CHILDREN'S INPATIENTS

Transcription

1 CHILDREN'S INPATIENTS (Lanesborough Fifth Floor Redevelopment) FULL BUSINESS CASE Version 1.6 for Board Review November 2014

2 Contents SECTION 1: EXECUTIVE SUMMARY Introduction Strategic Case Economic Case Commercial Case Financial case Management case Conclusion 13 SECTION 2: INTRODUCTION This Document Exclusions Format Next steps 17 SECTION 3: STRATEGIC CASE The Trust Strategic Background Current Children's Services at St George s Future Children's Services at St George s Model of care Current and Future Children's Activity at St George s Operating Theatres Financial background Location of services Length of stay and bed requirements Teaching, training and research Physical condition Space availability now and in the future Summary of the case for change Desired benefits Constraints Stakeholder Support 48 SECTION 4: ECONOMIC CASE Introduction The preferred option at OBC stage Issues Arising from Detailed Design Phase Functional content solutions Confirmation of the preferred option at FBC stage Cost Benefit Analysis of the Scheme as it Now Stands Description of the Preferred Option at Detailed Design Stage Interior Design Design Evaluation Decant Arrangements Phasing Private patients and market share 67 SECTION 5: COMMERCIAL CASE Introduction Procurement strategy Procurement process Moorfields Statutory Consents 72 SECTION 6: FINANCIAL CASE Sources of capital funding and cash flow Borrowing Charitable Funding Affordability Sensitivity analysis 83 WT Partnership Health Consulting Page 2

3 SECTION 7: MANAGEMENT CASE Project management Governance Structure Project plan Risk management Benefits realisation Post project evaluation 92 Appendices (separate volume) 1. Activity projections 2. Income projections 3. Capital costs (OB forms) 4. Revenue costs 5. Benefits assessment workshop 6. Risk assessment 7. Preferred Option Detail a. Lanesborough Level 5 Proposed Floorplan b. Lanesborough Level 5 External Views c. Lanesborough Level 5 1:200 Drawn Proposed Schedule of Accommodation d. Schedule of Derogations from HBNs/HTMs e. Draft AEDET evaluation and DQI evaluation f. Phasing Plan g. Cost Plan h. OB Forms i. Equipment j. Discounted Cash Flow 8. Expressions of support a. Trust board minutes February 2012 b. Charitable funding c. Commissioner support d. Private patients income 9. Briefing Report 2010 a. Main report b. High Level Schedule of Accommodation for Lanesborough Wing, Better Services Better Value Children s Services Clinical Working Group Final Clinical Report March 2012 WT Partnership Health Consulting Page 3

4 11. Stakeholder engagement a. Staff Open Day September 2013 b. Staff Survey Questionnaire January 2013 c. Staff Survey Results January 2013 d. Staff Survey Evaluation February 2013 e. Wandsworth Youth Council involvement f. Local School Children's Ideas g. Parent Survey Results June Procure 21+ High Level Information Pack July Planning a. Planning consent 14. Patient Stories a. Luka b. Rhea c. Ruth WT Partnership Health Consulting Page 4

5 DOCUMENT CONTROL Version Control Ref Draft Date Distribution Author OBC 1.0 Initial draft July 2012 Business case workstream DCW OBC Discussion Feb 2013 CHD Project Board, Trust Board DCW OBC 3.0 OBC 3.1 OBC 3.2 For submission & approval For submission & approval For submission & approval (updated appendices April 2013 NHS Trust Development Authority DCW September 2013 NHS Trust Development Authority DCW October 2013 NHS Trust Development Authority DCW FBC 1.0 Initial Draft October 2013 FBC 1.1 Discussion draft May 2014 Business case workstream DCW FBC 1,2 Discussion draft July 2014 Business case workstream DCW FBC 1.3 Discussion draft September 2014 Business case workstream DCW FBC 1.4 Discussion draft October 2014 Business case workstream FRAG DCW FBC 1.5 EMT draft October 2014 EMT DCW FBC 1.6 Board draft November 2014 Board DCW Drafting notes No drafting notes WT Partnership Health Consulting Page 5

6 SECTION 1: EXECUTIVE SUMMARY 1.1 Introduction This document sets out the full business case (FBC) for the development of the new Children's Hospital at St George s Hospital, Tooting. It concentrates on the implementation of the scheme that was identified in the option appraisal process which is the main focus of the preceding Outline Business Case (OBC). The OBC for this development was approved by the Trust Board in March 2013 and by the NHS England Trust Development Authority (TDA) in October As a Foundation Trust, the Board has authority to approve this business case without reference to the TDA. The preferred option has developed considerably since OBC approval. The principle reason is that the engineering solution envisaged at OBC has proven unsuitable for technical reasons. This led to the development of a solution which is far simpler in technical terms, and which delivers more beds for children's services. The scheme will result in the complete redevelopment of the 5 th Floor of the Lanesborough Wing of the site, which is no longer suitable for modern healthcare delivery. It has been developed in line with a number of documents including the 2006 strategy for children's services, 2008 Strategic Outline Case (SOC) for the development of the whole site, and the 2010 update to that document which concentrated on the Lanesborough Wing. The thinking behind the scheme has also been fully integrated into emergent site development control plan (DCP). The strategy for the Lanesborough Wing has been enhanced further through the development of a framework for the redevelopment of the whole wing in logical phases. This scheme represents the first stage in a programme to systematically upgrade and modernise the Lanesborough Wing to create a Children's and Women s Hospital, and will be followed by similar cases for other service elements in due course. The development is anticipated to be entirely beneficial in enhancing the Trust s reputation with patients, parents, referrers and commissioners as a centre of excellence in clinical services, teaching, training and research. Conversely, the risks of not proceeding can be measured in the same terms, and will lead to a decline in the financial standing of the service and its overshadowing by other tertiary hospitals. 1.2 Strategic Case The Trust is in the process of applying for Foundation Trust status, and in doing so has developed an integrated business plan that emphasises the organisation s key role in providing children's services across South West London and Surrey. St George s provides a range of primary, secondary and tertiary services for children in South West London as part of a comprehensive children's health network, and its strategy is to sustain and build on them to develop a comprehensive centre of excellence dealing with the majority of children's conditions in the area. The hospital admits over 12,000 children each year for elective and emergency care. It operates 57 inpatient beds on the top floor of the Lanesborough Wing. WT Partnership Health Consulting Page 6

7 The development of suitable inpatient facilities for children has long been a priority for St George s. The objective of refurbishing the top floor of Lanesborough Wing as a children's hospital was articulated as early as 2006 in the Children First strategy which was adopted by the Trust Board. This was followed by a Strategic Outline Case in 2008 to redevelop the whole site, followed by a detailed progress report in 2010 which focused solely on the Lanesborough Wing. The outcome of this was agreement that the Lanesborough Wing be developed as a children's and women s hospital, with a separate business case for each phase, the first phase being the 5 th floor. This is now reflected in the site development control plan (DCP). The Moorfields unit on the 5 th floor will relocate, and Dalby Ward will also be vacated as part of the hospital bed productivity plan. The configuration of children's inpatient services has been the subject of much planning and debate in recent years, and is currently being reviewed by a senior representative of NHS England. It is clear that St George s will remain the major tertiary referral centre for South West London, Surrey and Sussex. It is also likely that its secondary role will continue to expand as the need for more centralised paediatric expertise continues to grow. St George s will continue to be the hub of a comprehensive managed care network for children, and its clinicians continue to engage proactively with colleagues in the region to develop these relationships. However, the current facilities in the Lanesborough Wing are inadequate for a tertiary centre which provides state of the art care for children, and are incompatible with a satisfactory experience for our young patients and their families. In physical terms, the design and layout of the fifth floor are no longer suitable for modern healthcare. Its physical condition is poor, with several key elements needing complete replacement - electrics, medical gases, nurse call system, negative air pressure isolation facilities, air condition and ventilation, theatre air handling, windows, heating controls, fire alarms, and heat insulation. Layout and departmental relationships are inadequate, and the wards are physically cramped. Patient privacy & dignity is compromised by the low level of single rooms and en-suite sanitation, parents /carers facilities and lack of space around beds for visiting family. This means that, despite excellent clinical care, good patient experience is impeded. One parent expressed it thus: During our stay, we did however feel that there were certain facilities lacking, which would have made our stay more pleasant. This included access to better shower and bath facilities for parents and children. A bigger family room, where parents could go for a break. But most of all, more single bedded rooms. In times of stress and long periods of illness, it's important for families to be able to have their privacy, not confined by curtains but by walls. I think this would make the biggest difference in promoting quicker recovery, as it did for us. 1 Infection control is challenged by lack of space between beds and inadequate sanitary facilities. It is energy inefficient, using 50% more than the average for similar facilities elsewhere. 1 Luka s Story, see also Rhea s Story and Ruth s Story (appended) WT Partnership Health Consulting Page 7

8 Bringing the facilities up to the acceptable physical Condition B will not, on its own, be sufficient to rectify these problems, because this will merely deliver an out-of-date building in better condition. Any solution must address fundamental issues of layout, clinical practice and workflow as much as refreshing the physical fabric of the building. Current space standards typically require 50% more space per bed than buildings of the Lanesborough Wing s generation. The objectives of the scheme, in line with all the strategic intentions over the preceding years can be summarised as to: Completely refurbish the fifth floor, to modern healthcare design standards taking due account of the high profile planning requirement such as the single rooms and en-suite sanitation. Consolidate children's and adolescent care as much as possible into the fifth floor of the Lanesborough Wing, notwithstanding the greater take of space required by current building standards, to create a recognisable focus for these services. The anticipated benefits can be expressed in terms of: Enhanced patient safety, in terms of infection control and other safety measures. Enhanced quality of care, in terms of the model of care. Better patient experience, in terms of privacy and dignity, and a quality environment that is focused on children and young people. Enhanced departmental relationships and clinical adjacencies. A working environment that improves recruitment and retention, training and education. Fit with strategic plans, capacity to meet likely demand, and flexibility for the future. Ease of implementation. 1.3 Economic Case The options to achieve the objectives were generated through a process of user involvement over several years, and most recently in The 2010 document suggested a do nothing option. However, this was subsequently discounted as unrealistic, as the condition of the floor warrants refurbishment in any case, and based on a recent report, replacement of key engineering and plant cannot be delayed without significantly increasing the risk of breakdown. The OBC concluded that the preferred option would be the complete refurbishment of the entire fifth floor, including the two operating theatres and its use for children's and adolescents services alone. This would be enabled by the vacating of the Moorfields Eye Hospital ophthalmic day unit on Duke Elder and the senior health on Dalby, as conceived in the 2010 Briefing Report. The estimated cost was 16.1m plus 3.9m backlog maintenance. This option was approved by the TDA in October However, following OBC approval, once the initial design period was complete, it was clear that the original assumptions about the practicality of extending the floorplan of Level 5 were shown to be overoptimistic. The plan had been to create external pods cantilevered from the existing steel and concrete structure. A structural survey carried out to assist in the design process subsequently demonstrated that the structure would not bear the additional weight. All technical solutions to this issue, principally based on installing additional steelwork, foundered on the technical difficulty, disruption to other departments, compromised design and unacceptable additional cost. WT Partnership Health Consulting Page 8

9 The functional content was therefore reviewed by stakeholders to maximise the benefit to the Trust while living within the existing physical building envelope. This process involved a broad spectrum of clinical staff and management and explored a number of variants, including reducing the space allocations for all areas, relocating beds to another floor, or removing the theatre component. After a wide ranging discussion, it was unanimously agreed that the best way forward would be to remove the theatres element, and dedicate the entire floor to modern bed-stock, giving 68 beds in total. This decision was made with the proviso that the theatres element be the next major focus of development in the wing. The revised scheme also excludes the originally planned dedicated lift. There was also renewed focus on the wow effect of excellent interior design, to augment the clinical care and healing process. The capital cost of the scheme is estimated at 23.8m. The main elements explaining the rise in cost from OBC are: Mechanical and electrical engineering. This is an addition to the original scheme and was considered necessary because of the dilapidated state or inadequate capacity of the systems in the building. Additional cost 2.3m Interior design and standards. The upgraded interior design will cost an additional 1m. Inflation. There has been a large rise in building inflation since early 2013 as the economy comes out of recession. The starting point for the construction phase has also gone back 6 months. Additional cost 2.1m. These costs are partially offset by the reduction in costs associated with the pods, theatres and the lift, totalling 2.1m. The additional beds and the associated income is give the scheme a better economic profile than at OBC stage, and has a net present value of over 8m, compared to a net present cost of 12m for the do-minimum. In addition, the qualitative benefits of the scheme as it now stands have been compared with simply doing the minimum, with the result that it is considered substantially better. The costs and benefits are summarised below: Element Option 1: Do minimum Option 2: Scheme as it now stands Net present (cost)/value 000 (9,377) 11,734 rank 2 1 Weighted benefits score rank 2 1 Cost : Benefit ratio (27) 13 rank 2 1 The relocation of Moorfields and Dalby Ward are subject to separate planning processes. Moorfields will relocate to new theatres created on Level 1 of Lanesborough, before moving to permanent bespoke facilities elsewhere on site. A business case is being developed which will be approved before contract signature for this scheme. Dalby will be vacated in the Spring of 2015, in accordance with ongoing productivity gains that allow the consolidation of general medical and elder care ward, and additional capacity coming on stream. WT Partnership Health Consulting Page 9

10 1.4 Commercial Case The scheme has been procured under the Procure 21+ (P21+) framework, under which the design process is shared with the contractor. The Trust appointed Miller HPS as the principal supply chain partner (PSCP), and their architects, Avanti. The PSCP and the Trust have developed and agreed a cost plan based on the current level of the design (RIBA stage E). This will be developed to reach a Guaranteed Maximum Price (GMP) for the delivery of the scheme by December 2014, with shared, fully costed risks included in the price. Wandsworth Borough Council granted planning consent for the revised scheme in June Financial case The capital funding of 23.8m for this investment will come from three main sources: Loan capital ( 15.2m) a loan will be taken out via the National Loan Fund. Current terms are 2.5% and 25 years, and a 0.5% buffer on interest rates has been assumed. Backlog maintenance funding ( 6.1m) a significant proportion of the scheme consists of eradicating the maintenance backlog that has built up in recent years. Donated capital ( 2.0m) the hospital charity trustees have agreed to launch and fund a fundraising appeal towards the cost of the scheme. Over 500,000 has already been spent on the scheme in design and other fees. Recent work by the finance team using the Service Line Reporting principles and process has demonstrated that services for under-18s in the hospital generate a strong contribution to the Trust s financial position. The main additional operating costs of the scheme will be generated by: Additional staffing, theatre and non-pay costs associated with running 11 additional beds Loan costs, based on interest, and depreciation over 10 years for equipment and 25 for buildings. Loss of rental income from Moorfields. Additional heating, lighting and maintenance costs of the additional areas on the fifth floor occupied by the children's service. These would be offset primarily by: Generating income from the additional beds from growth in baseline activity, private patients and repatriating south west London patients currently treated in central London. In addition, there will be some contribution from surgical patients who stay in the paediatric intensive care unit, and for associated outpatient work. Additional income for tertiary services such as trauma. Additional private patients income, attracted by the new facility. Improved energy efficiency. Additional admissions to adult beds vacated by children (at present, on average two children occupy adult beds at any one time). WT Partnership Health Consulting Page 10

11 Productivity gains in medical staff, which will not increase above present levels. The scheme will therefore be on track to produce a broad operating break even position from the second year of operation once depreciation and interest payments are satisfied. This is tabulated below: Table 1: Preferred option income and expenditure summary 000 Option 2: Scheme as it now stands Item 2014/ / / / / /20 Income 0 0 (81) 5,539 8,068 8,101 Expenditure (4,350) (5,741) (5,678) EBITDA 0 0 (81) 1,189 2,327 2,423 Depreciation 0 0 (490) (980) (980) (980) Interest 0 (167) (360) (444) (426) (408) Capital charges total 0 (167) (850) (1,424) (1,406) (1,388) Surplus/(Deficit) 0 (167) (931) (235) 921 1,035 In cash terms, the loan will be repaid in equal quarterly instalments of 151,000 once the final tranche is drawn down in 2017/18. Depreciation is a non-cash item. 1.6 Management case The Trust Board is responsible for the overall success of the project, with the Project Team retaining day to day responsibility for the project. Details of the key roles and responsibilities are set out below: Table 2: Project Roles Role Name Position Project SRO Miles Scott Chief Executive Project Sponsor Peter Jenkinson (Formally Fiona Ashworth) Director of Corporate Affairs Project Director Eric Munro (formerly Neal Deans) Director of Estates and Facilities Project Manager Sharon Welby Associate Director, Capital Projects Clinical Lead Bruce Okoye Consultant Paediatric Surgeon Project Accountant Kevin Harbottle Assistant Director of Finance, Strategy and Planning Project Administrator Jenny Francis Capital Projects Manager Key decisions and direction is provided through the Children s and Women's Hospital Board, acting as the project board, chaired by Peter Jenkinson (previously Neal Deans). It is supervising a number of work streams, namely: Design team Clinical team Charity fundraising WT Partnership Health Consulting Page 11

