised copying and printing. Other national guidance. Aim for a BREEAM Excellence rating. Meet statutory obligations for DDA, HEI, HAI. Achieve a high design quality in accordance with the Board s Design action Plan. 12 months from opening. The objectives for design, quality and sustainability are described in more detail below

12 Design The building design will deliver the following: Achieve a high design quality in accordance with the Board s Design Action Plan, Design Statement and guidance available from Heath Facilities Scotland; Meet statutory requirements and obligations for public buildings e.g. with regards to Disability Discrimination Act (DDA), Health Environment Inspectorate (HEI), Healthcare Associated Infections (HAI); and Seek to target a Building, Research, Establishment, Environmental, Assessment, Method (BREEAM) rating of Excellent. Sustainability Sustainability Objective NHS Greater Glasgow & Clyde is committed to the Scottish Government s purpose, (Scottish Planning Policy: Sustainability & Planning): to focus government and public services on creating a more successful country, with opportunities for all of Scotland to flourish, through increasing sustainable economic growth. Sustainability is a key investment objective for the new Re Provision of Office Space and a BREEAM Assessor has been appointed to the PSCP team. This appointment was made at an early stage of the design process in order to help deliver the best value BREEAM rating. These projects will be assessed under BREEAM 2011, which requires approximately a 5 10% increase in BREEAM 2008 to achieve a similar score under BREEAM 2011, i.e. a score of 70% under BREEAM 2011 would equate to around 80% under BREEAM The BREEAM Assessor has taken a proactive approach by meeting with members of the core project team, individually, to offer clarity around the duties of each professional discipline together with the NHS GG&C duties such as ensuring stakeholder participation. The BREEAM Accreditation will be assessed against the following categories: Management; Health & Wellbeing; Energy; Transport; Water; Materials; Waste; Land Use and Ecology; Pollution; and Innovation

13 NHS Greater Glasgow & Clyde has taken cognisance of the principles laid down both locally and nationally for the promotion of sustainability. Due regard is being given to the framework set out in A Sustainable Development Strategy for NHS Scotland. The building will: Deliver an energy efficient facility within the NHSGG&C estate, reducing CO 2 emissions and contributing to a reduction in whole life costs; Target 6 credits under Ene 01 required to achieve BREEAM Excellent this would provide a standard that will have a reduction in carbon emission levels 25% lower than a building satisfying the English Building regulations (all Scottish buildings must be tested against English methodology); and Demonstrate the commitment of NHSGG&C to reducing the environmental impact of its operations. Quality Strategy The Healthcare Quality Strategy for Scotland published in May 2010 set out the three Quality Ambitions for NHS Scotland. Mutually beneficial partnerships between patients, their families and those delivering healthcare services which respect individual needs and values and which demonstrate compassion, continuity, clear communication and shared decision making; There will be no avoidable injury or harm to people from healthcare they receive, and an appropriate, clean and safe environment will be provided for the delivery of healthcare services at all times; and The most appropriate treatments, interventions, support and services will be provided at the right time to everyone who will benefit, and wasteful or harmful variation will be eradicated. In order to support these ambitions, NHSGG&C aspires to promote clinical excellence, by offering an environment which provides the opportunity for different specialty teams to integrate and communicate through the open plan design of the office space. Design Quality Objectives NHS GG&C is committed to the integration of design quality in the re provision of office space. A Design Statement has been prepared and signed off in consultation with the key project stakeholders. The Design Statement sets out in detail the specific objectives to be achieved and sets out a series of key, non negotiable performance criteria related to staff. It defines benchmarks for how the design will help to deliver these objectives