12 Equipment Communications Business case The project will be closely co-ordinated with the schemes to relocate Moorfields and to close Dalby Ward. The key milestones in the project plan are set out below: Table 3: Project Milestones Milestone Set up CHD Project Board November 2011 Date Develop Outline Business Case June 2012 February 2013 Appointment of Principal Supply Chain Contractor August 2012 Outline Business case submitted to Trust Board February 2013 Outline Business case submitted to NHS Trust Development Authority April 2013 NTDA approval of OBC October 2013 Full Business case submitted to Trust Board November 2014 Decision / Agreement with Moorfields on relocation December 2013 GMP agreed December 2014 Vacate Dalby Ward May 2015 Construction Start Date June 2015 Vacate Duke Elder and Ophthalmology Theatres (Moorfields) June 2016 Completion Date June 2017 There are a number of key risks which are being addressed and mitigated: Delays to approval. Delivering charitable funding. Ensuring the timely vacation of Dalby Ward. Relocating the gynaecology surgical workload currently in the fifth floor theatres. Progress on the separate project to relocate Moorfields. The risks once the project is under construction will be managed jointly with the PSCP on an open book basis, and the costed risk register will form part of the GMP. Planning is underway to ensure the desired benefits of the scheme are realised, and to evaluate the project when the new facility is in use. WT Partnership Health Consulting Page 12

13 1.7 Conclusion The Trust Board approved the OBC in March , and it received NHS Trust Development Authority approval in October The Board is now asked to approve the FBC, to allow the scheme to progress to agree a GMP. Contract signature for construction to commence will be contingent upon the approval of the business case for the Moorfields theatre relocation and the plan for vacating Dalby Ward. 2 See Trust Board Minutes February 2013 (appended) WT Partnership Health Consulting Page 13

14 SECTION 2: INTRODUCTION 2.1 This Document This document sets out the full business case (FBC) for the development of children's inpatient services at St George s Hospital in Tooting, primarily in extensively refurbished accommodation on the fifth floor of the 1970s Lanesborough Wing. It outlines the decision making process for the design and reconfiguration of the 5 th floor to accommodate the current in-patient services for children and imminent growth in some specialties. It is important to note that during the design process, emergent technical and structural difficulties led to a necessary change in the design. However, it is considered the final design offers a better solution for the care of children and young people. As day care and operating theatres are not now featured in the final design, these will be addressed in the next phase of the children and women s project. This development has been in planning for several years, and the FBC should be read in conjunction with a number of planning documents: Children First - The 2006 Trust Strategy for St George s Children s Hospital, updated This included the intention to redevelop the 5 th Floor of the Lanesborough Wing as the last (and as yet only incomplete) of five strategic thrusts. The 2007/2008 Strategic Outline Case (SOC), for the redevelopment of the whole of the site. This in itself was four years in the making. The following dialogue between the Strategic Health Authority (SHA) and the Trust resulted in prioritising the facilities housing women's and children's services, largely in the Lanesborough Wing. The 2007 Estates Strategy, updated September 2010 (especially section 5.5) and again in October The resulting 2010 Briefing Report (appended), which produced more detailed plans for the narrowed focus on women's and children's services, including a floor by floor layout and costings. The subsequent decision of the Children's Hospital Board and Trust Board to focus the first stage of development entirely on children's services, reaffirmed at the October 2012 Trust Board meeting. The 2012 Integrated Business Plan, supporting the Foundation Trust application process, which encapsulates the most up to date thinking within the trust. The 2013 Theatre Capacity Paper, which identified the timing of the required refurbishment of the Trust s theatre stock. The 2013 EMT update on Moorfields, winter pressures arrangements and charity funding The 2013 Outline Business Case for the Children's Hospital Development, which immediately precedes this FBC. The OBC was approved by the Trust Board in March 2013 and by the NHS England Trust Development Authority in October The outputs of the design process leading to the revision of the preferred option. This includes the removal of the external pods, the elimination of the theatres and day case component and exclusion of express lift) WT Partnership Health Consulting Page 14

15 The site development control plan and the strategic outline case for the redevelopment of the remainder of the Lanesborough Wing, leading to the development of a conceptually distinct and physically separate Children's and Women's Hospital at St George s. This FBC, which provides modern facilities for children's inpatients on the fifth floor, should be seen in effect as the free-standing first phase of a larger programme. In September 2012 the Trust Board reaffirmed their commitment to developing the Children's and Women's Hospital, with the children's element as the first stage. As the planning process has progressed, the scope of the project has narrowed as the detail has deepened, illustrated below: Figure 1: Project Scope 2008 Strategic Outline Case Whole Hospital Redevelopment 2010 Briefing Report Scope Detail Children s and Women s Hospital 2013 Outline Business Case 2012 Outline Business Children s Case Services Children s Services 2014 Full Business Case Children s Services Subsequent cases for other elements of Children s and Women s Hospital A Gateway Review was completed in May 2008 assessing, in principle the SOC s ability to: Address business need Affordability Achieve with appropriate options explored Demonstrate value for money Demonstrate benefits are clearly identified and measureable One of the key recommendations from the Gateway Review that has influenced how the Trust has progressed to date was: The Project s timescale and critical path should be reviewed with a view to fast-tracking certain elements and delivering some of the benefits earlier. It was the view of reviewers that due to protracted timescales the benefits would not be not realised soon enough. WT Partnership Health Consulting Page 15

16 The focus on the Lanesborough Wing was based on the disproportionate level of backlog maintenance in that wing representing at the last evaluation one third of the 36m total for the whole hospital. The phased approach to redeveloping the whole Wing was agreed with NHS London on the basis of affordability and phasing requirements. It was considered unworkable to take the entire wing out of commission at once because of the need to maintain operational services throughout the programme thus precluding a single phase programme. A further gateway review is being planned with the Gateway London Health team in Exclusions The scheme does not address the following SPECIFIC EXCLUSIONS: Refurbishment of theatres. This will be subject to a separate business case. Dedicated emergency theatre for children. It will still be necessary to have four theatres for paediatric use on the 1 st floor in the longer term, one of which will be a dedicated emergency theatre for children in response to CEPOD and other guidelines. The implementation of specific children's emergency lists will require a separate business case with reallocation of theatre session time in collaboration with adult-focused specialties and the theatres team. The remainder the Children's and Women's Hospital programme. Works related to later stages of the programme to create a children's and women's hospital, such as the re-ordering and upgrade of obstetrics and gynaecology facilities, and a possible large extension on the east side of the Lanesborough Wing. Other works with the P21+ Procurement bundle. The current procurement bundle refers to other potential packages of work such as the development of a facility for Moorfields Eye Hospital and the Helipad the latter now being complete and in operation. These are completely separate in terms of capital approvals and building programme. 2.3 Format This document follows HM Treasury guidance on the development of business cases using the Five Case Model as follows: The strategic case. This sets out the strategic context and the case for change together with the supporting investment objectives for the scheme. The economic case. This demonstrates that the Trust has selected the option which best meets the existing and future demands of the service and optimises value for money. The commercial case. This details the content and structure of the proposed procurement route and contract. The financial case. This confirms the funding arrangements and affordability and summarises the impact on the income and expenditure account and the balance sheet. The management case. This demonstrates that the scheme is achievable and can be delivered successfully to time, cost and quality. WT Partnership Health Consulting Page 16

17 The OBC concentrated on making the case for change, and establishing the preferred option through a structured cost-benefit analysis. As an FBC level submission, this document confirms the conclusions of the OBC, updates the document for revisions to the preferred option, and concentrates on the details of procurement and project implementation. 2.4 Next steps The next stage after the approval of this document is the conclusion of a contract with the Principal Supply Chain Partner for the delivery of the scheme as designed, within a Guaranteed Maximum Price. WT Partnership Health Consulting Page 17

18 SECTION 3: STRATEGIC CASE 3.1 The Trust St. George s Healthcare NHS Trust has a compelling vision for the future. As a highly performing Foundation Trust, St. George s will in 2022 be a provider of excellent integrated care and the major provider of tertiary services to 1.7m residents in south west London, 1.1m in Surrey and beyond. Delivering health care of exceptional quality, the trust will provide a comprehensive range of health services, which patients will choose for their treatment, GPs and hospital will choose for their patients and commissioners will choose for their populations. In addition to providing enhanced cardiovascular, neuroscience, paediatric, renal, specialist surgical and cancer and other tertiary services to a population of 2.8 million and wider, the trust will also provide a full range of high quality acute and community health services, integrated where possible with social care, that local patients expect from their NHS. As well as delivering exceptional healthcare, St. George s will, as a partner of Kings Health Partners Academic and Health Sciences Network, be leading on and collaborating with other organisations in the development of cutting edge health research, and sharing the benefits of that research with other health, social and third sector organisations. This research will have both direct benefits in terms of the quality of patient care received by St. George s patients, and indirect benefits in terms of attracting and retaining staff of the highest calibre to come and work at an organisation with a growing national and international reputation in research. The trust will also consolidate its position in teaching and training, both in partnership with St George s, University of London, and as a lead and coordinator for clinical training. 3.2 Strategic Background St. George s mission is to provide excellent clinical care, education and research to improve the health of the populations it serves. Its vision is to be an excellent integrated care provider and a comprehensive specialist centre for south west London, Surrey and beyond with thriving programmes of education and research. Its values are to be excellent, kind, respectful, responsible. This is set out graphically below: Figure 2: Trust strategy Providing the highest quality local hospital care in the most effective and efficient way A workforce proud to provide excellent care, teaching and research Renowned integrated services enabling people to live at home An excellent integrated care provider and a comprehensive specialist centre for south west London & Surrey Transformed productivity, environment and systems A comprehensive regional hospital with outstanding outcomes Thriving research, innovation and education driving improvements in clinical care WT Partnership Health Consulting Page 18

19 The vision of the trust s Clinical Service Strategy for children, as set out in the 2012 Integrated Business Plan is to be: A comprehensive regional hospital with outstanding outcomes. St. George s is and will remain the hospital in London with the widest range of specialist services on one site, uniquely placing the trust to look after patients with complex clinical needs. By 2022 the trust will: Be amongst the best for the outcomes, experience and safety of our specialist care Have a dedicated Children s and Women s Hospital providing world class care to children and women For children, a more specific vision statement was set out in the May 2011 Children First document: The overall vision for children s services is that each child under the care of St George s Healthcare NHS Trust is treated in an environment appropriate for children by individuals with expertise in caring for children within a child-focused framework of safety, quality, governance and safeguarding. The 2006 iteration of Children First set out five key objectives following: Develop its district secondary services to provide a 21 st century service to the local population of SW London and provide networked specialist services. Develop children s surgery and anaesthetics. Become a Paediatric Oncology Centre jointly with the Royal Marsden Hospital (RMH),, and a lead centre in the UK for Paediatric HIV, infectious diseases and haematology. Expand Children s intensive care (NICU and PICU). Redevelop the 5 th floor of Lanesborough Wing. All but the last have been achieved. In recent years the following developments have taken place: General paediatrics has been strengthened with new consultants and an improved paediatric assessment unit in the A&E department. Specialist services such as gastroenterology and endocrinology have developed and been expanded. Paediatric surgery has developed a full network model covering the whole of the South West Thames region with outreach clinics and day surgery lists. With the exception of cardiac surgery, St George s now provides a full range of children s surgical services. St George s opened paediatric oncology beds in October 2008 as a joint centre with the Royal Marsden Hospital 3 and is a lead centre for paediatric HIV and infectious disease. In 2010 PICU was refurbished with a 25% increase in capacity, (10 beds in total). These have all been considerable achievements to deliver the 2006 strategy. 3 The six beds initially commissioned were not sustainable. Currently there are two oncology beds, to increase to four in early WT Partnership Health Consulting Page 19

20 3.3 Current Children's Services at St George s St George s Healthcare NHS Trust provides the widest range of community, secondary and tertiary services for children in South West London. It offers: Children s surgery - Paediatric surgery, Neurosurgery, ENT, Plastics, Orthopaedics Paediatric Intensive Care (PICU) Paediatric Anaesthesia Paediatric Medicine (Acute Paediatrics) Neurology, Neuro-disability/Developmental Paediatrics, Infectious Diseases, Gastroenterology, Respiratory, Allergy, Endocrinology, Haematology, Oncology Community Child Health Services Neonatology Clinical Genetics Paediatric Radiology Paediatric Pathology For specialist services, its catchment extends into Surrey and Sussex. St George s is part of the south Thames Tertiary Integrated Care System (ICS). This is defined by the London Specialist Commissioning Group as a group of providers that come together in a formal, governed way to provide comprehensive, seamless care pathways for specialised paediatrics. The London Specialist Paediatric Integrated Care Systems will be the significant providers of specialised paediatric care in the future: they are expected to improve outcomes and consistency of service quality across the capital and is led by Sir Alan Craft. St George s is part of the development of a South Thames Integrated Care System providing a robust model for the provision of a comprehensive range of specialist paediatric services across south London, Kent, Sussex and Surrey but also supporting the North Thames Network. 3.4 Future Children's Services at St George s Children First Children First outlines a number of key steps for the coming five years: Table 4: Children First objectives Overview Refurbish, brand and promote SGH Children s Hospital Ensure dedicated facilities for all children s services Deliver 5% efficiency savings each year Recruit & train ANPs Develop an adolescent facility Strengthen the transition process from children s to adults services Develop a modern workforce Have a functioning SW London children s provider network in place Better co-operation with PCT and the commissioning process Training of further Physician Assistants WT Partnership Health Consulting Page 20

21 Urgent & emergenc y Surgical Tertiary Safeguarding Ensure improved management of A&E attendances by reconfiguring PAU & urgent care centre workforce model Redevelop Lanesborough Wing facilities to accommodate the majority of Children s Surgery in a dedicated children s facility Strengthen communication and networks with partner hospitals, e.g. explore opportunities to operate in other trusts Strengthen tertiary paediatric services Refurbish inpatient areas to accommodate expansion of tertiary paediatrics Have a functioning South London tertiary paediatrics network board in place Networking across the sector Develop sector-wide approach to Safeguarding services Establish multi-agency offices at SGH Review scope of integration within SGH of professionals allied to medicine Tertiary services in London have been undergoing a process of review which will continue into the future. The Trust risks losing tertiary services to other providers if facilities are not commensurate with modern standards. The hospital s clinicians will continue to engage proactively with their colleagues elsewhere in the sector and region at a policy level and in on-going clinical practice. There is a real need to accommodate multi-professional counselling/examination rooms. These spaces would provide both a safe and confidential environment away from the bedside/cubicle to conduct the interviewing around child sexual abuse and Non Accidental Injury cases. There is a clear case for a sector wide approach to this work, to increase expertise and maintain and improve training through supervision and peer review. These rooms would become the centre of safeguarding within the Children s Hospital and for the clinical network Enhanced Care for patients requiring long term hospital support Increasingly, the hospital sees more children who require ongoing respiratory support or enhanced care. These may be infants born very prematurely and have chronic lung disease, or may be children with neuromuscular disease or other issues. Long term care in the hospital setting is not appropriate once the child s immediate health issues have been dealt with but they may continue to need ventilation, even in the home environment. The only way to enable these children to go home is with ongoing respiratory support. Respiratory support is given by a breathing machine (ventilator), either via a tracheostomy or a mask. Once a decision has been made to provide this care it may take several weeks or months to meet the stringent requirements for sending the child home. Currently children are cared for in an intensive care (NICU / PICU) environment, which is more appropriate for patients with more acute, and often multiple conditions however, this cannot effectively prepare patients and families for ventilation in the home environment. Many paediatric inpatient units are not able to accommodate children with these needs. WT Partnership Health Consulting Page 21

22 It is more appropriate to run an enhanced transitional care unit separate to neonatal or paediatric ITU/HDU. It would help the child and family develop their skill and experience for home care in a less intensive, more domestic, environment with input from play therapy and school as appropriate. In this way they would be more acclimatised to managing the needs of their child without the intensive care associated with the PICU or NNU environment, which they would have become accustomed to. Focussing on the child and their discharge needs may also aid earlier discharge from hospital. Such a unit would also provide a space where children could be readmitted if need be (unless seriously unwell with respiratory issues) without the need for an intensive care bed.. It would then be a point of contact when they have concerns. The beneficial knock-on effect would be to increase the number of beds available in PICU and NNU, as these patients would be cared for in a ward environment. Given the pressure for genuine intensive care admissions, there is no doubt that these would be occupied by more appropriate admissions Children's trauma and burns St George s hospital is currently the de facto major trauma centre for children as part of the south west London trauma network. It is also a designated burns facility. The helipad recently brought into use at St George s will enable more of these cases to be brought to St Georges, so an increase in major paediatric trauma at St George s is to be expected. At this stage, attempting a statistically valid projection of the activity that can be expected is not feasible, not least because of the small numbers and the short time since the helipad came into use. However, the increase in paediatric admissions through this route has already been demonstrated, with approximately 20% of helipad admissions being children, and the considered view of the clinicians concerned is that numbers are likely to rise steadily as awareness of the service becomes more widespread and new emergency admission patters become established. While relatively small in number, these cases are often highly complex and require multi-disciplinary working between subs-specialties. In addition to this St George s has been granted approval to move forward to getting Burns Facility designation which will include the management of paediatric burns Children's neurosciences A public consultation has been carried out on the proposed model of care for Children s Neuroscience Networks. It was mandated that all parts of the care system need to work closely together in a managed network in order to make the best use of scarce specialist expertise. In the Safe and Sustainable Paediatric Neurosurgery review In London it was agreed that the development of the model would be part of the Tertiary Paediatric Programme and the team has been working with Trusts and neighbouring SCGs to develop the local model. A two network model divides the population into one network north of the Thames and one south of the Thames. St George s Healthcare is working in partnership with King s College Hospital to provide a networked solution for paediatric neurosurgery in South London and surrounding counties Children's oncology In partnership with the Royal Marsden Hospital, St George s is the Primary Treatment Centre (PTC) for paediatric oncology for South London, Sussex, Surrey and Kent, one of only a dozen or so centres in England. Four beds are jointly managed between the two organisations. St Georges provides cohesive and combined shared care services, which can be overseen by the oncology specialists. The service is supported by all tertiary specialties and paediatric high dependency and intensive care. As these children may often become ill very quickly it is a benefit to have all specialties on a single site. WT Partnership Health Consulting Page 22

23 Paediatric oncology shared care units (POSCU) are based at secondary care level hospitals in the area (Croydon, St Helier and Kingston) and are affiliated to. the PCT. They allow the child and family to be cared for as near to home as possible, avoiding unnecessary travel to the PCT. Some local hospitals may not provide specialist children's cancer care and the responsible clinical team may be general paediatric physicians or adult oncology specialists. There are 4 levels of care for shared care. St George s provides a level 1 service, with the intention to increase to level 2 and maybe 3. Level 2 would entail additional day case and outpatient work, but level 3 would require additional inpatient beds overnight chemotherapy. It is likely that the shared care service will grow, as the national standards are met at St George s. Treatment Level Initiate treatment for acute lymphoblastic leukaemia In-patient and out-patient care for children and young people with cancer following initiation of treatment Out-patient care for children and young people with cancer following initiation of treatment Treatment of febrile neutropenia It is also likely that the role of the PCT will be enhanced in the future, with a further concentration of inpatient services at St George s to ensure specialist skills and expertise is developed and maintained. This may in turn lead to a reduction on the number of POSCUs However, the physical state of the inpatient wards present a substantial barrier for further commissioning of tertiary services at St George s, especially when compared with other tertiary providers in south London Adolescent services Adolescence is a biological and psychosocial stage of human development that cannot be bounded within strict age ranges. For pragmatic purposes in UK policy, however, it is generally considered to be from years of age. There are over 6.5 million adolescents in England making up more than one third of the under 20 population, although this is not reflected in healthcare facilities. There is good evidence that young people have a number of specific health needs: Adolescence is a period of risk-taking behaviour that can have effects on health and safeguarding; such as accidents and violent trauma, drug and alcohol related intoxication and harm, over or underweight, pregnancy, and sexually transmitted illnesses. Mental health needs contribute the greatest disease burden in adolescence and can have effects on all of the above. As many as 1 in 10 young people are estimated to have a diagnosable mental health condition. Emerging independence during adolescence leads to young people with long term conditions, such as asthma, epilepsy and diabetes, taking increasing control over their own health and treatment. The way in which they do this will have a significant impact on their prognosis as adults. WT Partnership Health Consulting Page 23

24 1/7 8/7 15/7 22/7 29/7 5/8 12/8 19/8 26/8 2/9 9/9 16/9 23/9 30/9 7/10 14/10 21/10 28/10 4/11 11/11 18/11 25/11 2/12 9/12 16/12 23/12 30/12 Admissions per Week St George s Healthcare NHS Trust Full Business Case v1.6 Cancer rates for teenagers and young adults are higher than for children and carry a worse prognosis, which may in part be due to issues with diagnosis. Adolescents are less likely than children to visit their GP and often lack the skills to navigate health care services. A small but significant number of young people are managed in the Trust on an inpatient basis. Analysis of admission data from the second half of 2013 found the following admissions for year olds across the Trust: This suggests a unit of up to 8 beds would be required to cope with peak demand, if all patients were cohorted together. Given the complete lack of adolescents facilities, improvements in the following areas are required: 1. Accessibility and publicity: Outpatient clinics are not currently widely offered at times that suit the education needs of young people. There is limited choice available when booking. There is limited specific targeted patient information available for young people when attending the Trust about their options 2. Confidentiality and consent: There is limited training available for staff in ethical and legal issues relating to young people and little opportunity for multi-disciplinary or multi-agency training, although a policy does exist and can be accessed 3. Environment: There are currently no dedicated adolescent facilities in either outpatient or inpatient environments. The Courtyard clinic comes the closest, with a designated walk-in under 18s clinic. There are no adolescent recreational facilities available in inpatient wards. Play material is appropriate for younger children only and all visual displays are for young children or parents. 4. Joined up working: WT Partnership Health Consulting Page 24

25 Apart from the limited transition clinics, the Courtyard clinic and the developing eating disorders clinic, there are few examples of professionals working together specifically for young people. There is no adolescent CNS and no specific teams e.g. leaving care teams. Psychosocial meetings are location based and poorly attended by some staff groups. There is limited promotion of other local or national services available for young people. 5. Patient involvement: There is poor capture of patient satisfaction data generally, and no specific analysis around the needs of young people. 6. Health issues for young people and mental health support: There is wide clinical variability in the health issues covered at consultations with little targeted training CAMHS support for psychosocial issues varies from borough to borough, with noticeable psychiatry liaison gaps in some boroughs There are very long waiting lists for psychology services and no stop gap provision e.g. staff trained in counselling or therapeutic communication It is considered that a single unit for adolescent patients would address many of these concerns, and give a focus and profile for adolescent services which is currently lacking. 3.5 Model of care The model of care at St George s is an integrated and comprehensive model that takes account of the patients physical, psychological and educational needs. The hospital has a full range of general hospital services, with specialist services in children's general surgery, intensive care, neurology, neurosurgery, infectious diseases and cancer. The recent document on safe and sustainable surgery for children, drawing on best practice from the Royal Colleges, the Care Quality Commission, the Department of Health and others, identified several standards that the hospital should be working towards. These standards were approved by the executive board in Wherever and whenever children undergo anaesthesia and surgery, their particular needs must be recognised. They should be managed in separate facilities under the supervision of staff with appropriate experience and training. The key standards are set out below: Children should be separated and not managed directly alongside adults at any stage in their patient journey. Elective surgical admissions for children should be scheduled on dedicated children s theatre lists, and in theatres and recovery areas designated for the care of children. Children should not undergo surgery on mixed adult and paediatric lists. Children should not be admitted to adult surgical wards or critical care facilities other than in special circumstances. At all times, children should be anaesthetised by consultants who have relevant and regular paediatric practice sufficient to maintain core competencies. At all times, children should be operated on by consultants who have relevant and regular paediatric practice sufficient to maintain core competencies. WT Partnership Health Consulting Page 25

26 All children undergoing a surgical procedure within the trust or admitted under a surgical team should have a joint admission with a consultant paediatrician or have a named paediatric medical consultant. All who come into contact with children should have at least Level 2 safeguarding training. All those with who regularly operate on children should have at least Level 3 training. All surgical inpatients must be regularly assessed by a dedicated paediatric pain team, and there must be clear protocols in place for the pain management of day cases. All children undergoing elective surgery within the Trust must be invited to a preassessment clinic. This would ideally be led by a paediatric nurse specialist or advanced nurse practitioner. The ideal environment for the successful maintenance of these standards is a dedicated, integrated children's facility, and the full implementation of all these standards is dependent on the redevelopment of children s facilities. The children's service has recently introduced a new emergency pathway to reduce unnecessary admissions through a paediatric assessment unit located within the emergency department. This was seen as a success and has been extended in size. The next step is to shorten and straighten elective pathways through the colocation of theatres for day and routine surgery with the day unit and surgical wards. This should enable patients to be admitted on the day of operation, using the race-track principle. Thus they should be able to walk into the admissions lounge from initial reception, and go straight into the theatres complex, rather than going via a bed. Following their operation and recovery, they can then either be admitted to a surgical bed, or proceed to the day unit for same day discharge. Patients with more complex or risky surgery should be operated on in theatres with intensive care facilities close to hand. This indicates the best location for this surgery is on Level 1, which has the benefit of collocation with PICU for any extended post-operative recovery. The availability of a dedicated lift would reduce the time, effort and potential risk of transporting these patients up to the surgical ward once stabilised. 3.6 Current and Future Children's Activity at St George s Population-driven growth Demand for the Trust s services is growing steadily, at twice the rate of the sector s planning assumptions. The Trust s business plans have assumed a growth rate in children's admissions of 1.5% (emergency) and 1.8% (elective) for South West London sector activity, which is consistent with growth assumptions for NHS commissioners in London. However, the introduction of services such as the paediatric assessment unit has braked, and indeed reversed the increase in emergency admissions. The analysis below shows the expected numbers of patients under the age of 18 under the agreed growth scenario, and excluding major service reconfiguration related changes 4. 4 Based on all patients under the age of 18, excluding obstetrics, neonates, and well babies. Source: SGH Information Team, WT Partnership Health Consulting Page 26

27 Planned Actual St George s Healthcare NHS Trust Full Business Case v1.6 Table 5: Activity growth Year Basis Electives Emergencies Total Spells Growth Spells Growth Spells Growth ,211 4,584 9, , % 5, % 10, % , % 5, % 10, % , % 5, % 10, % , % 5, % 11, % , % 5, % 11, % , % 5, % 11, % , % 5, % 11, % , % 5, % 11, % , % 5, % 12, % The growth projections at OBC stage suggested that admissions would rise by just over a quarter between 2009 and However, actual growth has consistently outstripped the growth projected by commissioners for the sector as a whole. This is explained by: Greater coverage of the local catchment population attracting local patients who might otherwise have gone to neighbouring hospitals. Greater penetration of neighbouring catchments attracting referrals from patients who would normally go elsewhere. A more realistic projection is therefore around 5% per annum for the short and medium term Stemming Outflows of Patients from South West London An extensive market analysis has been made using the Dr Foster database 5. Parents and referrers have over recent years sent increasing numbers of patients to hospitals outside South West London. This is most marked in Wandsworth: although over half of elective admissions are to St George s, over one quarter of emergency admissions and one sixth of elective admissions went over the river to the Chelsea & Westminster Hospital in 2011/12. Other significant competing hospitals (i.e. non-south West London trusts) are Guy s & St Thomas (the Evelina Children's Hospital on the St Thomas site), Great Ormond Street Hospital and South London Hospitals. The risk of the current situation is that ever greater numbers of patients will drift away to hospitals with more modern and patient friendly facilities, weakening both the service base and its financial viability. Market share for each core PCT is shown below, split between elective and emergency admissions, with the nearest competitor for comparison.. 5 Based on all paediatric specialties by hospital, by PCT: source SGH Commercial Dept (data from Dr Foster) WT Partnership Health Consulting Page 27

28 Table 6: Market Share Market Share by Volume and Percentage Elective Admissions St George's Healthcare Nearest competitor (non SW London) PCT Volume Percentage Trust Volume Percentage Wandworth 1,607 52% C&W % Merton & Sutton 1,403 28% GSTT 151 3% Surrey 914 8% ASP 2,149 19% Croydon % GSTT 279 7% Kingston % C&W 75 5% Lambeth % GSTT 1,311 52% Richmond & Twickenham % WMUH % Market Share by Volume and Percentage Non-Elective Admissions St George's Healthcare Nearest competitor (non SW London) PCT Volume Percentage Trust Volume Percentage Wandworth 4,650 52% C&W 2,335 26% Merton & Sutton 3,253 29% C&W 116 1% Lambeth % GSTT 3,642 54% Croydon 801 7% S. London 540 5% Surrey 519 2% RSCH 6,787 22% Kingston 293 6% C&W 38 1% Richmond & Twickenham 184 4% WMUH 1,593 32% Within Wandsworth, the proximity of Chelsea & Westminster Hospital means that several GP practices refer emergency admissions that way. This is mapped overleaf: the purple shades indicate the referrals to C&W the light blue to St George s. While it is understandable that patients in Battersea and Putney might naturally gravitate towards the C&W, this is not the case for residents in southern parts of Wandsworth, Clapham and Tooting, which all send sizable numbers of patients north rather than south. This is seen as an opportunity for St George s, as the presence of first class facilities can make a difference in the referral decision for both GPs and parents of patients. WT Partnership Health Consulting Page 28

29 Figure 3: Market share analysis Based on 2011/12 and 2012/13 practice level market share data from Dr Foster and advice from Trust commercial team, it is considered that a 5% increase in elective market share for Wandsworth, 2% for Merton, 1% for other boroughs in SW London and ½% for Surrey would be a reasonable, conservative estimate. This would represent an additional 400 elective cases, of which 290 would be day cases and 110 inpatients. Although referrers, particularly GPs, are likely to refer emergency cases as well, no activity or financial assumptions have been made at this point. The commercial department and the paediatric clinicians will be developing detailed plans based on the data illustrated above, identifying specific target practices, and an engagement plan for each. The aim will be to convince local GPs and commissioners that St George s is the natural choice for referrals, and has the facilities and services to justify that conviction. At the same time, recognising the key role played by parents in the choice of hospital, local parents will be given suitable information on the facilities, services and access levels South West London sector wide reconfiguration The modelling exercise carried out as part of the 2012 BSBV review and continued in the current South West London collaborative commissioning exercise has identified that if St George s becomes the single site for the inpatient care of children, it would require some 25 additional inpatient beds, and additional assessment beds. The full implication of this change in terms of patient numbers, capacity requirements and timescale has yet to become clear, but if it comes to fruition, it is likely to require an additional ward, and the reworking of the model of care to accommodate the patients appropriately. The Trust is committed to implementing the recommendations when they are agreed. 3.7 Operating Theatres This section addresses the complex issues around the consolidation of operating sessions relating to children in the hospital. At present children's operating is spread across several locations, including Lanesborough Level 1, the day surgery unit and other theatres around the hospital. It is the long term aim to bring all operations on children, with a few exceptions, into the Lanesborough Wing. WT Partnership Health Consulting Page 29

30 3.7.1 Current Children's Lists Operating on children takes place in a number of theatres, including the two theatres on the first floor of Lanesborough Wing. However, other operating is dispersed, meaning that children are often operated on in mainly adult theatre lists, and in facilities that are not dedicated to or orientated towards children. This does not comply with national standards from the National Confidential Enquiry into Peri-Operative Death (NCEPOD commonly referred to simply as CEPOD), the National Service Framework for Children's Services, Royal College of Surgeons guidelines or the Sustainable Children s Surgery policy approved by the trust executive in A recent audit of theatre activity 6 confirmed that 26 sessions are currently taken up with dedicated children s lists in the Lanesborough wing and the adult day surgery unit (dental sessions). When spread across a normal working week this would occupy three operating theatres. On any one day, between four and six sessions are run, indicating the need for two to three theatres on any one day of the week Moorfields moving to new facilities Moorfields Eye Hospital NHS Foundation Trust occupies approximately one quarter of Level 5, as well as outpatient areas on Level 0 of the Lanesborough Wing. This will release some 1000m 2 of space for the use of the Trust Children operated on in adult lists In addition some 1350 children are operated on in adult operating theatres, representing some six to seven sessions per week, two thirds of which are emergencies. These areas are not designed for children. Currently, emergency operations are routinely carried out on adult emergency lists. The introduction of a dedicated theatre to consolidate emergency operating on children, based on CEPOD recommendations, would require additional staffing for ten sessions. A high level review has been undertaken as part of this business case, which has identified the need for a more detailed analysis of theatre sessions and casemix, using the detailed information which is only now becoming available as a result of the implementation of the theatre information system. For children operated on outside of dedicated children's lists, a detailed plan will be developed to: Consolidate elective operations into dedicated operating lists within Lanesborough Wing. Consolidate emergency operations in a dedicated bookable theatre in Lanesborough, to create a children's CEPOD theatre. This will be the subject of a separate business case. There is a mix of elective and emergency operating in children's and adult lists which, in the long term should be brought into dedicated children's lists, with standalone emergency lists in a CEPOD type (bookable) theatre. Consolidating this work into the Lanesborough Wing will involve understanding and balancing the complexities of: Case mix, frequency of presentation and length of operations. Theatre list utilisation and efficiency. Surgeon timetables and job plans. 6 Audit of theatre sessions and patients, 2012, St George s Theatres Department WT Partnership Health Consulting Page 30