14 The Design Statement is attached at Appendix 4. The design statement is a key briefing document for the Design Team and has been used to inform the more detailed briefing documents such as the Schedules of Accommodation, key adjacencies and Room Data Sheets. The Project will use the Achieving Excellent Design Evaluation Toolkit (AEDET) to assess design quality throughout the procurement process. The initial AEDET Assessment has been carried out based on the current design and is attached as Appendix EXISTING ARRANGEMENTS To support their clinical work senior members of staff, heads of departments and medical staff have offices/workstations from which they review patients and digest patient notes and test results, devise complex treatment plans, undertake clinical decisions, dictate correspondence, and make phone calls etc. Many of these facilities have been accommodated within Victorian buildings close to clinical services and few were designed to meet their current use. With the migration of services in 2015 from the Western, Victoria and Yorkhill sites, and parts of the Southern General, into the New South Glasgow Hospitals there is a requirement to replace these administration support facilities. 2.6 BUSINESS STRATEGY AND AIMS On completion of the New South Glasgow Hospitals build in 2015 the objective will be to transfer clinical services from the four transferring sites as efficiently and economically as possible. This will minimise double running costs and disruption, and maximise the warranty of equipment and buildings. In developing the Outline Business Case, two options for the re provision of administration support were explored, that of: Option 1 use of the retained estate most of which has reached the end of its economic lifespan, for example some estate dates back to the 1870 s while others are of a prefabricated nature from the 1960 s and 1970 s. The retained estate option will require the current clinical services in these buildings to transfer into the New South Glasgow Hospital before refurbishment can take place; refurbishment will take more than 12 months to complete. This would mean that either the migration programme is delayed or, more likely, that the clinical services transfer from the Western, Victoria and Yorkhill sites but that staff will need to travel back and forth between the New South Glasgow Hospital campus and their original hospital base (i.e. Victoria Infirmary, Yorkhill Hospital, Western Infirmary) to access office space until the refurbished office accommodation on the New Southern campus is available. The potential costs of this were described in the Outline Business Case

15 Option 2 a new build Administration (Office) Block. In more detail, the key features of the New Administration (Office) Block option are as follows: Multi occupancy (6 person, 12 person or 18 person) cellular offices for clinical staff; Open plan seating for support/other staff; Desk spaces and touch down spaces; Paper lite access to Wi Fi; Break out spaces/private spaces for meetings, confidential conversations/telephone calls, dictation quiet rooms and breakout areas; and Kitchenette and seating areas. The above layout will provide a flexible design allowing excellent co locations both within, and between, specialty teams. The floor plan has been developed to support open plan working, and has the ability to accommodate changing group sizes, dynamics and structures. It also supports and encourages more collaborative, integrated and cross functional activity. Different types of office desking are planned, each space reflecting the requirements of different work styles. The principal work areas will have contact with natural daylight either from windows or from the proposed internal light wells. External views will be provided where possible with effort to maintain transparency with the use of glazed partitioning. The interior environment will be functional and relaxing. This will be achieved through the use of colour, texture and detailing of all finishes. In the Outline Business Case the preferred option was identified as the New Administration (Office) Block. As part of the development of the Full Business Case, this option appraisal has been revised to ensure that there are no changes since the Outline Business Case. The results of the review are given in sections 3.3 and confirm that the New Administration (Office) Block remains the preferred option. 2.7 DEPENDENCIES AVAILABLE SITES Limited land is available on the Southern General Campus; therefore options for siting the New Administration (Office) Block are restricted. However, there is space on the current site of the Mental Health Building next to the planned Teaching and Learning Facility to provide a new 8,624m 2 (GIFA) Administration (Office) Block as shown in the visual below

16 13 7 3

17 2.8 TIMESCALE The anticipated construction period is fourteen months indicating a commencement date during the 1 st quarter of 2014 to allow completion and handover on 30 th April 2015, thereby enabling the clinical migration to the New South Glasgow Hospitals in summer STRATEGIC RISKS The main project risks and mitigation factors were identified as below: Description Business Risks Financial Regulation Environmental Quality Procurement method Organisational Service Risks Technical Cost Programming Operational support Resource Mitigation Robust business case & procurement process. Encompass current legislation. Early sustainability briefing and Planning consultation. Detailed briefing & monitoring. Adopt NHS Framework Scotland. Agreed early project management framework and delegated authority limits. Employ strict change control management processes. Employ strict change control management processes. Employ strict change control management processes. Control service User input effectively. Adequate resources have been identified and dedicated team aligned. External Environmental Risks Ground Conditions Comprehensive site investigations have already taken place for the Teaching and Learning Facility which is currently being built within the same site. Neighbouring Disturbance Manage with appropriate communication