31 Access and waiting time targets. This planning work will be carried out in detail under the auspices of the SOC development. 3.8 Financial background Children's services at the hospital have in the past suffered from a perception that they do not contribute to the financial health of the Trust, and on the contrary, cost the Trust money. Part of this was driven by the difficulties in allocating expenditure and income fairly across the specialties carrying out children's work. For example, income was typically attributed to the specialty under which the patient was admitted, such as ENT, but ward costs allocated to the specialty of the wards on which the patient stayed, in this case paediatrics. However, the advent of service line reporting (SLR) and the Trust s own bottom-up profitability calculations using the PLICS database have shown that the admitted patient services make a strong positive contribution to Trust overheads, and outpatient services break even in the round. The 2011/12 analysis shows that for all children's admissions (i.e. under 18 years of age, excluding obstetrics and well babies) the contribution to Trust overheads was 27% 7. In 2011/12, services for children generated 21.5m of income, with direct costs of just over 15.5m, giving a contribution of 5.8m to overheads and central costs. In 2012/13 income and contribution rose to 21.7m and 5.9m respectively. Within this, elective admissions generate 1m of contribution, emergency admissions 2.3m and day cases 2.5m. This is summarised below: Table 7: Income base by point of delivery ( 000) Point of Delivery 2011/12 ( 000) 2012/13 ( 000) Income Costs Contribution Income Costs Contribution Emergency admissio 11,319 9,016 2,304 11,545 9,195 2,350 Elective admissions 5,393 4,357 1,036 5,279 4,265 1,014 Day cases 4,786 2,359 2,427 4,890 2,410 2,480 Other Grand Total 21,530 15,743 5,787 21,746 15,882 5,864 7 Source: SGH Finance Team, using SLAM data and SLR income, cost, and margin calculations. WT Partnership Health Consulting Page 31

32 This is shown by specialty below, ranked in order of contribution: Table 8: Income base by specialty ( 000) Point of Delivery Income Costs Contribution Paediatric Medicine 5,485 4,286 1,199 Paediatric Surgery 4,636 3,175 1,462 ENT 2,346 2, Trauma & Orthopaedics 2,162 1, Plastic Surgery 2,020 1, Neuro Surgery 1, Paediatric Oncology Maxillofacial Dental General Surgery New Born Services General Medicine Gynaecology Cardiology Urology Neurology Cardiac Surgery Paediatric Intensive Care Unit Clinical Infection Unit Thoracic Surgery Endoscopy Vascular Surgery Dermatology Diabetes/Endocrinology Rheumatology Clinical Haematology Pain Clinic Audiology Grand Total 21,411 15,566 5, Location of services Children's services are located in a number of dedicated areas of the Lanesborough Wing and elsewhere: Table 9: Service locations Name Content Capacity Location Frederick Hewitt Ward Pinckney Ward General inpatients Oncology, haematology and infectious diseases 17 staffed beds in four-bed rooms and five single rooms 15 staffed beds in 11 single rooms, and one four bed bay, including four negative pressure isolation rooms Ocean Ward Neuroscience 8 staffed beds in four- and one-bed rooms Lanesborough Level 5 Lanesborough Level 5 Lanesborough Level 5 WT Partnership Health Consulting Page 32

33 Name Content Capacity Location Nicholls Ward Inpatient surgery 17 staffed beds in four bed bays and single rooms Jungle Ward Paediatric intensive care unit Dragon Children's Centre Paediatric assessment unit (PAU) Day treatment and procedures Intensive care/high dependency 15 staffed beds Use of 2 theatres in main theatre suite Lanesborough Level 5 Lanesborough Level 1 10 beds Lanesborough Level 1 Outpatients All clinics Lanesborough Level 0 Short stay emergency patients Being expanded to 6 beds ED In summary, there are 57 dedicated inpatient beds, 10 ITU/HDU beds, 15 day beds and 6 PAU beds In addition, children are treated on various surgical wards depending on the specialty of the admitting consultant. The children's services share the fifth floor of Lanesborough with two other units at present: Duke Elder Ward is occupied by a satellite unit of Moorfields Eye Hospital, and is run as a day surgical unit with two operating theatres and 18 day beds. This will be relocating to new facilities in the near future, leaving the ward vacant for the children's services. All of the income associated will move to the new facility. Dalby Ward is an elder care unit, which similarly will be relocating in the near future. While Dalby is physically in good condition, it has no en-suite accommodation and is not designed to care for children and young people Length of stay and bed requirements The analysis of the under 18 patient group in the hospital shows that the elective and emergency length of stay is just well below 2 days. This reflects a 20% reduction in emergency length of stay since the introduction of new protocols with the opening of the paediatric assessment unit in the Emergency Department, and an overall reduction of 2/5 ths over five years. This is graphed below: WT Partnership Health Consulting Page 33

34 Figure 4: Length of Stay Trends (patients up to the age of 18) Length of Stay Elective Emergency The impact of length of stay reductions is that beds are systematically freed up to enable admissions of patients under new and innovative care pathways, such as the enhanced care regime for children requiring ventilation, and better medical day care. This is tabulated below: Table 10: Bed configuration Element Beds Comment Current staffed beds 57 Gains from PAU (4) Gains from LOS reduction to date (6) Future gain from LOS reductions (2) Applied to MDU 4 Used for enhanced care patients 4 Revised baseline by Medical day patients who can be treated on the ward Two beds already on children's wards for this patient group, 2 additional from NNU and PICU This shows that over the next two years, it is expected that four additional beds will be freed up. There are several developments which are likely to create demand for additional beds: Oncology a review of primary treatment centres (PTC) and paediatric oncology shared care units (POSCU) in London suggests that care may be concentrated in specialist centres. Trauma and neurology the new helipad has already seen an increase in paediatric trauma and neurology admissions, which is likely to continue as major trauma is increasing concentrated in the four designated major trauma centres in London. WT Partnership Health Consulting Page 34

35 Planned Actual St George s Healthcare NHS Trust Full Business Case v1.6 Teenagers in hospital it is estimated that at any one time, four adolescents are treated as inpatients in adult wards. Older teenagers should be offered the choice of children's and adult accommodation and it is expected that the majority would opt for treatment on an adolescent unit within the main children's service. Private patients there is sufficient demand for two beds to be used for private patients. General growth growth in admissions of at least 1.8% per annum is expected by commissioners for electives. Market share the quality of facilities is undoubtedly a factor in the choices that patients exercise in deciding where to go for treatment. Even without a new facility, better marketing can (and has) result in more referrals, particularly as the Trust has a 5% tariff advantage over central London hospitals due to a lower Market forces Factor (MFF) on the tariff. A 3% growth is expected from increased market share. This is expected to require some additional 15 beds in the medium term, tabulated below: Element Beds Revised baseline Additional teenagers, private patients, general growth and market share gain 11 Oncology 2 Trauma/neurology 2 Unit in occupation 68 Conversely, the 5% growth factor identified above suggests that in the next five to six years, an additional beds will be required to accommodation the expected natural growth in admissions, in addition to the specific developments in trauma and oncology. Basis Year Baseline Spells Catchment Spells Grand % Growth Total % Growth Total , % , % 424 5, % , % 489 6,072 Spells ALOS* Occy ** Bed days Beds % 109 6,181 3% 182 6, % % 111 6,292 3% 190 6, % 1, % 113 6,405 3% 199 6, % 2, % 115 6,520 3% 209 7,300 1, % 2, % 117 6,637 3% 219 7,636 1, % 3, % 119 6,756 3% 229 7,984 1, % 4, Teaching, training and research Research The children s unit already delivers substantial research output but has the potential for substantial increase. WT Partnership Health Consulting Page 35

36 St George s NHS trust is partnered with St George s University of London (SGUL), which has emphasised and resourced four key areas in research. The Division of Clinical Sciences incorporates the research area of Infectious diseases and Immunity, in which there are two Paediatric Professors. Between them, they have been awarded over 2M of grant funding, and they have developed a successful academic department of Paediatric Infectious Diseases. This department has several PhD students and runs trials in the UK and Europe. St George s is also a funded hub for the national initiative Medicines Research for Children Network (MRCN) which enrols patients for national studies. In the future it is likely that one of the criteria for designation as a tertiary hospital will be metrics around research activity. The strategic development of the children s department is important for developing the research strategy in the department and the trust. Clinical trials are based on patients, and a high throughput of cases and a position as lead centre for a network is essential for this. Improved working practises and better facilities will therefore enable St George s to strengthen its research standing. Conversely, failure to maintain and develop specialist services will in the long term lead to the hospital falling behind in terms of research and weakening ties with the medical school Teaching and Education SGUL has over 1300 medical students, and there are also nursing, physiotherapy, physician assistant, paramedic and other courses that require access to patients. These courses are essential to SGUL and important to the hospital financially and professionally, with over 800,000 income into the children s directorate from SIFT. Nursing students training to be children s nurses constantly pass through the inpatient wards times, from both Kingston University and King s College. It is crucial for future recruitment and retention in the department that these trainees have a positive experience of evidence based practice to enhance the care of children and young people. Current facilities restrict learning as there is no teaching or seminar room on the same level as the inpatients. This falls below the SGUL teaching standards. Development of the PAU and inpatient area offers opportunity for improved teaching and learning Training in Paediatrics and Paediatric Surgery Currently training for doctors is commissioned and administered by the London Deanery. Locally training is delivered by consultants and other staff according to Deanery stipulations. Access to patients, dedicated clinical training time, supervision, rotas and facilities are all criteria used to approve posts for training. Recent reviews of training conditions have been complementary for paediatric medicine, but raised issues with exposure of surgical trainees to sufficient cases. Some of these issues will be resolved in job planning, but others require refurbishment of facilities. This includes rest areas for doctors, adequate IT and training rooms. One of the expected results of the development of the 5 th floor will be a higher turnover of patients, which will be beneficial to training. For both paediatric medicine and paediatric surgery, the trust is applying jointly or with partners to be a Lead Provider for training. Outdated facilities at the locality of the lead provider are incompatible with being a provider of modern training. Updating the facilities will therefore be beneficial to training and teaching. WT Partnership Health Consulting Page 36

37 3.12 Physical condition Figure 5: Institutional Feel Overview The majority of the inpatient care for children is carried out in the Lanesborough Wing, which was designed and built in the 1970s and opened in It is clear that the development in standards for health facilities in the intervening decades has caught up with it it is no longer fit for modern healthcare. Figure 6: Current Condition - Overcrowding This is particularly true for space requirements, which have risen substantially as a result of: More stringent control of infection regime requiring greater spacing between beds and more hand washing facilities An increase in the amount of medical equipment in use on the ward The need for more single rooms to provide greater privacy the target is at least 50% single rooms. The need for more en-suite sanitary facilities. WT Partnership Health Consulting Page 37

38 Figure 7: Current condition lack of storage space The key problems with the current facilities are: Insufficient single rooms, and overcrowded four bed bays, mean there is a lack of privacy for patients. Lack of en-suite sanitary facilities. Only 12 of 57 beds (less than one quarter) have access to en-suites, meaning that patients have to walk into public areas to access toilets and showers. Lack of space, particularly between beds. Windows are energy inefficiency and need replacement. Overall patient experience in terms the quality of the building is poor. Décor and aesthetics should be improved to assist patient recovery, and wellbeing. Control of air temperature, ventilation and acoustics is poor. Fire systems need to be upgraded to modern standards Access is frequently constrained by lift outages. Generally poor functional suitability. Poor clinical adjacencies. Poor separation of ambulatory care, inpatient elective care and inpatient non-elective care. Low flexibility for the inevitable further development of healthcare needs of the future. A significant maintenance backlog. WT Partnership Health Consulting Page 38

39 Figure 8: Sanitary facilities In summary, the current facilities fail in terms of: Physical space and layout. Sanitation. Privacy and dignity. Infection control requirements. Temperature control and lighting. Being child and young person friendly. Figure 9: Current Condition - Hard to Clean Surfaces As a major centre for children's inpatients, the hospital is therefore operating out of facilities that are clearly inadequate. The Trust is fully committed to improve the proportion of single patient bedrooms in the hospital, in part to support the continued reduction of mixed sex accommodation but also to make St. George s a more attractive environment in which to care for patients. Currently 21% of paediatric services bed stock is made up of single rooms with en-suite facilities. This project will increase the percentage to 50%. The aim is to be recognised for our high quality care provided in state of the art buildings that are welcoming for patients. WT Partnership Health Consulting Page 39

40 Maintenance Backlog The physical condition, statutory compliance, functional suitability, quality, energy efficiency and space utilisation were assessed in the 2010 Six Facet Survey carried out by independent assessors the Oakleaf Group. The key maintenance outputs of the survey and subsequent investigations were: The maintenance backlog (excluding VAT, fees and on costs) on Level 5 stood at 520,000, of which four fifths was related to the fabric of the building and one fifth to engineering. The windows for the entire block need replacement. The cost for refurbishing (rather than replacing) is 1,223,000 in total, with the share for Level 5 estimated at 245,000 (1/5 th of the total). More recent estimates are that to replace the Level 5 windows would cost some 1.1m. The vents and air conditioning need attention, now valued at 1.671,000 Fire systems need replacement, costing more than 1.5m, of which one fifth ( 308,000) could be attributed to Level 5. The roofing had reached the end of its useful life (it has been replaced since). Taken together, these build up to a requirement to spend in the order of 3.6m just to attain statutory compliance and bring the existing (inadequate) configuration up to Condition B. These costs, when fees, inflation estimates, contingency and VAT are added, total 6.1m. Table 11: Backlog maintenance summary Element Total 000 Internal fabric 415 Engineering water 2 Engineering heating 0 Engineering electrical 104 Roofs 0 Ventilation and air conditioning 1,671 Fire systems 308 Windows 1,100 Other 0 Total 3,599 Fees - 15% 540 Contingency - 10% 360 Inflation - 5% (to 2010) 225 VAT -20% (not on fees) 837 Subtotal 5,561 Subsequent inflation 492 (PUBSEC 192 to 209 3Q15) TOTAL 6,053 WT Partnership Health Consulting Page 40

41 On the same basis, the maintenance backlog for Level 1 was over 650,000 plus some 50% for fees, inflation, contingency and VAT, of which 100,000 was engineering and the rest buildings. Of the total, some 1.95m can be attributed to theatre and day case area maintenance. For comparison, the maintenance backlog for the whole building was estimated at 12.3m (works cost), plus window replacement on the 4 th and 5 th floors, which would indicate an outturn cost of over 20m Technical Issues The technical problems of operating in an ageing building were outlined in a 2010 report by RSP Consulting Engineers LLP. The issues identified stem largely from the age of the plant and design, relating to: Overheating, caused by solar gain through windows and roofs, and poor ventilation to extract excess heat. Heat emitters need replacement and better controls throughout the building. Cooling needs attention, with numerous local cooling units. Ventilation plant is time-expired. Water pipes would need to be upgraded to enable the updating of sanitary ware for ensuite toilets and showers. Figure 10: Current Condition - Lack of Privacy and Dignity in Sanitary Facilities Insulation is in poor condition and needs replacement. Medical gas systems need replacements Low voltage electricity supply and lighting needs replacement. Isolation rooms are not fully air tight and have obsolete air extraction systems. The nurse call system is obsolete and needs replacement. WT Partnership Health Consulting Page 41

42 The fire alarm system needs to be upgraded with smaller zoning, possibly reusing existing panels. Air handling plant in theatres and recovery Level 5 theatres is obsolete and at the end of its working life Energy Efficiency The energy efficiency of the wing has been assessed annually in recent years, using HM Gov. Display Energy Certificate (DEC) system. This measures relative energy consumption on a scale from A to G, where A is best and G is worst. Typical buildings perform around the D/E threshold, set at 100. The Lanesborough Wing has the following scores: Table 12: Energy ratings. Year Rating Grade F G F F The boundary between F and G is 150, which means that the building is only a few points above the worst possible rating for energy efficiency, and uses 50% more than the average building of its type, and even more compared to the best performing buildings. These problems can only be addressed through substantial redevelopment Lifts Lanesborough Wing has two bed lifts and one passenger lift serving 6 floors (ground fifth floor), which have a history of breakdown and unplanned maintenance. The lifts have recently been upgraded and are more reliable than in the past but they are still frequently out of operation. They come under immense pressure especially during peak times, and there is an increasing number of bed transfers between floors. If one of the bed lifts is out of use, this leaves only one for the whole Wing, which is inadequate to maintain patient safety, to ensure efficient patient flows and to deliver a good quality experience. Parents with their children (patients and siblings alike), and encumbered with prams and buggies frequently experience the inconvenience of long waits in busy public thoroughfares with no seating. There is clearly a need for dedicated lift facilities for young patients to offer a degree of privacy and segregation from other patient cohorts Space availability now and in the future St George s is a busy hospital with increasing levels of activity. The location, collocation and relocation of services must therefore balance competing demands for space. The Lanesborough wing is also home to maternity services, which under South West London collaborative commissioning plans is recommended to be the centre for further consolidation of high risk maternity care for South West London. This could entail an increase of one third in the number of deliveries, from 5,100 to 7,500 per annum, which in turn would require more space for obstetric beds. These are currently located on Level 4 of Lanesborough, along with gynaecology and some vacant space. An increase of one half in the births at the hospital would also have an effect on the numbers of children and babies admitted, to both children services and NNU, especially for surgical and medical problems in infancy. WT Partnership Health Consulting Page 42