18 2.10 CONSTRAINTS & DEPENDENCIES Constraints Land availability Programming & Site Conditions Planning Approvals Design Quality Sustainability The re provided offices must be located within the boundary of the exiting Southern Campus and close to the New Children s and Adult Hospitals. The only land available on site for a new office block is located behind the New Teaching and Learning Building. Maintaining vehicular access and egress during the course of construction to the all existing services within Southern General Campus ensuring continuity of clinical service. Ongoing liaison with Glasgow City Council Planning Department has taken place and Planning Approval was granted on 12 th December Achieve a minimum target score of 4/6 in the AEDET categories under the AEDET review process. Aim to achieve BREEAM Excellent for the new build. Dependencies As described above limited land is available on the Southern General Campus; therefore options for siting the new office block are restricted. However, there is space on the current site of the Mental Health Building next to the planned Teaching and Learning Facility to provide a new circa 8,624m 2 (GIFA) Administration (Office) Block

19 SECTION 3: THE ECONOMIC CASE 3.1 SECTION OVERVIEW In accordance with the Scottish Capital Investment Manual (SCIM) and the requirements of HM Treasury s Green Book (A Guide to Appraisal in the Public Sector), this section of the Full Business Case (FBC) documents the process and provides evidence to show that the selection of the preferred option is derived from most economically advantageous option, whilst best meeting the service needs and optimising value for money. 3.2 CRITICAL SUCCESS FACTORS The critical success factors were explored as part of the way forward during the initial stages of developing the strategy for the re provision of office spaces for New South Glasgow Hospitals staff. These critical success factors were revised during the preparation of the FBC and these remain valid, and are listed below: Critical Success Factor (CSF) CSF 1: Business Needs CSF 2: Strategic Fit CSF 3: Value for money CSF 4: Potential Achievability CSF 5: Supply Side Capacity & Capability CSF 6: Potential Affordability CSF 7: Timescale Broad Description Must meet NHS Greater Glasgow & Clyde s investment objectives (Acute Strategy Review), related business needs and service requirements. Must support the New South Glasgow Hospitals in providing fit for purpose support accommodation for staff to undertake work to support the clinical services provided to patients. Must deliver value for money in terms of providing improved accommodation, which is sustainable with a low carbon footprint, efficient running costs and co location with the New South Glasgow Hospitals for easy access of staff. NHS Greater Glasgow & Clyde Project Board must have the appropriate governance structures in situ and a Project Team with the necessary level of skills (capacity and capability) to deliver the project and manage any associated risks. The scheme must support the staff in delivering their clinical services. Must meet Greater Glasgow & Clyde s ability to fund the required level of capital and revenue expenditure. Construction must be completed by April 2015 in order to assist in the migration which is planned to take place May to September

20 3.3 SHORT LISTED OPTIONS REVISITED The short listed options are described under Section 2.6 (Business Strategy and Aims); in brief, the numbers of options are limited as the re provided support accommodation must be on the Southern Campus to support staff who will be working in the New South Glasgow Hospitals. The options were: 1. Option 1 Refurbished Estate (Do Minimum) to accommodate the staff administration support areas and; 2. Option 2 New Administration (Office) Block. The preferred option remains Option 2, a New Administration (Office) Block In terms of the New Administration (Office) Block, the only land available for the preferred option on the Southern General campus is next to the New Teaching and Learning Facility which is adjacent to the New South Glasgow Hospitals. There is no other land of the required footprint available on the Southern General campus until late BENEFITS APPRAISAL As part of the Outline Business Case a benefits appraisal of the two options, Option 1 and Option 2 above, was undertaken. Detail of the methodology used is given in Appendix 6. As part of the development of the Full Business Case the benefits appraisal has been revised by the core Project Team and the Medical and Nursing adviser. The outcome of the benefits appraisal remains unchanged with the New Administration (Office) Block perceived to be significantly more able to provide the required benefits (970) compared to the option of using the retained estate (375)

21 BENEFITS APPRAISAL Benefit Criteria Weight Option 1: Retained Estate Score Weight X Score Option 2: New Office Block Score Weight X Score Provision of an administrative workspace to support staff in carrying out their clinical duties Provides fit for purpose accommodation e.g. quiet spaces, break out areas Supports the clinical migration of clinical services from the 4 transferring sites Allows good communication and co location of team members and between teams Provides efficient sustainable accommodation minimising ongoing revenue costs, for example heat, light & power Allows rapid access to admin workspace from clinical work area, reducing travel time between clinical area and workspace Meets national guidance TOTAL

22 3.5 PREFERRED OPTION As described in Sections 3.4 the key benefits of the project are to provide a fit for purpose modern facility to support clinical and non clinical staff in carrying out their duties, to facilitate the clinical migration into the New South Glasgow Hospitals, and provide cost effective, sustainable facilities. The New Administration (Office) Block Option will deliver all of the above and, in addition, the open plan nature of the New Administration (Office) Block will facilitate staff interaction and mixing within and between specialty teams from the four transferring sites. Finally, the planned location of the new office facility near the New South Glasgow Hospitals will minimise travel time between the clinical work area and administration support work area. For these reasons, as mentioned previously, the preferred option for the scheme is a new build Administration (Office) Block Facility on the site of the Mental Health Building on the Southern General campus

23 SECTION 4: THE COMMERCIAL CASE 4.1 SECTION OVERVIEW NHS Greater Glasgow and Clyde will, subject to receiving approval from Capital Investment Group (CIG) to proceed, enter into a contract with Bam Construction Limited for the total construction cost of the New Administration (Office) Block. NHS Greater Glasgow and Clyde will be responsible for managing all commercial transactions made to Bam Construction Limited for the construction of the New Administration (Office) Block. The design and construction of the New Administration (Office) Block will be procured under Frameworks for Scotland. This Framework is founded on collaborative working principles and the New Engineer & Construction Contract (NEC3) Option C NEC3 Form of Contract is used to support these principles. As noted above, the mechanism for ensuring that this partnership ethos is carried through to the construction of the new facility is through the use of the NEC3 Form of Contract. 4.2 REQUIRED SERVICES NHS Greater Glasgow and Clyde has appointed external advisors who sit on the core team with the specific remit under Frameworks Scotland. This team will see the project through to completion: PSCP: Bam Construction Limited. PSC Project Manager: Currie & Brown UK Limited. PSC Cost Advisor: Sweett Group. PSC CDM Co ordinator: Sweett Group. 4.3 RISK AND THE COMMERCIAL FRAMEWORK The objective of performing a risk assessment is to: Allow the Board to understand the project risks and put in place mitigation measures to manage those risks; Assess the likely total outturn cost to the public sector of the investment option under consideration; and Ensure that the allocation of risks between the Board and the private sector is clearly established and demonstrated within the contractual structure. A risk may or may not occur and is defined as an event which affects the cost, quality or completion time of the project. There are a number of such events that could arise during the construction and commissioning of the new facilities. A full risk analysis was undertaken to identify and assess the impact of risks during all stages of the project. This comprised a series of reviews involving the core team comprising the PSCP, PSCs and the Board's client representatives

24 The first risk workshop was held on 3 rd July 2013 with a second risk scoring workshop held on 8 th August The final risk workshop was concluded on 1 st November 2013 and the agreed costed Target Price Risk Register is attached in Appendix 7. It has been fully developed with the PSCP which provides a clear picture of the expected risks and is reviewed regularly with the team. It should be noted that the risks associated with the preferred option, see Appendix 7, are reduced by the fact that the new build is on the same site as the new Teaching and Learning Facility and therefore ground conditions etc have already been fully investigated and are known. The key features of the NEC3 contract are: The parties are encouraged to work together as partners in an open and transparent approach and to ensure that this partnering ethos is maintained. There is a Gain/Pain share mechanism to act as an incentive to the delivery team, by rewarding good performance and penalising poor performance. A clear and transparent system is on the table to enable negotiation to take place on prices. A level of price certainty is determined. All price thresholds are set using quantitative risk analysis. An agreed Target Price approach. In accordance with the Frameworks Scotland guidance notes, NHS Greater Glasgow and Clyde and Bam Construction Limited (PSCP) act as joint owners of the Project Risk Register. The Board and its professional advisors have ensured that there is an appropriate allocation of risks between themselves and Bam Construction Limited. Risks are allocated to the party best able to manage the risk. Agreed risk allocations are within the costed Target Price Risk Register attached in Appendix 7. Risk Allocation Risk Category Allocation of Risk NHSGG&C Bam Construction Limited Design Development and Construction Transition and Implementation Town and Country Planning Building Control Site Conditions Adverse Weather Conditions * Performance for Delivery of the Project Operation of Site Postcompletion Revenue Cost Post completion Shared