43 The strategic plans for the site as a whole are currently being developed. Key building blocks of the site strategy include: Expanding facilities for cardiac and neuro-science Developing a private patients facility Accommodating the eye services provided by Moorfields Eye Hospital in new facilities Developing the first floor of the clinical buildings across the site as the integrated interventional platform or hot core, focusing on theatres, diagnostics and high dependency services Replacing the dilapidated Knightsbridge Wing and providing new facilities for renal services Providing more rational parking, entrance and road access One of the key assumptions in the current thinking is the presence of children's and women's services in the Lanesborough Wing, based around the fixed point of the children's inpatient development on the fifth floor. The overall requirement for the totality of children's and women's services has been calculated at some 36,000m 2. This may necessitate an extension to accommodate the additional space requirements generated by modern NHS building standards and specifications. These have been drawn together to create a vision for the controlled development of the site. One of the key assumptions in the current thinking is the presence of children's and women's services in the Lanesborough Wing, based around the fixed point of the children's inpatient development on the fifth floor. This may include an extension to accommodate the additional space requirements generated by modern NHS building standards and specifications. This is visualised below, showing a major development on the southern frontage of the hospital (yellow, purple and blue), as well as developments to the Lanesborough Wing (red): WT Partnership Health Consulting Page 43

44 The overall plan identifies several options for the future of Lanesborough Wing, including a potential extension to provide additional space at every floor of the existing building, and a sixth storey for additional functions: 3.14 Summary of the case for change Specific problem areas have been identified as follows: Inadequate space and lack of facilities leading to very sick children being moved long distances within the hospital for investigations and treatments. Operating theatres, including anaesthesia and other clinical services, lacking dedicated child-friendly facilities. Almost 50% of children are treated in adult operating theatres, scattered across the hospital. An unacceptable and inadequate environment on the children s wards: o o o o The wards are ageing, dowdy and tired with a lack of space and poor bathroom facilities. The ward areas are over-crowded, adding to the stress of patients, their families and the staff caring for them. There is little space to move around beds, for storage and play. This has led to overflow into corridor areas where thoroughfares are frequently obstructed and cluttered, creating an inefficient environment and serious health and safety issues. Whilst research has highlighted that the continuing presence of parents is a vital component in the wellbeing and recovery of children, the overnight arrangements for parents are inadequate. WT Partnership Health Consulting Page 44

45 The case for change can be summarised as: The current estate is not fit for purpose, and has been left behind by developments on health care building standards and models of care. It fails significantly in terms of privacy and dignity, infection control requirements, space and layout and patient experience. The minimum that must be spent, to bring the physical fabric, plant and engineering up to minimum standards, without addressing the quality, layout and privacy and dignity factors, is 6.2m. On-going trends and specific initiatives in the South West London sector point to greater demand on the Trust s children's services. The hospital must position itself to provide suitable modern accommodation for this activity. The first step is to get its existing bed stock up to a suitable standard. The overall standards expected by patients in terms of the environment in which healthcare is provided has risen and are expected to rise further. Patient choice is becoming increasingly important and the Trust must safeguard its position and reputation in the local health economy and further afield by providing an attractive and therapeutic environment. The impact of not addressing these issues will be to see the hospital fall behind in terms of facilities, services, teaching, training and research Desired benefits The SOC and Position Paper set out corporate objectives and the desired qualitative benefits for the redevelopment of the site. These have been refined to ensure continued applicability for children's services. Table 13: Benefits criteria Corporate objective SMART Characteristics Benefit Criteria Objective 1 To Provide outstanding quality of care, through: - Patient safety - Clinical effectiveness - Patient experience Zero HCIAs and SUIs Material reduction in length of stay and readmission rates Measurable improvement in patient and parent feedback and satisfaction Ensures that infection control and privacy and dignity standards are enhanced, for example implementation of single rooms. Provides enhanced departmental relationships and clinical adjacencies that support clinical effectiveness and improved patient outcomes. Provides patients with modern safe facilities that are conducive to patient care within a healing environment WT Partnership Health Consulting Page 45

46 Corporate objective SMART Characteristics Benefit Criteria Objective 2 To become an exemplary employer, through - Build a high performing workforce - Embed our values throughout our workforce Measurable decrease in staff turnover Reduction in posts unfilled after recruitment Improved scores from leavers interviews and staff surveys Provides a dynamic environment that enhances recruitment and retention Objective 3 To Strengthen education, research and innovation that will benefit our patients, through: - Meet our statutory obligations - Develop clinical research and innovation - Develop education and Training Objective 4 To build a leading integrated healthcare system, through: - Integration with Community Services - The 24/7 hospital - Implementation of South West London collaborative commissioning recommendations Objective 5 To deliver robust operational and financial performance, through: - Operational performance - Financial performance - Foundation Trust - Productivity and efficiency Objective 6 To continuously improve our facilities and environment, through: - Meet our statutory obligations - Site redevelopment - Energy efficiency Retain Deanery approval for training posts and increase numbers of staff in training under Deanery Increase numbers of clinical trials and research projects for students and qualified staff Reduction in emergency admissions Increase in consultant cover out of hours Accommodation of collaborative commissioning recommendations (once established and approved) Year on year reductions in unit costs Systematic identification and elimination of waste in operational areas Elimination of maintenance backlog Elimination of outstanding statutory non-conformities Measurable reduction in energy consumption Provides the dynamic environment of a centre of excellence for tertiary care in children's services, encouraging retention, training and education Enhances the international reputation of the Trust as a centre for research and training in excellence Enhances integrated care and development of seamless pathways of care and patient choice. Provides enough capacity to meet demand, enabling redesign of models of care that will ensure patients receive the right care in the right place. Enables delivery of specialist primary care and hospital services across the population Provides flexibility, enabling staff to work more efficiently. Ensures all legislative, health & safety and universal norms of safety requirements are met Provides future flexibility for space utilisation as service develop and adapt to changes in National policy The benefits criteria can be summarised as: 1. Patient safety is enhanced, in terms of infection control and other safety measures. WT Partnership Health Consulting Page 46

47 2. Quality of care is enhanced, in terms of the model of care, and seamless pathways of care and patient choice. 3. Patient experience is enhanced, in terms of privacy and dignity, and the quality of environment that is child and young person focused. 4. Provides enhanced departmental relationships and clinical adjacencies that support clinical effectiveness and improved patient outcomes. 5. Provides a dynamic working environment that enhances recruitment and retention, training and education 6. Provides enough capacity to meet demand, and provides flexibility, for the future and fit with the Trust s strategic plans In addition, the ease of implementation will be a key issue. Any plans that require extensive phasing, or widespread disruption, dust, noise or vibration should be avoided Constraints There are several constraints within which the scheme will have to be delivered. These are: Financial the Trust has a limited capital budget, and must seek approval from NHS London (or its successor organisation) for any expenditure of over 3m of Treasury capital (i.e. excluding funds from donations). The Trust has access to some 16.1m for this scheme, of which 6m is expected to come from charitable funds, as well as 3.9m in backlog maintenance funding. Physical the existing accommodation is heavily occupied, making phasing difficult, and reducing the potential to comply fully with NHS Health Building Notes (HBNs) and Health Technical Memoranda (HTMs). Organisational any development of the fifth floor is dependent on Moorfields vacating Duke Elder ward in a timely fashion, and Dalby ward, currently used for senior health care, being vacated, and sufficient beds provided to manage winter pressures in adult care. Timing the hospital is likely to become the centre for all inpatient children's services in South West London in the next couple of years, and must therefore have options to open additional inpatient and assessment beds. The redevelopment of the fifth floor is a stand-alone development and is not predicated on any other floors being changed. As such, the programme could in principle stop after this phase, with no significant knock-on effects in terms of commitments to further works Fire Access and Egress Since the OBC was developed, discussions with the Trust s nominated Fire Officer have led to the conclusion that the current fire egress arrangements, while consistent with the current usage of the fifth floor, would need significant enhancement to safeguard patients if additional workload were planned for Level 5. The key constraint is the developments in best practice and statutory requirements for fire zone planning and lateral egress, which have evolved considerably since the Wing was built. Lateral egress is only possible if the wing is physically linked to another on the same level, which is impractical. This means that any usage which increases the fire escape requirements above the current level is problematic. Any additional patients in a state of high dependency or intensive care, such as ventilated or immobile patients (other than those receiving enhanced care who would otherwise be cared for at home) and patients under anaesthetic, would pose an unacceptable level of risk. WT Partnership Health Consulting Page 47

48 3.17 Stakeholder Support The objective of creating a new children's hospital facility has the widespread support of the clinical community, and explicit support from service commissioners at PCTs and now CCGs and NHS England. Letters of support for this scheme, and its financial implications, are appended. WT Partnership Health Consulting Page 48

49 SECTION 4: ECONOMIC CASE 4.1 Introduction The economic case has developed significantly since the OBC was approved in the Spring of The key reason for this is the developments in the design of the preferred option. This was required because elements of the design envisaged at OBC stage proved unfeasible for technical engineering reasons once the detailed design commenced. This section therefore outlines the original preferred option, with a description of the developments in the design that have taken place since. 4.2 The preferred option at OBC stage The OBC identified the base case as the preferred option, based on an assessment of the quantitative and qualitative benefits that would accrue. It envisaged the complete refurbishment of the entire fifth floor including theatres, and its use for children's services alone. This would be enabled by the vacating of the ophthalmic day unit on Duke Elder and the care of the elderly ward on Dalby, as conceived in the 2010 Briefing Report. 4.3 Issues Arising from Detailed Design Phase Once the OBC was approved by the TDA in October 2013 the detailed design phase was carried out. This has led to a number of considerations emerging which could not have been anticipated at OBC stage: The original plan was to extend the floor area available on Level 5 by the introduction of external pods. This was aimed at providing sufficient space for both beds and theatres to enable these areas to meet modern standards. The pod design concept assumed that it would be possible to cantilever the weight of the pods onto the existing steel and concrete structure of the building, as the original structure was deemed sufficiently strong to bear the additional load. However, the detailed structural survey revealed that the existing structure was fully loaded. This was due to the accretion of several structural loads over the course of the years, viz. the Lady Youde Centre (suspended within one of the light wells at Level 3) the MRI unit and other infill. Alternatives structural solutions were considered, which focused primarily on strengthening the structure through the use of steel struts with piled foundations to underpin the pods. However, these generated their own problems: o o o o o Internal struts would have to be piled through existing clinical space, entailing disruption, noise, dust, vibration and loss of space in operational areas. The pods above the MRI unit could not have steel struts because of the proximity to the magnet. The external struts would require planning permission The rear elevation struts would pass through two floors of existing structure (Levels 0 & 1) Without the internal pods, revised sample 1:50 drawings convincingly demonstrated that there would not be enough space for the recommended theatre layouts, and bed layouts would be severely compromised in terms of space and operational use. WT Partnership Health Consulting Page 49

50 4.4 Functional content solutions A workshop was therefore held with stakeholders from all the clinical services represented. This discussed four variations to the functional content to resolve the situation: A - Keep the external pods only and reduce space allocation for all departments B Remove pods and move theatres and recovery to 1st floor. Day care and wards remain on 5th floor C - Remove pods and move theatres, day care and recovery to 1st floor. Wards remain on 5th floor, D - Remove pods and move wards to another floor. Theatres, day care and remain on 5th floor, These were evaluated against a number of criteria, relating to the amount of space available and the model of care that would be enabled. The broad evaluation and the conclusion of the group was: The pods were themselves a compromise response to the lack of space to adequately accommodate the desired functional content while achieving modern space and layout requirements. Keeping only the external pods would further compromise the integrity of the design. A substantial reduction in the space delivered by the remaining pods would lead to a fatally compromised design. Configurations which split services (wards or theatres across floors also risk duplicating support facilities such as reception, play areas and parents rooms. Splitting the bed base amongst other floors would reduce nursing and medical staff efficiency. This would also complicate access to theatres, and have knock on impact on women's and other beds in the building. Concentrating children's beds on Level 5 was therefore seen as the best solution for this element, and it would have the additional benefit of enabling the bed base to expand in response to growth pressures. Theatre, if concentrated on Level 1, would be more efficient and offer a better all-round model of care. Conversely, splitting two theatres over two floors (1 and 5), without the benefit of having surgical beds nearby, would have less merit. However, it was accepted that not gaining two additional theatres on Level 5 when the space is taken back from Moorfields would mean that the desired developments in children's surgery, specifically the stated objective of consolidating all children's operating sessions in the Lanesborough Wing would have to be subject to a second stage plan. This plan would aim to create sufficient theatre capacity on Level 1 to allow all children's operating to be carried out there. In addition, if the theatres on Level 5 were not refurbished, the 5 sessions each week that are sublet from Moorfields would need to be re-provided elsewhere. In the light of these arguments, it was concluded that the best way to achieve the majority of the aims of the project would be to: 1. Abandon the pod concept and proceed to full design on the basis of producing a bed configuration that fits within the existing building skin. 2. To plan to expand operating theatre and children's day care capacity on Level 1 as the next major planning action. As a result, the design has been further developed to produce a floor plan within the existing building line, with 68 beds rather than the 60 beds and two theatres envisaged at OBC stage. WT Partnership Health Consulting Page 50

51 4.5 Confirmation of the preferred option at FBC stage Because the preferred option at OBC has been significantly modified, the scheme as it now stands has been compared with the do minimum option provide assurance that it remains the best course of action for the Trust Revised benefits assessment To assess the relative merits of the options. the expected benefits of the scheme have been compared with the do minimum option. The benefits criteria kept their relative weighting from the same exercise at OBC stage, and the options scored against the benefits: Figure 11: Benefits criteria Patient Safety 14% 5% 19% Quality of care Quality of patient experience 11% 19% Departmental relationships 16% 16% Recruitment and retention Strategic fit Ease of implementation The options were scored for their anticipated ability to deliver the desired benefits, with the following results: Table 14: Benefits scores Ref Benefits Weighting Option 1: Do Minimum Raw Scores Option 2: Scheme at FBC Stage Option 1: Do Minimum Weighted Scores Option 2: Scheme at FBC Stage 1 Patient Safety 19% Quality of care 19% Quality of patient experience 16% Departmental relationships 16% Recruitment and retention 11% Strategic fit 14% Ease of implementation 5% TOTAL 100% WT Partnership Health Consulting Page 51

52 This is shown graphically below: Figure 12: Benefits scores 1, Patient Safety 800 Quality of care Quality of patient experience Departmental relationships Recruitment and retention Strategic fit 100 Ease of implementation - Option 1: Do Minimum Option 2: Scheme at FBC Stage The benefits assessment showed that the FBC scheme was considered to be best in terms of the non-financial benefits it delivers, scoring well across a number of categories. The do minimum scored poorly in all areas except for ease of implementation. This is because it was considered to deliver no additional benefit in terms of patient safety, capacity, the environment for care, the model of care, and the work environment. It lies at odds with the Trust s stated intentions with regard to children's services Revised capital cost estimates The capital costs were estimated by the P21+ PSCP cost advisers, based on the cost plan associated with the schedule of accommodation and layouts developed by the scheme architects. As the options were largely or totally based on refurbishment, the costs were estimated on the basis of: Knowledge of the site in general and the building in particular, acquired from numerous previous refurbishment-based developments. Knowledge of local market conditions and prices. Nationally defined cost indices and inflation assumptions. For the do minimum option, costs were taken from the 2010 estates condition survey (cost to achieve Condition B ) and additional estimates for the replacement of windows, negative pressure isolation rooms and theatre air handling plant on Level 5. These have been updated for inflation since WT Partnership Health Consulting Page 52

53 Table 15: Options capital cost summary 000 factor Option 1: Do minimum Option 2: Scheme as it now stands Works 5,199 13,605 On costs 412 Construction costs 5,199 14,017 Non Works costs 1,310 Fees 780 1,705 Equipment 1,500 Contingency 520 1,982 Inflation Optimism bias 0 VAT 1,339 3,291 TOTAL INDICATIVE SCHEME BUDGET 8,812 23,805 The cost of the do minimum is estimated at 8.8m, whereas the developmental scheme costs were estimated at 23.8m. The OBC cost was estimated at 20.0m. The key differences to the OBC cost estimate are: Mechanical and electrical engineering. This relates principally to the replacement of engineering systems in the Lanesborough Wing. This is an addition to the original scheme and was considered necessary because of the dilapidated state or inadequate capacity of the systems. o Bus bars to increase electrical capacity - 750,000 o New independent Hot and cold water supply from Level 2-200,000 o Heating supply from Level 2 plus constant temp system to feed air handling - 150,000k o Building Management System controls to Level 2 and roof-mounted plant 400,000 o New medical gas plant 100,000 Interior design. Inflation. There has been a large rise in building inflation since early 2013, as measured by BICS inflation index 8. The starting point for the construction phase has also gone back 6 months. Additional cost 2.1m. Fees. These have risen in line with the total cost. As the mechanical and electrical element is essential maintenance and upgrade, this is also shown in the revised do-minimum option. The detailed reconciliation is tabulated below: 8 Building Cost Information Service of the Royal Institution of Chartered Surveyors, based on tendered prices WT Partnership Health Consulting Page 53