25 Financing Legislative During the ongoing risk management workshops, allocation and ownership of risks will be reviewed during the construction phase against activity programme. *Adverse weather conditions are defined within the contract stage 4 construction contract. 4.4 CHANGE CONTROL PROCEDURES Change Control is not intended to prevent change but to ensure that all parties are in a position to make informed decisions based upon a position of certainty of commitment at all times and with a high degree of predictability of outcome. The change control process will manage the issuing, approving or rejecting of changes. This process will be managed by the Project Manager using the Contract Administration Toolkit proformas electronically on Asite and in accordance with the NEC3 contract terms. The NEC3 contract requires early and prompt consideration of any matters which may affect the price paid by the Board. The procedures detailed in this section will be used to control all changes or other events, which may arise during the construction stage of the project. Change may arise as a result of the following: Changes identified as a result of proposed responses to Requests for Information (RFI s); Changes initiated by the Design Team (and Project Manager) including drawing revisions and Provisional Sums; or Changes arising from NHSGG&C. The NEC3 Early Warning and Compensation Event procedures will be implemented in accordance with Frameworks Scotland procedures. 4.5 OPEN BOOK PHILOSOPHY A key principle of the NEC3 contract is the payment of Defined Cost and an open book accounting philosophy. These require a robust, reliable and transparent system to record staff time and manage the invoicing process. This allows the Cost Advisor not only to identify costs but also to establish that the costs have been properly expended on the project and that they are allowable under the NEC3 contract as defined under the schedule of cost components. Project costs must be referenced to items on the activity schedules with detail added against 5 main headings; labour; plant; materials; sub contractors; and preliminaries. Orders, deliveries, invoices for payment, external plant hires and sub contracts also have to be cross checked against Goods Received Notes. The target price is key to the cost operation of the contract and is detailed within the Financial Case

26 SECTION 5: THE FINANCIAL CASE 5.1 OVERVIEW The Outline Business Case (OBC) for the proposed New Administration (Office) Block on the Southern General Campus was submitted to the Capital Investment Group in October 2013 and subsequent approval to proceed to Full Business Case (FBC) was received on 14 th November The new facility will be procured using Frameworks Scotland. This procurement route is described in detail under the Commercial Case section of the FBC. 5.2 CAPITAL REQUIREMENTS The target capital costs shown below are derived from cost schedules produced by Bam Construction Ltd, our Principle Supply Chain Partners (PSCP). FB1 forms are included within the Appendices. The target capital cost together with equipment costs and fees associated with the New Administration (Office) Block is a total of m

27 5.3 ASSUMPTIONS USED IN CALCULATING CONSTRUCTION COSTS The target capital costs have been prepared by our PSCP, Bam Construction Ltd and include the following assumptions. The project is planned to commence construction in February 2014 with completion due in April A construction contingency allowance of 320k (excl VAT) is included within the construction costs provided by Bam Construction Ltd. No Demolition costs are required. The target price includes the cost of providing a link bridge connecting the New Administration (Office) Block to the New Adult and Children s Hospitals. 5.4 RISK REGISTER A fully costed risk register has been developed and applied to the capital costs as a result of reviews and workshops, which are described in further detail within Appendix 7, Target Price risk register. This approach is reflective of the inherent risk management processes within the NEC form of contract used under Frameworks Scotland and replaces an Optimism Bias allowance which previously would have been applied to the capital costs at FBC stage. 5.5 CAPITAL FUNDING Through the effective management and mitigation of risks associated with the design and construction of the Adult and Children s Hospitals and Laboratory Facilities, it has been confirmed that the capital costs of the New Administration (Office) Block can be funded within the New South Glasgow Hospitals project budget of 841.7m. This decision was supported by the Acute Services Strategy Board in November

28 5.6 REVENUE IMPACT The recurring revenue impact of the above investment is 1,103k. This comprises of deprecation on building and equipment of 577k and estate/facility costs of 526k. There are no additional staffing costs as staff will transfer from the existing facilities into the New Administration (Office) Block. The table below presents the profile of capital and revenue costs. New Build Option Capital & Revenue Spend Profile 2013/ / / /17 Total '000 '000 '000 '000 '000 CAPITAL COSTS Incl VAT Construction costs incl Risk & PSCP fees 1,861 16,710 1, ,601 Board's Advisor & Statutory Fees Risk Register Equipment Total Capital Costs 2,000 17,198 1, , / / / /17 Full yr REVENUE COSTS '000 '000 '000 '000 Depreciation on Building Depreciation on Equipment Depreciation on IT Equipment HL&P Rates Domestics Total additional recurring revenue costs , REVENUE AFFORDABILITY In revenue affordability terms, a significant element of the additional revenue costs relate to depreciation and were incorporated in the detailed analysis that was undertaken as part of confirming the overall revenue savings to be achieved as a result of the New South Glasgow Hospitals. As noted in the original Full Business Case, submitted in October 2010, the overall project presented recurring net revenue savings of 18.2m. It can therefore be confirmed that the New Administration (Office) Block is affordable in revenue terms. 5.8 IMPACT ON BALANCE SHEET The expenditure will be capitalised in the Board s Balance Sheet and will be recorded as a fixed asset on NHSGG&C s Fixed Asset Register in accordance with International Financial Reporting Standards (IFRS) and the requirements of the NHS Capital Accounting Manual. On completion, the new building will be subject to initial valuation by the District Valuer. In the likely event that the assessed value of the asset is less than the capital spend, an impairment value will be calculated. This impairment value will be communicated to the Scottish Government Health and Social Care Directorates and a request for funding made

29 This business case makes the assumption that funding will be granted by the Scottish Government for the full amount of impairment. The asset will subsequently be capitalised at the assessed value and depreciated over the useful life of the asset. During construction, the level of any potential impairment will be kept under regular review and updates will be provided to Scottish Government Health and Social Care Directorates as required

30 SECTION 6: THE MANAGEMENT CASE 6.1 PROJECT MANAGEMENT The new office building will be project managed through the project management arrangements for the New South Glasgow Hospitals Project. The management arrangements for the New South Glasgow Hospitals were originally detailed in the Full Business Case for the New South Glasgow Hospitals submitted to the Scottish Government in October The diagram below illustrates current approved arrangements. Governance Structure: Quality & Performance Group Acute Services Strategy Board: New Hospitals / Labs Acute Services Strategy Board: Executive Sub Group On The Move Programme Board Joint Project Steering Group Migration Executive Group (MEG) Clinical Executive Group (CEG) New Administration (Office) Block Children s Hospital Groups Adult Hospital Groups Teaching & Learning Facility Project Team Campus Co ordinating Group Project Management Group Commercial Group Construction Interface Group Art Group Joint Commissioning Group Medical Planning Groups IT Group Equipment Selection Group Communications & Marketing Group Hospital Construction Progress Group A dedicated Project Manager for the New Administration (Office) Block has been recruited. The skill base of the Project Manager leading the New Administration (Office) Block, reporting into the Project Director, includes: Experience of NEC3 and Frameworks Scotland contracting; Expertise in the complexities of working with multiple organisations and multi disciplines; Knowledge and experience of the SCIM and business Case approvals procedures; and

31 Experience in delivering large complex project working to governance structures and processes. The Project Manager will be able to draw upon the skills and expertise of the full New South Glasgow Hospitals Project Team when necessary. Diagram 1 gives the Project Team for the New South Glasgow Hospitals, including the New Administration (Office) Block in more detail

32 DIAGRAM 1 NEW SOUTH GLASGOW HOSPITALS PROJECT TEAM PROJECT DIRECTOR David Loudon DEPUTY PROJECT DIRECTOR Peter Moir PROJECT ADMIN SUPPORT Shiona Frew Allyson Hirst Carol Craig NHS SUPPORT Fire Energy Telecommunications Finance HR Infection Control TECHNICAL PROJECT MANAGERS Frances Wrath Hugh McDerment Alastair Smith Graham Forsyth Project Manager: New Office Block and New Teaching & Learning Facility FM/ESTATES Karen Connelly Ian Powrie IT Eleanor McColl Frank Carnie Mark Greig CLINICAL PROJECT MANAGERS Mairi Macleod Heather Griffin Fiona McCluskey PROCUREMENT Robert Stewart COMMUNITY ENGAGEMENT Mark McAllister CURRIE & BROWN David Hall Douglas Ross Paul Fairie Graeme Thomson CAPITA John Redmond Douglas Wilson William Roxburgh MEDICAL ADVISORS Stephen Gallacher (adult hospital) To be appointed (children s hospital) PROCUREMENT TEAM X4 (FTE) PHYSICS John McGarrity HULLEY & KIRKWOOD Medical Gases: Ian Sandford SWEET Cost Advisors: Simon Brooke Liam Anthony