54 Element 000 Includes element of: Pods (864) Lift (592) Theatres (660) Omitted (2,116) Windows (to fill pod frontages) 228 Backlog, HTMs & firecode Cooling (as result of pod omission) 452 Backlog, HTMs & firecode Plant screening 151 Whole building benefit Electrical infastructure 433 Whole building benefit Medical gas supply 239 Whole building benefit Water supply 239 Whole building benefit Heating 373 Whole building benefit Control systems 414 Whole building benefit Fibre optic cabling 43 Equipment & furniture 541 Enhanced design Building alterations 166 Enhanced design Wow design 140 Enhanced design Design fees 370 Trust costs 99 Inflation 2,058 Added 5,946 Added Total movement 3,830 Within the overall changes, several themes have been identified: Whole building engineering elements. Several items have been added to the scheme to reflect the need to address issues with the whole building such as: Electrical supply Hot and cold water systems Heating systems Engineering controls Stairwells These have been included where the additional cost is justified because of the need for investment for the rest of the wing, and where the timing is opportune. It may relate to: increasing the capacity of the whole building remedial works that only make sense at a whole building level additional plant/engineering that has a duel effect (i.e. necessary of level 5 but also helps reduce the load elsewhere) Backlog maintenance. The OBC had an allowance for 3.9m of backlog maintenance in the 20m figure. This has been updated to allow for other elements of backlog that have been incorporated into the current iteration of the design. The backlog element of works now totals 6.05m, including inflation and VAT as set out below: WT Partnership Health Consulting Page 54

55 Element 2015/6 2016/7 2017/8 Total Internal fabric Engineering water Engineering heating Engineering electrical Roofs Ventilation and air conditioning 311 1, ,671 Fire systems Windows ,100 Other Total 1,001 2, ,599 Fees - 15% Contingency - 10% Inflation - 5% (to 2010) VAT -20% (not on fees) Subtotal 1,547 3, ,561 Subsequent inflation (PUBSEC 192 to 209 3Q15) TOTAL 1,684 4, ,053 Enhanced design. Design standards have been deliberately set high with the expectation that the project will be a stand-out design that will act as a reference for other hospital developments. However this does come at a price, for a number of reasons: The designers have striven for maximum compliance with the most recent design and building guidance as expressed in Health Building Notes and Health Technical Memoranda. Furnishings and finishes have been enhanced with a view to creating an excellent ambience, particularly given the varying and special needs of the client group, as well as first class clinical space. The estimated additional cost of the enhanced design is 1.05m, tabulated below: Enhanced Design 000 Enhanced finishes details 278 Equipment including modular furniture (details not known at OBC) 514 Provision for implications of Artinsite design 141 Enhanced doors - estimate 120 Total 1,053 Contingency. The cost plan has a contingency sum of just under 2m. The P21+ contract will contain a shared, costed risk pool to deal with emergent risks during the course of the project. If the identified risks are not realised, the pool will be shared between PSCP and Trust. WT Partnership Health Consulting Page 55

56 4.5.3 Revised income & expenditure estimates The marginal income and expenditure impact of the options has been estimated, using the growth assumptions for the sector, consistent with the Long Term Financial Model (LTFM). These show deficits in the construction phase and the first year of operation for the scheme, largely associated with capital charges coming into play before the asset is fully in use. From 2018/19 the scheme yields surpluses. This is compared with consistent deficits for the do minimum option. These are summarised below and explained in more detail in the financial case. 2014/ / / / / /20 Option 1: Do minimum Income Option 1: Do minimum Expenditure 0 (451) (576) (630) (618) (612) Total 0 (451) (576) (630) (618) (612) Option 2: Scheme as it now stands Income 0 0 (81) 5,539 8,068 8,101 Option 2: Scheme as it now stands Expenditure 0 (167) (850) (5,775) (7,147) (7,066) Total 0 (167) (931) (236) 921 1, Cost Benefit Analysis of the Scheme as it Now Stands Government investments are subject to the HM Treasury discounted cash flow (DCF) technique to reflect the time value of money. The combined capital and revenue cash flows associated with the options were compared to produce an overall assessment of their economic profile. Financing costs such as interest, principal repayment and depreciation are ignored for this analysis, as this represents a circular flow of funds to the public purse. The cash flow was then discounted using HM Treasury s standard discount rate (3.5%). This provides a comparable figure for the total cost or benefit of the investment over its economic life. Both options assume a life span of 25 years. These calculations take into account: Capital development costs and other non-recurrent payments. Whole life cost of buildings and equipment. Operating receipts and payments. The sum of the discounted cash flows yields a net present value, which may be positive or negative (net present cost ). These were then set against the anticipated benefits as expressed in the benefits scoring exercise, to provide a cost/benefit analysis. The results are tabulated below: Table 16: Cost Benefit Analysis Element Option 1: Do minimum Option 2: Scheme as it now stands Net present (cost)/value 000 (9,377) 11,734 rank 2 1 Weighted benefits score rank 2 1 Cost : Benefit ratio (27) 13 rank 2 1 WT Partnership Health Consulting Page 56

57 This shows that the scheme as it currently stands has a positive value over its economic life, and has the highest benefits score. By comparison, the do minimum has significantly fewer benefits and a negative net present value. This confirms the scheme as it now stands as the preferred option. 4.7 Description of the Preferred Option at Detailed Design Stage Clinical adjacencies The preferred option will create a state-of-the-art facility for children at St George s, representing a substantial step in achieving most current standards for the built environment in which care and treatment is provided. It will remodel the entire 5 th Floor of the Lanesborough Wing, and consolidate the children's inpatient service on it. It will be the most modern facility available in the area and will be a landmark in the health landscape. The change from current to future state is tabulated below: Table 17: Children's Services Current and Future State Summary Name Content Current Capacity Current Location Future capacity Future location Frederick Hewitt Ward General inpatients 17 staffed beds in four- -bed rooms and five single rooms L boro Level 5 68 beds in a mixture of single (50%) and 3 bed rooms, all with en-suite. L boro Level 5 Pinckney Ward Oncology, haematoology and infectious diseases 15 staffed beds in 11 single rooms, and one four bed bay, including four negative pressure isolation rooms L boro Level 5 Five isolation rooms with negative pressure air flow 9 Shared support and parent areas Ocean Ward Neurology 8 staffed beds in fourbed rooms L boro Level 5 Nicholls Ward Inpatient surgery 17 staffed beds in four bed bays and single rooms L boro Level 5 Paediatric intensive care unit Intensive care 10 beds L boro Level 1 As is 10 L boro Level 1 Theatres Mixed adult and children's lists 3 theatres L boro Level 1 Two children's theatres (current children's lists and consolidated from adult lists elsewhere in hospital) L boro Level 1 One adult theatre (women s) 11 9 NB 1 extra to facilitate the phasing of works 10 NB for expansion in next stage 11 NB for expansion in next stage WT Partnership Health Consulting Page 57

58 Name Content Current Capacity Current Location Future capacity Future location Jungle Ward Day treatment and proc s 15 staffed beds Use of 2 day theatres (in main theatre complex) L boro Level 1 As is 12 L boro Level 1 Dragon Children's Centre OPD 10 clinical rooms L boro Level 0 As is L boro Level 0 Paediatric assessment unit (PAU) Short stay emergency patients Being expanded to 6 beds ED, St James Wing Level 0 As is ED, St James Wing Level Functional Content The details of the areas to be used on Level 5 are tabulated below: Table 18: Summary schedule of accommodation Element Single Beds in Rooms Bays Total Beds Area (m 2 ) Ward Ward Ward Ward Total ,888 Main entrance 180 Staff areas 185 Shared support areas 566 Communications and plant 571 Total 4,390. This represents: 68 inpatient beds with en-suite WC/shower, 50% single rooms Designated areas for adolescents (8 beds) 5 isolation rooms with negative pressure air handling 13 Shared ward support areas with reception and administration, waiting and play areas, parents rooms, teaching rooms. 12 NB for expansion in next stage 13 NB Four isolation rooms were originally planned, but due to phasing requirements, a fifth will be created and maintained in operation WT Partnership Health Consulting Page 58

59 The ward areas will enable gender separation as appropriate. The detail design will be carried out with suitable user involvement. The 18 bed wards will each have the following content: Unit Unit 1 18 beds Room Average area (m2) Number Total area (m2) 3 Bed Bay Single Room Clinical/Treatment Ensuite Staff & administrative Ancillary Storage Circulation Planning & Eng Total 732 The 16 bed wards will have one less three bed day, but will each have two additional single rooms, set up with controllable air-flow for isolation purposes. As well as the main clinical areas being designed with children and young adults in mind, particularly in terms of finishes, there will be other child- and family-friendly facilities: 3 Children's play areas (one of which is a sensory area) Teenagers area, with recreation/technology room Teaching room, multi-disciplinary team (MDT) office and meeting room Breast feeding room Nappy change room Two parent lounges Breast milk kitchen Staff changing facilities Two separate fully assisted bathrooms Chef kitchen and prep room for bespoke meals Large equipment store Bed store Therapy room School room Admission discharge lounge and coffee lounge Dedicated reception areas WiFi access throughout The scheme will include educational facilities for medical staff in training, nurses and allied medical professions, including a seminar room. The additional work going through the unit, as well as the better co-location of related areas will create a better overall training environment that will be attractive to students and trainees. WT Partnership Health Consulting Page 59

60 Hospital design in the UK has for many years been assisted by published guidance in the form of Health Building Notes (HBNs) covering design, layout and departmental relationships, and Health Technical Memoranda (HTMs), covering technical aspects such as services, plant, air handling and environmental controls. In a new build it is relatively straightforward to plan the facility to meet all or most of the available guidance. In a refurbishment, this is less feasible, because certain elements, such as the load bearing structure, the overall building envelope and footprint, access routes and thoroughfares, and the plant and services are to a great extent predefined. Thus achieving the guidance in full may be technically difficult, financially prohibitive or unacceptably disruptive or timeconsuming to a building in which remains in use during the programme. However, two of the key design policy objectives have been met: Single Rooms over half of the beds in the unit will be in single rooms, with the remainder in three bed rooms. En-suite sanitation all bedrooms will have en-suite WCs and showers. A full list of relevant HBNs and HTMs, and the points of departure from the guidance therein is appended (Schedule of Derogations) WT Partnership Health Consulting Page 60

61 The scheme for the fifth floor is shown in outline below (reduced view of 1:200 scale drawing): Figure 13: Floor plan. WT Partnership Health Consulting Page 61

62 4.8 Interior Design The overall aim for the interior design is to ensure a finish that is exemplary in all aspects, to meet the needs of the children, young people and families both clinically and aesthetically. Children and young people will be cared for in a bright, modern, friendly environment. It will be conducive to excellent care and enable all members of the family to feel safe, well cared for, entertained, happy and able to rest and recover. The aim is to ensure we meet the needs of all our children and families from a diverse population and ethnic mix. Practical yet dynamic designs will be created to suit the multiple needs of patients. To create spaces that are contemporary, beautiful, inspiring and innovative. It is essential that the environment is inviting and appealing to children and young people without being overly agespecific or patronising to young adults. Artists, designers and illustrators will help shape contemporary clean designs, created with and for children and their families which will be housed in the spaces to promote a sense of health and wellbeing for all.. The process to achieve this involves a number of steps; An interior design advisor was appointed Previous work with children, schools, Wandsworth Youth council and parents was used to inform the designers These ideas were retested with current inpatients and outpatients throughout the summer of 2014 The learning from multiple visits to many other children s hospitals was used to inform the process A range of design ideas was prepared by the end of August 2014 to share in work shops Workshops will be set up throughout September and October to engage with children, families, staff and the local community ( some may be filmed) The work stream will collate the ideas and thoughts from the workshops by the end of November; Final sign off of internal finishes and art work by December Design Evaluation The UK Government demands that all public building schemes meet high environmental standards, measured using a number of factors such as energy consumption, waste management, health and wellbeing and pollution, defined by the Building Research Establishment s Environmental Assessment Method (BREEAM). For refurbishment schemes, the target level is an assessment of very good, or a score between 55 and 70 out of 110 individual elements. This scheme has been preliminarily assessed by the Trust s technical advisers at 62.5, tabulated below: WT Partnership Health Consulting Page 62

63 Table 19: Preliminary BREEAM assessment Element Score Management 9.0 Health & Wellbeing 9.2 Energy 6.3 Transport 6.8 Water 3.0 Materials 9.2 Waste 6.4 Land use/ecology 4.0 Pollution 6.7 Innovation 2.0 Total 62.5 The quality of the design for users is usually assessed by users through the Achieving Excellence Design Evaluation Toolkit (AEDET) 14. This evaluates the building s character and innovation, form and materials, staff and patient environment, urban and social integration, building performance, engineering, construction, fitness for use, access, and space. This would normally be carried out once the scheme is in the design phase, and a provisional AEDET exercise has been carried out. However, the Trust is a now designated site for the Department of Health (DH) pilot scheme for the Design Quality Indicator (DQI) and the first assessment workshop was held in July 2013, some 50 participants from clinical, nursing, managerial, professional and technical, charity, and estates roles. This report will be ground breaking as it reflects the first ever full workshop of the new DQI for Health tool. The Trust is cooperating with DH and NHS England towards a standardised methodology, including the report itself. A second assessment will be made once the building is in use. The DQI design workshop yielded the following results: 14 Draft AEDET results are appended WT Partnership Health Consulting Page 63

64 Scores for all ten sub-sections are above 4 and six of the aspects score above 5 out of 6. This shows that the design proposals are achieving good consistency across the ten subsections with a lower rating for Urban and Social Integration: in the context of a refurbishment project of this nature, that is not a concern. The scores were also compared with the maximum possible for the subsections: There has been extensive consultation with staff and users (including local school children) with ideas for the new unit, including: An open day for all staff. Staff survey. Consultation with the local Youth Council. Consultation with in-patients and their parents Exercises in local primary schools to garner children's ideas for the new unit hospital 15 There have also been numerous user visits to other children's units to inform the design, including: Royal Marsden Evelina Children s Hospital at St Thomas Chelsea and Westminster Bart s and the London Royal Manchester Children s Hospital Royal Alexandra Hospital for Children 15 See appendix 15 Stakeholder Engagement WT Partnership Health Consulting Page 64

65 Great Ormond Street 4.10 Decant Arrangements A detailed decant programme is being developed and will be included in the full business case. The key elements to be addressed are highlighted below Moorfields Ophthalmology Services (Moorfields Eye Hospital) are located on the 5 th Floor Lanesborough Wing on the Duke Elder Ward and theatres. The Trust is currently consulting with Moorfields to agree the service relocation elsewhere. Moorfields has expressed the intention to move as soon as possible. It is planned that the work to support their relocation will be managed by a separate business case and negotiations. No facility which can accommodate all of Moorfields requirements is available on site, and the construction of new facilities must be carried out in line with the Trust s overall site development strategy. The requirement for additional theatre capacity will therefore be met in the short to medium term by bringing forward an element of the wider strategic plans for the redevelopment of the Lanesborough Wing. This will involve relocating the staff restaurant facility from the first floor of Lanesborough, and creating six new theatres in the space generated, as an interim. Once the permanent Moorfields facility has been created, the theatres will be returned to the Trust, primarily for women's and children's surgery 16. It is anticipated that a final agreement will be reached in autumn of The Moorfields area will be required in late In the meantime, the Trust s theatres team is committed to accommodating any remaining non-ophthalmic sessions within the other theatres available on the site Winter pressures Senior Health patients moved to Dalby Ward on the 5 th Floor in January 2012 to accommodate the relocation of Neuro-rehabilitation from the Wolfson Centre in Wimbledon. The Trust s bed plan envisages the patient cohort currently treated on Dalby being subsumed into other nursing units in the site, based on reductions in length of stay. The Trust has now developed sufficient plans based on productivity measures and increased physical capacity to be assured that Dalby will be vacated as planned in the spring of Vacant possession of Moorfields and Dalby ward will provide 1,122 m² of decant and development space, which will support the project along with minimal enabling works. A new inpatient bay will provide eight temporary beds to ensure that no beds are lost during construction. Nineteen offices on the 5th floor corridor will be relocated prior to the start of building works. Two of these are occupied by Moorfields staff will form part of the agreement with Moorfields for relocation. The remaining offices will largely be relocated to Level 2 Lanesborough wing. 16 The timescale for developing the full business case for this scheme is January This will enable contracts to be exchanged for the works for the fifth floor, in the knowledge that the reprovision of theatres is entirely within the control of the Trust. 17 The winter pressures plan has been signed off by the Director of Strategy and the Chief Operating Officer. WT Partnership Health Consulting Page 65

66 4.11 Phasing The scheme will include four major phases of five to eight months duration. The floor grid allows the building work to be managed as four discreet elements, which will assist in keeping any disruption to service provision to a minimum 18. Works to the shared corridors will require careful programming and night time working in order maintain operational services throughout the programme. The redevelopment of the fifth floor is a stand-alone development and is not predicated on any other floors being changed. As such, the programme could in principle stop after this phase, with no significant knock-on effects in terms of commitments to further works. The engineering and plant upgrade will not necessitate the same treatment of the remaining floors, The transition will entail four phases: Current Phase 1 Phase 2 Phase 3 Phase 4 Final Dalby A decant refurb Nicholls & Ocean B, C 25 refurb Pinckney & Snow D, E refurb Frederick Hewitt F refurb Moorfields Area Offices/support G, H J Plan Location Beds available Principal use Phase 1 B, C, J (part) medical, shared areas Phase 2 D, E, F (part) oncology, infectious dis. Phase 3 F (rest), G, H, J (rest) neuroscience, adolescents Phase 4 A 4 18 surgery Total To maintain the minimum beds required during the construction period, Dalby Ward will be vacated and used for children's beds. During each phase, a minimum of 54 beds will stay open. The phasing is shown in plan below: 18 See Preferred Option Phasing Plan (appended) WT Partnership Health Consulting Page 66