33 6.2 CHANGE MANAGEMENT The Change Management Process: Design Change Design freeze was achieved by November 2013, no further change is anticipated. Change Strategy Managing Workforce Change Strategy Employees from the following functions will transfer into the new office block: Clinical staff e.g. Medical, Nursing, Allied Health Professions NHS; Administration Support staff NHS; Other NHS staff e.g. psychologists, infection control etc and; University staff (e.g. Doctors who are employed by University but provide clinical services and are currently located on hospital sites which are due to transfer to the New Southern Campus). All NHS Greater Glasgow and Clyde staff will be covered by our current Managing Change Policy and Procedure. While many staff are currently based in multi occupancy office environments the move to open plan is recognised as a change and, for some, a new way of working. In managing this change the Acute Division s Workforce Advisory Group have developed a Workforce Change Human Resources Toolkit with Organisational Development. The guide supports managers and employees to understand the impact of change and provides a range of tools to support the change process at local level. The Toolkit also reinforces our principles around partnership working and full staff engagement of any change. The Workforce Advisory Group has representatives from the Acute Partnership Forum and as we take forward this change staff side representatives covering the affected staff groups will be engaged in the process. The Division will use the Acute Partnership Forum and the Medical Staff Forum to ensure communication is frequent. The environment and behaviours required within the New Administration (Office) Block will also be aligned to our current Board programmes around agile working. The Board has been piloting several initiatives including the introduction of touch down areas, homeworking and working from home, and encouraging paperlite working environments through the use of IT. The Board has a joint operational group with the University of Glasgow which has already considered partnership working on the Clinical Research Facility and the Teaching and Learning Centre. The group will ensure that other stakeholders are informed and engaged in the change process

34 6.3 RISK MANAGEMENT The project s Risk Register has been set up in accordance with the standard format for the Frameworks Scotland Joint Project Risk Register. The Risk Register will drive the ongoing management of the risk throughout the construction phase (Stage 4) of the project. The costed Target Price Risk Register, split into NHS Greater Glasgow and Clyde and Bam Construction Limited, is attached within Appendix POST PROJECT EVALUATION NHS Greater Glasgow and Clyde is aware that in order to assess the impact of the project, an evaluation of activity and performance must be carried out post completion. This is an essential aid to improving future project performance, achieving best value for money from public resources, improving decision making and learning lessons for both the Board and others. Sponsors of capital projects in NHSScotland are required by the Scottish Government Health Directorates to evaluate and learn from their projects. Purpose The Board has an evaluation framework in place as follows: A post project evaluation will be carried out no later than 12 months after occupation; The strategic/service objectives detailed in this FBC will be used to assess project achievement; and Staff surveys will be carried out and trends will be assessed. Pre requisites for successful evaluation To ensure maximum pay off from evaluation, the following criteria are deemed as important: The evaluation is viewed as an integral part of the project and it is planned for at the outset; There is commitment from senior managers within the organisation; All key stakeholders are involved in its planning and execution; Relevant criteria and indicators will be developed to assess project outcomes from the outset of the project; Mechanisms will be put in place to enable monitoring and measurement of progress; A learning environment will be fostered to ensure lessons are heeded; and There is a commitment to feedback to Framework Scotland monitoring groups. The stages of evaluation Although evaluation will be carried out throughout the life of a project to identify opportunities for continuous improvement, evaluation activities will be undertaken at four main stages: Stage 1: at the project appraisal stage the scope and cost of the work will be planned out

35 Stage 2: progress will be monitored and evaluation of the project outputs will be carried out on completion of the facility. Stage 3: there will be an initial post project evaluation of the service outcomes 6 to 12 months after the facility has been commissioned. Stage 4: there will be a follow up post project evaluation to assess longer term service outcomes two years after the facility has been commissioned. It addresses issues such as the extent to which the project has achieved its objectives; how out turn costs, benefits, and risks compare against the estimates in the original business case and lessons learned from developing and implementing the project