67 GL Key Phase 1 - Phase 2 - Phase 3 Phase 4 - The scheme will take two years in total: Phase Start Finish Dalby available Jun-15 ongoing Phase 1 Jun-15 Nov-15 Phase 2 Dec-15 May-16 Phase 3 Jun-16 Nov-16 Phase 4 Dec-16 Jun Private patients and market share On the current trajectory, the lean work on reducing length of stay is likely to yield results which are better than originally expected. This will free up rooms which can be dedicated for private care, and will enable the unit to offer private patient admissions. In addition, increasing awareness of the potential for private patient income to support NHS activity has led to initiatives to increase private patient activity in the fields of allergy/anaphylaxis, respiratory and sleep studies, all of which have an inpatient aspect. The bidders for the main private patient wing development have also been asked to present proposals for a small private patients unit on Lanesborough Wing for women and children. WT Partnership Health Consulting Page 67

68 The clinical leads for children's medicine and surgery have been actively engaging with local GPs at meetings and open fora to raise awareness of the benefits the Trust can offer, such as an SMS advice line, increased ambulatory models of care. This has led to outpatient referrals from South Lambeth and North Wandsworth more than doubling. This initiative will be extended to other areas of catchment. WT Partnership Health Consulting Page 68

69 SECTION 5: COMMERCIAL CASE 5.1 Introduction The scheme is being procured and built under the NHS Procure 21+ framework, with Miller HPS (a subsidiary of Galliford Try plc) as the principle supply chain partner. Design was carried out by their contractor, Avanti Architects. Details of the process of appointment are shown below. 5.2 Procurement strategy The scheme is being be procured under the Procure 21+ (P21+) framework available to NHS organisations in England, which was initiated in July Procure 21+ is the Department of Health preferred method of procurement for new builds and refurbishments in the NHS. Procure 21+ and its predecessor Procure 21 have over 5bn worth of schemes registered. The Department of Health has stated that procure 21+ schemes are providing value for money solutions to over 200 NHS Trusts. The benefits of the process are that high quality pre-approved supply chains are available for NHS clients without having to go through EU OJEU tendering procedures. This saves an estimated 6 months in procurement time and significant consequential costs. In addition, clients and their supply chain work collaboratively to develop their scheme using common principles and tools that are proven to deliver quality schemes on time and within budget. P21+ was therefore chosen as the process has consistently delivered schemes to time and budget, and enabled risk sharing between clients and contractors. Risk is explicitly priced into the contracts, though there is no evidence to suggest that contractors are unduly pessimistic about risk, or seek to recover additional profit by overpricing risk. A nominated P21+ Implementation Advisor, Peter Ramrayker, was invited to St Georges to meet with the Director of Estates & Facilities, Neal Deans, the Deputy Director of Estates & Facilities, Hugh Gostling and Assistant Director Capital Projects, Sharon Welby in March 2012 to provide information about P21+ and its relevance to the trust schemes. Following this consultation the P21+ method of procurement was selected for the Children s Hospital Development and five other projects and reported to the Trust Capital Programme Group. In order to prepare for this the project team: the Assistant Director, Capital Projects and two Project Managers attended a range of P21+ training days covering briefing and the 21+ process. 5.3 Procurement process P21+ allows NHS organisations to appoint a principal supply chain partner (PSCP) to one or more schemes, and the Trust therefore took the opportunity to bundle a number of schemes in the same procurement package. This process is permissive, and does not commit the Trust to any or all of the elements. The schemes in the bundle included: Table 20: P21+ Procurement Bundle Project Initial Budget Planned Completion Current Status Rooftop helipad 4m May 2013 Complete WT Partnership Health Consulting Page 69

70 Project Initial Budget Planned Completion Current Status Children s Hospital Development 14m Jul 2015 In progress (this business case) Refurbishment of theatre suite 1 st Floor Lanesborough Wing 4m Aug 2015 In planning Dedicated lift to Children's Hospital Development Dedicated Children s Hospital Main Entrance 250k Apr 2014 Held 2m Jul 2015 In planning Ophthalmology (Moorfields) relocation 10m Oct 2013 In planning (Moorfields managing procurement) The dates for the children's hospital elements were originally planned as follows: Table 21: P21+ Appointment Timetable Milestones Planned Date Release High Level Information Pack to PCSP s 6 July 2012 EOI return 17 July 2012 Trust Open Day 25 July 2012 PCSP Interviews 2 August 2012 PCSP Appointment 3 August 2012 Contract Signature 31 August 2012 The following individuals formed the selection panel for this scheme: Table 22: P21+ Selection Panel Name Neal Deans Hugh Gostling Kevin Harbottle Bruce Okoye Andrew Richardson Ian Rhodes Sharon Welby Position (Former) Director of Estates and Facilities (Former) Deputy Director of Estates & Facilities Deputy Finance Director Paediatric Surgeon and Project Clinical Champion WT Partnership, Trust Cost Advisor WT Partnership, Trust Cost Advisor Assistant Director Capital Projects The key points in the appointment process were: The Scheme was registered on P21+ website in May WT Partnership Health Consulting Page 70

71 The Trust High Level Information Pack (HILP - appended) was sent out to the six Principal Supply Chain Partners (PSCP s) on 29th June Expressions of interest was received from five PSCP s. Using the P21+ selection criteria and weightings, three PSCPs were shortlisted and invited to the trust open day which took place on 25th July Three PSCP s were invited to interview which took place on 31st July Millers HPS were duly appointed by issue of the P21+ letter of appointment as the Principle Supply Chain Partners for the scheme on 2nd August Initially, formal letter of appointment were issued by the Trust to Millers for specific design work to a specified value. A Stage 3 contract was signed by both Millers HPS and the Trust to cover the work up to the production of a Guaranteed Maximum Price (GMP) and completion of the FBC. Miller HPS s supply chain includes: Table 23: Principle Supply Chain Role Building contractor Mechanical and electrical contractor Mechanical and electrical consultants Architects Structural engineers Organisation Miller Construction Relabond Hoare Lee Avanti Ramboll Cost advice is being provided on a joint appointment to both Trust and PSCP. Partnership has been appointed to fill this role. The PSCP and the Trust have been working together since OBC approval to develop and agree a Guaranteed Maximum Price (GMP) for the delivery of the scheme. This is made up of: Nationally agreed profit and overhead rates, Fees for professional advice such as design and cost management, Market tested packages for the works (three quotes for a minimum of 80% of total contract value). The whole GMP will be assessed for overall value for money by the cost consultants. This takes into account elements such as: Prevailing rates for works nationally and locally. Published cost indices. Knowledge of the cost of work in the hospital from other recent schemes. The risks not closed off in the risk register. Should the scheme not proceed, the Trust will own the design at point of termination, but will be liable to reimburse PSCP costs up to that point. The GMP is due to be delivered in December 2014 WT WT Partnership Health Consulting Page 71

72 5.4 Moorfields Moorfields Eye Hospital NHS Foundation Trust plans to operate from new, centralised and enlarged facilities on the St George s Hospital site, vacating the cramped and dispersed areas currently occupied. The Trust is currently working in collaboration with Moorfields senior management team to develop a permanent solution within the context of the emergent site Development Control Plan. In the interim, the Trust is planning to create six new theatres on Level 1 of Lanesborough, of which up to four may be used by Moorfields. Once a permanent solution is agreed and implemented, these theatres will be released back to the Trust for its own use as part of the Children's and Women's Hospital Development programme. The rental agreements for the use of the Trust s facilities will be based on the principle of recovering all relevant costs, including financing costs, from the tenant. 5.5 Statutory Consents Planning permission The potential change to cladding and facias may require planning consent. Discussions have been held the local planning authority to initiate the process. Avanti Architects submitted a Pre Application Planning Report and Site Plan to Wandsworth Council in September 2012 (appended) outlining the proposed works relevant to the planning authorities: Replacement of existing windows New bed lift New bay windows New plant on the roof New plant screening New flues to serve isolation facilities Refurbishment of the entrance to the Lanesborough Wing (if required) New ground level extension to accommodate Moorfields Outpatient Department (as necessary) It also covered: Access Sustainability Wandsworth Council replied in October 2013 confirming they will support the proposed scheme 19, which is generally compliant with the local authority s planning policy objectives. In June 2014 they granted full planning submission for the revised scheme. 19 See Pre-Application Report Response from Wandsworth Planning Authority October 2012 (Appended) WT Partnership Health Consulting Page 72

73 5.5.2 Building Control and Firecode Full building control approval will be sought to current standards. followed in the development of the scheme. Firecode has been WT Partnership Health Consulting Page 73

74 SECTION 6: FINANCIAL CASE 6.1 Sources of capital funding and cash flow The capital funding for this investment will come from three main sources: Loan finance ( 15.2m) via the National Loan Fund. Backlog maintenance funding ( 6.1m) a significant proportion of the scheme consists of eradicating the maintenance backlog that has built up in recent years. Donated capital ( 2m) the hospital charity trustees have agreed to launch and fund a fundraising appeal towards the cost of the scheme 20. Some 550,000 has already been expended from Trust cash reserves. The timing of capital expenditure is tabulated below: Table 24: Capital cash flow forecast Shown graphically below, the forecast shows that the peak demand on trust capital will be 2015/16 and 2016/17. The majority of charitable funds will be required in the latter part of the programme, giving a longer lead-in time for fundraising activities. Figure 14: Capital cash flow forecast 20 See letter of support from Charitable Trustees September 2013 (appended) WT Partnership Health Consulting Page 74

75 This will enable the costs of any borrowing to be calculated at the likely prevailing rate of interest and repayment terms for the Full Business Case. 6.2 Borrowing The borrowing requirement has been estimated at This will be sourced from the Foundation Trust Finance Facility. At the prevailing rate of 2.5% (plus 0.5% buffer for potential rises before the loan application is processed) this entails a composite average charge of some 875,000 per annum. Interest + principal Annual Quarterly Principal 15,197 15,197 Interest 3.00% 0.74% Periods Payment The costs will actually be based on a fixed repayment of principal, with a declining interest charge. Repayments of principal will only start once all the capital has been drawn down. This produces the following cost profile, which peaks in 2018/19: Element 2014/ / / / / /20 Repayments (453) (604) (604) Interest 0 (167) (360) (444) (426) (408) Combined 0 (167) (360) (897) (1,030) (1,012) This leaves the scheme in financial surplus after 2 years. 6.3 Charitable Funding The Trust has been working with St Georges Hospital Charity since 2010 considering options and potentials for fund raising. The latter is represented on the Children s Hospital Project Board and the Steering Group. A letter of support from the St George s Charity has been received and its commitment to the scheme is underlined by their appointment of a full-time fund raising coordinator and two assistants. St George s Charity Trustees have made a considerable commitment to raising funds for this and related projects, and have set a target of 10m, plus 2m to establish a chair for the university. The Director of Fundraising has RAG rated the content of the scheme to assess the fundraising potential Fundraising potential The content of the 5th Floor was assessed against what is genuinely additional, non-core NHS funding which the charity can safely and confidently present to prospective donors as completely fulfilling the charitable purpose ( supplementing and not substituting for government funding of the core services of the NHS ). This constitutes the green items. The amber category exists where the interpretation of our charitable purpose can be extended to consider first-time elements of the 5th Floor that are probably new and which can be regarded as additional to what existed previously again fulfilling on the charitable purpose. Broadly the justification for appealing for such items is: Some equipment, rooms or spaces may exist in similar fashion elsewhere in the NHS but may be new to St George s WT Partnership Health Consulting Page 75

76 These may themselves be the result of charitable funding elsewhere and have become extremely valuable to specific types of NHS function (in this case a C&W Hospital) They may become adopted as a model of care/provision in individual institution but is not yet the NHS norm They may be funded as a result of a new building that was not in place before and which extra amenities could have been quite different (and not so ambitious) This is interpretation pays due regard to the charitable purpose as defined by the articles of association and founding documents. The assessment process included discussions with clinical and other staff to ascertain the norm for NHS provision and hence the potential for charitable funding. The red section includes everything that would be routinely provided by the NHS. The total in each category within the scheme has been assessed at: 1. Green - 2m with a firm expectation of raising funds 2. Amber - 3.5m, of which an unknown quantity may be realisable 3. Red - the remainder This gives a realistic contribution to the scheme of 2m Fundraising Approach A capital appeal works effectively in two phases. First, a private phase lasting from 2013 to late 2016 during which time a senior volunteer Appeal Chair is recruited who in turn recruit a well-connected and influential group of Appeal Board members and Patrons. The Patrons of the appeal are Lord, and Lady Grade. The objectives of the Chair and Appeal Board is to influence and solicit very high level gifts from their own personal and business networks to secure around 60% of the overall appeal fundraising target ( 6m). The capital appeal team will be active in working to interest private charitable trusts and foundations and major donors in supporting the initiative. During the private phase which lasts from 2014 to late 2016, preparations will be made for a public appeal which will last from late 2016 until late 2017 during which time the public, schools, associations, societies, businesses and the media are asked to help finish the appeal by raising the final 4m of a 12m campaign. This approach is a tried and tested method in the charitable sector and the recruitment of a dedicated team of capital appeal specialists is vital to the execution of a successful campaign. A capital appeal needs to demonstrate a number of essential elements, especially during the private phase when potential funders often seek a detailed level of clarity to ensure their own giving criteria are matched. The first of these is to reassure donors that an appeal is exactly that a call for funds that do not exist from within the organisation s current resources. St George s Hospital Charity (SGHC) does not have 10m of funds to disburse for a single project, hence the appeal. Second, a clear and compelling case for support has been composed to justify and explain what the development will achieve that is transformational, first in the UK, or first in the hospital. Such measures as increased impact are also essential to illustrate why the appeal for funds is merited. WT Partnership Health Consulting Page 76

77 Third, there needs to be a clear demonstration that the charity is appealing for funds over and above those that the NHS would provide for core services. This requires the charity concerned to demonstrate that what it is asking for would not be achievable without their involvement and the support of donors. The charity is also bound by its own raison d etre to patients and staff at the trust by supplementing and not substituting for government funding of the core services of the NHS. The overall targets for the appeal are tabulated below: Category Size of Gift Prospects Needed Number Of Gifts Total Pacesetting Gifts 2,000, ,000,000 1,000, ,000,000 Leadership Gifts 500, ,000, , ,750, , ,200,000 50, ,000 Major Gifts 25, ,000 15, ,000 10, ,000 All Other Gifts 1,000,000 Total ,000,000 This spread shows the huge impact of individual high net worth donors to the process. The timescale for the appeal phasing is set out below: FUNDRAISING APPEAL STAGES 1. General Preparation Phase 2. Research and Approach Campaign Chair 3. Identify and secure lead gifts (May) 4. Private Appeal Launch X (October) 5. Private Appeal 6. Public Appeal Preparation 7. Public Appeal Launch X (October) 8. Public Appeal 9. Public Appeal Completed/on-going Fundraising X This shows that the private phase, which will generate the majority of funds, will start in autumn 2014 and be complete by the summer of At that point the public phase will start, lasting to the end of Risks to the Appeal As with any major project a risk log exists and focuses on the key elements: Case for Support WT Partnership Health Consulting Page 77

78 Recruitment of a first class volunteer Appeal Chair and Board The additionality test Build project timelines to inform activity Financial transparency and access to granular detail The management of relationships with other charities which support the hospital Staff recruitment and retention Cash flow Branding and the management of the public appeal phase These are familiar risks to an experienced Capital Appeal team Appeal Governance A solid meeting frequency has been established, working to the following model for the project. The governance framework is set out in graphical form below: Joint Charity Steering Group Children s and Women s Hospital Project Board Children s and Women s Hospital Steering Group Scoping & Delivery Children s Fifth Floor Steering Group Scoping & Delivery Fundraising & marketing Donors, Marketing, PR, Branding, Communications The Joint Charity Steering Group includes the Chair, Chief Executive, Director of Corporate Affairs of the trust; the clinical leads for children s and women s projects within the trust; the Principal of St George s University London; the Chair and Vice Chair of Trustees, and Chief Executive and Director of Fundraising of the charity. The group meets every 4-6 weeks and the trust is the secretariat to the group. The charity has committed to launching its first major campaign in living memory and employed the services of a specialist fundraising consultancy, Marion Allford Associates, to guide and shape a feasibility study and outline strategy for the appeal. The consultancy also assisted the charity in finding an experienced director of fundraising who in turn is recruiting a specialist team. The charity has committed around 1m to the costs of running an appeal so that every raised reaches the appeal. The current team are:- WT Partnership Health Consulting Page 78