36 APPENDICES

37 APPENDIX 1: FB1 FORM

38 35 7 3

39 APPENDIX 2: SCHEDULE OF ACCOMMODATION

40 37 7 3

41 38 7 3

42 39 7 3

43 APPENDIX 3: WORKSTATION/STAFF RATIOS

44 APPENDIX 4: DESIGN STATEMENT

45 42 7 3

46 43 7 3

47 44 7 3

48 45 7 3

49 46 7 3

50 47 7 3

51 48 7 3

52 49 7 3

53 50 7 3

54 51 7 3

55 52 7 3

56 53 7 3

57 54 7 3

58 55 7 3

59 56 7 3

60 57 7 3

61 58 7 3

62 59 7 3

63 APPENDIX 5: AEDET

64 APPENDIX 6: METHODOLOGY FOR THE INITIAL BENEFITS ANALYSIS The benefits criteria were derived from the projects objectives and weighted out of a total of 100 with those criteria which were perceived to be more important receiving higher weightings. The ability of each option to achieve each of the identified benefit criteria was discussed and then scored out of 10, a score of 1 being poor delivery of the criteria and a score of 10 being very good delivery. The weights and scores were then multiplied to give a total weighted score for each option. The preferred option was identified on the basis of the highest score. The methodology used follows the Scottish Capital Investment Manual Business Case Guide. The benefits analysis had input from the following: Project Manager for the New Administration (Office) Block (technical); External (business) Adviser; a representative of the New South Glasgow Hospitals scheme (stakeholder) and Nursing and medical representative input (Users). The Project Director oversaw the process to ensure due diligence and robustness of the process. Taking each of the criteria in turn: Both Options were expected to be able to provide workspace and therefore both scored 10 out of 10. In terms of providing fit for purpose accommodation however, the purpose built New Administration (Office) Block option scored far higher than the Retained Estate option, as the new office block will be designed fit for purpose therefore scores 10 out of 10. The Retained Estate option will have minimal reconfiguration of the current areas. Some of the buildings date back to 1870 s, others date from the 1960 s and 70 s and were designed for other uses rather than workspaces, therefore are much less able to provide fit for purpose facilities. In addition good WiFi would be limited because of the density of the building fabric and therefore technologies which are expected to be provided in the working environment would be limited. This option therefore scored 2 out of 10. Under the Retained Estate option the clinical services must transfer into the new hospital before refurbishment of the retained estate can take place. This will take several months, therefore this option will not be available to support the migration of clinical services and scores 1. The New Administration (Office) build will be complete and ready to accommodate the staff transferring with the clinical services, and therefore fully supports the clinical migration scoring 10 out of 10. Both Option 1 and Option 2 will support communication as both options have multi occupancy rooms, however the fragmented layout of the retained estate means that the optimum co locations of teams may not be achievable as the work areas will be spread across several buildings. The Retained Estate option therefore scored 5. The design of the New Administration (Office) build is deliberately flexible to allow co location of staff and teams (some large) and all within the same building therefore scores 10. In terms of sustainability and minimising ongoing revenue costs, the retained estate scores very poorly at 1 out of 10 as the ongoing revenue costs for the retained estate are significantly higher than

65 for the New Administration (Office) build which will employ modern materials and technology and is aiming for BREEAM excellence. For rapid access to admin workspace from the clinical work area the New Administration (Office) Block scores slightly higher than the retained estate as it is co located with the new Adult and Children s hospitals. The buildings which make up the Retained Estate Option are located further away than the New Administration (Office) block involving more travel time but are however located on the same campus and therefore score 6. The New Administration (Office) Block scored 10 with regard to the criteria Meets National Guidance as it is a modern, sustainable, purpose built building. As described the buildings within the Retained Estate option date from Victorian times or 1960 s and 1970 s, and therefore are less able to meet modern standards and score 2. The national guidance considered was Scottish Health Planning Note 03 and in addition, What Can We Do With The Office (Scottish Futures Trust) was referenced

66 APPENDIX 7: RISK REGISTER

67 64 7 3

68 65 7 3

69 66 7 3

70 67 7 3

71 68 7 3

72 69 7 3

73 70 7 3

74 APPENDIX 8: GENERAL ARRANGMENTS

75 72 7 3

76 73 7 3