79 Director of Fundraising Noel Cramer. Previously Director of Capital Appeals at Marie Curie Cancer Care, Noel completed a 10m capital appeal for a new West Midlands Hospice prior to joining St George s. Previous roles included 12 years as a Head of Regional Fundraising for Cancer Research UK in Scotland, Northern Ireland and the North of England as well as London and the South. Previously Noel worked for the Queen Elizabeth and Selly Oak Hospital Charity in Birmingham. With 17 years experience in the fundraising sector allied to 16 years in the commercial world his perspectives are commercial with strong project and people management experience. Overall Noel has directly managed capital appeals in Jersey for a cancer centre in Southampton, a bowel cancer laboratory appeal in Bristol alongside Bristol University, and a home for the brave capital; project at the Queen Elizabeth Hospital for the families of wounded military personnel. A Welsh Appeal for a Cancer Trials Network, and oversight of a Glasgow Formulation Unit at Strathclyde University were projects Noel oversaw the delivery of through capital appeal teams. Major Gifts Manager - Liz Brewer. An experienced capital fundraiser through a hugely successful Tate Britain and Tate St Ives dual fundraising initiative, Liz is a specialist in the management of high value individuals and comes to the charity with strong sales, marketing and individual high value donor experience. Previously at RADA her skills cover face to face skills with significant donors, world renowned actors and private trusts and foundations. Community Fundraiser and Project Executive Maribel Bennett. Maribel has been employed within the hospital charity for 3 years and provides an in depth knowledge of local community groups, schools, businesses and individuals who have supported the charity previously. As an experienced project manager her skills ensure that the complex interactions within the team and the trust are delivered efficiently and smoothly. Trusts and Major Gifts Executive Rachel Waterworth. Rachel joined the team in April 2014 following 3 successful years at the British Heart Foundation where her systems, operations and fundraising skills were developed in the Trusts and Major Gifts team. The charity is also recruiting for: Trusts and Foundations Manager Corporate Manager WT Partnership Health Consulting Page 79

80 6.4 Affordability Children's services currently make a positive contribution to the Trust s finances. The key issues in the scheme affecting cost positively and negatively are: Table 25: Factors influencing affordability Positive Increased contribution from private patients Increased contribution from more locally treated patients (repatriation) Increased contribution from increases in baseline elective activity Increased trauma activity associated with the Helipad Increased energy efficiency Additional contribution from adult cases in adult beds no longer used for children Increased contribution from baseline activity Negative Increased ward staffing costs Increased marginal costs associated with admissions Increased capital charges Loss of rental income Net additional energy, maintenance and cleaning costs Income & expenditure The marginal income and expenditure impact of the options has been estimated, using the growth assumptions for the sector, consistent with the Long Term Financial Model (LTFM). The key cost assumptions are: Baseline elective activity will rise in line with sector assumptions, 1.8% per annum,, or approximately 110 cases, for five years. CCGs will pay full tariff for additional elective activity. Split 1/3 rd medical (including oncology) and 2/3 rds surgical this represents additional income of over 350,000 in each year 21. Similarly, the new facilities with single rooms and en-suite sanitation would be attractive to commissioners referring to central London hospitals. Rerouting these referrals locally to St George s would be better for patients and reduce commissioner costs (through a 5% lower market forces factor MFF on the tariff). An increase in market share of 3% per annum, or 180 cases for five years is expected. Again, CCGs will pay full tariff for additional elective activity. Split 1/3 rd medical (including oncology) and 2/3 rds surgical this represents additional income of over 580,000 in each year 22. Taken together, these two elements represent year-on-year growth of just under 5%, which is in line with the average actual growth in the last five years. 21 Based on based on c. 110 additional admissions per annum using 1.8% growth factor for sector. 2/3 rds 3,834, 1/3 rd 1,996 for 5 years = 550 cases total. Annual additional income estimated at 354, Based on 3% actual growth in electives from other providers (180 pa). This is derived from the 5% actual growth in elective admissions in recent years, less the 1.8% growth assumption for baseline growth. 2/3 rds 2,850, 1/3 rd 1,180 for 5 years = 900 total. Annual additional income estimated at 580,000 WT Partnership Health Consulting Page 80

81 For every elective admission, one outpatient attendance has been assumed. This generates some 217,000 in income, with 75,000 of contribution once operating costs are taken into account 23. The do minimum option would not have been able to meet the additional demand after 2014/15. Nursing and other staffing costs are expected to rise in line with increases in beds, by 16.5 WTE nursing staff, 1 WTE physiotherapist, 0.5WTE occupational therapist and 0.5WTE dietician, at a cost of 840, Ward non-pay is estimated at 55,000 per bed per annum. Other operational costs (e.g. theatres, pharmacy have been estimated at 40% of income for medical and 50% for surgical admissions, giving a total of 2.7m in the first full year of operation. This will be offset by greater productivity in medical staffing, as no additional medical staff will be required this generates a countervailing benefit of 522,000. The reduction in emergency admissions generated by the introduction of the PAU is expected to stabilise emergency admissions at their current level. The higher case-mix generated in inpatient admissions may lead to a higher tariff, although this is not modelled at this stage. Additional trauma referrals from outside the main catchment would also be attracted by the new facility via the helipad. These have been modelled at full tariff, as they will not be subject to the cap on ordinary emergency admissions 25. The children's service will occupy twice the footprint on the fifth floor, and will therefore increase its occupancy costs in proportion. This is generated by approximately 1,000m 2 of additional space being serviced 26, costing 182,000, at: o 75/m 2 for domestic services. o 51/m 2 for energy (NB this will reduce in line with energy efficiency assumptions). o 55/m2 for engineering and maintenance. In addition, the rental charge to Moorfields nominally covering capital charges ( 175,000) and rates ( 19,000) would be lost to the area. 23 Based on 150/attendance, with marginal cost of 60% for surgical and 77% for medical attendances 24 Based on 4.5 WTE for four beds x 3 (11 beds in all) + absences = 16.5 $45,000, plus 100,000 for AHP grades 25 Based on 2,969 average contribution from paediatric trauma cases, x 150 admissions once the unit is fully operational. As a new service and part of the newly designated Major Trauma Centre, there is confidence that the full tariff will apply, although there is a low risk that a reduced tariff under NETA may apply for some admissions if the threshold is not adjusted. The Trauma & Orthopaedics Directorate is considering appointing dedicated children's trauma medical staff to establish as separate rota for these patients. 26 The Moorfields element represents one quarter of the floor area. The Dalby ward area is already serviced as this will not be replaced by new accommodation, there will be no increase in cost to the Trust for this element) WT Partnership Health Consulting Page 81

82 An assessment of the market for private patients was carried out by external advisers, which concluded that the market in South West London was far from saturated. The under-3 market in particular suffers from there being no capacity south of the River Thames. New facilities with single rooms and en-suite sanitation would be attractive to private patients. Contribution from this source was expected to rise from 50,000 to 159,000 per annum. This would not be feasible in the do minimum option All built assets would be depreciated over 25 years in a straight line, regardless of the source of capital. Similarly, equipment would be depreciated over 10 years. Loan finance has been estimated at 3%. Potential operating cost pressures such as a move to revised RCN nursing level standards, establishment of a CEPOD operating list, and any development in medical staffing numbers will be funded separately. The revised summary income and expenditure estimates for the scheme and the do minimum comparator are set out below: Table 26: Options revenue cost summary 2014/ / / / / /20 Option 1: Do minimum Income Option 1: Do minimum Expenditure 0 (451) (576) (630) (618) (612) Total 0 (451) (576) (630) (618) (612) Option 2: Scheme as it now stands Income 0 0 (81) 5,539 8,068 8,101 Option 2: Scheme as it now stands Expenditure 0 (167) (850) (5,775) (7,147) (7,066) Total 0 (167) (931) (236) 921 1, Based on 2012 Briefing Report on adult and children's private patients in the sector. Current annual children's PP income is approximately 175,000 with no PP facilities. The commercial team have reviewed the adult consultants who operate on children and there could be an additional 465k per year income with a profit of 109k if these consultants brought some PP work to SGH. This would take account of the need for a dedicated PP room plus associated hotel facilities and a dedicated PP co-ordinator to manage activity and ensure the space is available. The commercial team expect that there would be a ramp of up 50% in year 1 and then 80% from year 2 and 100% in year 3 with a growth of 5-10% in the following years. In addition, there may be scope for attracting overseas patients in addition to the local private patients. 28 See also letter from Paediatric Surgeons supporting private patients assumptions (appended) WT Partnership Health Consulting Page 82

83 This shows that the scheme is likely to break even in the second year of coming on stream. The do minimum does not break even. The detailed assumptions for the scheme are tabulated below: Table 27: Preferred option financial summary Option 2: Scheme as it now stands 2014/ / / / / /20 Income Baseline admissions growth - income ,063 1,772 1,772 Market share admissions growth - income ,740 2,899 2,899 Trauma/oncology admissions growth - income ,686 1,686 1,686 Private patients admissions growth - income Additional admissions to PICU / NNU cots - income ,479 1,479 Additional admissions to adult beds - contribution Rental income (lost) 0 0 (81) (194) (194) (194) Additional outpatients - income Total 0 0 (81) 5,539 8,068 8,101 Expenditure Ward staff cost increases Marginal cost of additional elective activity ,759 2,932 2,932 Marginal cost of additional trauma activity ,240 1,240 1,240 Medical productivity (313) (522) (522) Marginal cost of additional outpatient activity Net changes to energy, cleaning, maintenance costs Marginal cost of PICU activity Depreciation Cost of capital Total ,775 7,147 7,066 Surplus (Deficit) 0 (167) (931) (236) 921 1,035 A letter of support from the paediatric surgeons in the hospital regarding private patients income has been received. 6.5 Sensitivity analysis The sensitivity of the case to a number of factors has been tested: Capital costs could increase before the GMP is agreed. An additional 1m on capital expenditure would cost 90,000 per annum in capital charges. However, the likelihood of this is low, as considerable design work has already been undertaken and costed, and the GMP caps the majority of the scheme costs with a contractual guarantee. Revenue contribution could be less than anticipated. modelled: o o o 10% less growth in elective admissions than anticipated 20% less growth in elective admissions than anticipated 30% less growth in elective admissions than anticipated The impact of this is tabulated below: Three scenarios have been WT Partnership Health Consulting Page 83

84 Scenario 2014/ / / / / /20 Base case 0 (167) (931) (236) 921 1,035 10% reduction in elective admissions 0 (167) (931) (384) % reduction in elective admissions 0 (167) (931) (532) % reduction in elective admissions 0 (167) (931) (680) (260) (147) It would require 30% less growth in elective admissions to turn the surplus position into a deficit. As the growth figures have been based on actual increases over the last four years, this is considered a relatively low risk. WT Partnership Health Consulting Page 84

85 SECTION 7: MANAGEMENT CASE 7.1 Project management The Trust Board is responsible for the overall success of the project, with the Project Team retaining day to day responsibility for the project. Details of the key roles and responsibilities are set out in the table below: Table 28: Project roles Project SRO Project Sponsor Project Director Project Manager Clinical Lead Project Accountant Project Administrator Role Miles Scott Peter Jenkinson Eric Munro Sharon Welby Bruce Okoye Kevin Harbottle Jenny Francis Name The Senior Responsible Owner is Miles Scott, Chief Executive, St George s Healthcare NHS Trust. His role is to: Maintain visible and sustainable commitment to the programme. Resolve issues that fall outside the Project Sponsor s delegated authority. The Project Sponsor is Peter Jenkinson, Divisional Director of Operations. His role is to Ensure that the project progresses to deliver the objectives set out, which are in line with the Transforming St George s Programme and the Trust s Clinical Services Strategy. Ensure support from partner agencies to deliver their aspects of the change required to realise the vision set out in the overall Trust strategy. Ensure that a viable and affordable Outline Business Case is produced to support the delivery of the Clinical Services Strategy. Ensure commitment by all members of the board through to the completion of the construction phase. Maintain visible and sustained commitment to the programme. Resolve issues that fall outside the Project Director s delegated authority. The Project Director is Eric Munro Director of Estates and Facilities. His role is to: Take the lead responsibility for risk relating to the project and for the realisation of associated benefits balancing the acceptable level of risk against objectives and business opportunities. Agree and direct the activity of the project. Ensure the brief set by the Project Board is adhered to. WT Partnership Health Consulting Page 85

86 Provide the key contact in respect of high level decisions required in order to progress work. Take overall responsibility for budget. Provide overall leadership of the project through implementation and into operational use. Provide a focal point for external interest in the project. Manage and control change within the project. The Clinician Lead is Bruce Okoye, Consultant Paediatric Surgeon. His role is to: Take the lead responsibility for the clinical aspects of the scheme. Ensure the clinical objectives are defined and met. Ensure that the project enables the delivery of the clinical services strategy. Provide the strategic context for the project. Oversee the development of the clinical service model, clinical design brief, and ensure final design solution meets clinical requirements. Ensure internal stakeholders are kept informed on progress including all clinicians i.e. doctors, nurses, AHPs as well as managers. Ensure the external stakeholder support is provided and is sufficient for the purposes of the business case. Keep the wider clinical community informed and engaged as necessary, including NHS London, key PCTs, local Practice Based Commissioning Groups, relevant Managed Clinical Networks and other providers as appropriate The Project Manager is Sharon Welby. Her role is to: Take the lead responsibility for the achievement of the project objectives. Agree and direct the activity of the project. Provide the key contact in respect to decisions required in order to progress the work. Provide the key link with the major stakeholders. Provide a key link between the Transformation Programme and the Project Implementation structure. Be responsible for advising the Project Director and the Project Team of any matters that may affect the programme in sufficient time that action can be taken to mitigate the risk. Take responsibility for risk tracking and mitigation. Monitor progress against the initial project programme and ensure that key milestones/achievements are met. Ensure there is a clear audit trail of all works carried out and assumptions used. Ensure that the leads for the work streams (clinical and non-clinical) operate in line with robust project management principles, such as: o o Develop detailed project plans. Identify key milestones and benefits. WT Partnership Health Consulting Page 86

87 o o Report progress via Lead at Project Board meetings. Identify problematic issues and implement agreed actions to mitigate these. 7.2 Governance Structure Key decisions and direction will be provided through the Children s Hospital Board which will be chaired by Neal Deans, Director of Estates and Facilities, acting as the project board. The project board will supervise a number of work streams. Figure 15: Project governance structure Children s & Women s Hospital Development Project Board Chair Peter Jenkinson, Director of Corporate Affairs Children s Inpatients Steering Group Chair Mr Bruce Okoye, Consultant Paediatric Surgeon Business Case Design Team Clinical Team Charity Fundraising Equipment Communication Sharon Welby Sharon Welby Jonathon Round Noel Cramer Ruth Meadows Louise Halfpenny The main work streams are Business case Design team Clinical team Charity fundraising Equipment Communications The Women's and Children s Hospital Development Board has been established to act as project board to deliver a children s hospital development through to construction phase. The Project Board will ensure that the objectives of the Children s Hospital development are met and will ensure that key deadlines are met and the development adheres to wider requirements. The project board is chaired by Peter Jenkinson, Director of Corporate Affairs. WT Partnership Health Consulting Page 87

88 The overall function of the project board will be to oversee and facilitate the production of the outline and full business case, design and construction of the Children s Hospital Development and the following projects relating to both women's and children's services. The following work streams have been established to ensure that clinical requirements will be delivered: Business Case Design Team Clinical Pathway Team Charity Fundraising Equipment Communications The membership of the Project Board is: Table 29: Project Board Name Sofia Colas Richard Chavasse Eric Munro Kevin Harbottle Gavin James Peter Jenkinson Teresa Manders Feilim Murphy Bruce Okoye Justin Richards Sam Ridge Jonathan Round Sharon Welby Role Divisional Director of Operations Paediatric Consultant Physician and Care Group Lead Director of Estates and Facilities Deputy Director of Finance General Manager Director of Corporate Affairs (Project Sponsor) Divisional Director of Nursing and Governance Paediatric Consultant Surgeon and Care Group Lead Clinical Lead Paediatric Consultant Neonatologist and Care Group Lead Head of Communications Paediatric Consultant and Clinical Director Assistant Director of Capital Projects 7.3 Project plan The key milestones in the project plan are set out below: Table 30: Milestones Milestone Set Up CHD Project Board November 2011 Date Develop Outline Business Case June 2012 February 2013 Appointment of Principal Supply Chain Contractor August 2012 Outline Business case submitted to Trust Board March 2013 Outline Business case submitted to NHS Trust Development Authority March 2013 WT Partnership Health Consulting Page 88

89 Milestone Date NTDA approval of OBC October 2013 Decision / Agreement with Moorfields relocation June 2014 Full Business case submitted to Trust Board November 2014 Vacate Dalby Ward May 2015 Construction Start Date June 2015 Vacate Duke Elder and Ophthalmology Theatres (Moorfields) June 2016 Completion Date June 2017 The scheme will be managed using industry standard tools and techniques, including a Gantt chart to plan the phases and monitor progress (example below): Figure 16: Gantt Chart WT Partnership Health Consulting Page 89