Abridged Outline Business Case

Meeting: NoSPG Date: 30th November 2011 Item: 70/11 (iii) b NORTH OF SCOTLAND PLANNING GROUP Establishing a North of Scotland Specialist Network for Young People with Severe and Complex Mental Health Problems Abridged Outline Business Case Document Control Information Control Status Date Last Printed Unapproved Version Number Version 1 Author Dr Sally Bonnar, John Fyfe, Louise Lyall, Neil Strachan

Table of Contents 1. STRATEGIC CASE... 3 1.1 Strategic Context... 3 1.2 Business Strategy & Aims... 6 1.3 Other Organisational Strategies... 7 1.4 Investment Objectives... 7 1.5 Existing Arrangements... 8 1.6 Business Needs Current & Future... 8 1.7 Desired Scope & Service Requirements... 11 1.8 Benefits Criteria... 11 2. THE ECONOMIC CASE... 12 2.1 Main Business Options... 12 2.2 Benefits Appraisal... 12 3. THE COMMERCIAL CASE... 15 4. THE FINANCIAL CASE... 16 5. THE MANAGEMENT CASE... 19 5.1 Potential Implementation Timescales... 19 5.2 Project Management... 19 5.3 Project Risks... 20 5.3 Benefits Realisation... 20 5.2 Project Evaluation... 21 2

1. Strategic Case 1.1 Strategic Context This Outline Business Case (OBC) is submitted on behalf of the 6 Health Boards of the North of Scotland Planning Group region: NHS Grampian, NHS Highland, NHS Orkney, NHS Shetland, NHS Tayside and NHS Western Isles. The key objective of this OBC is to develop and deliver a Regional Specialist Network for Adolescents (age 12-18) with severe and complex mental health needs. This Network will comprise local, community, regional and inpatient services and will be underpinned by an Obligate Network and supported by an Integrated Care Pathway (ICP). The 6 Health Boards will work in partnership with 10 Local Authorities (Aberdeen City Council, Aberdeenshire Council, Angus Council, Dundee City Council, Highland Council, Moray Council, Orkney Islands Council, Perth & Kinross City Council, Shetland Islands Council and Western Isles Council); other mental health services; the voluntary sector and stakeholder groups, particularly patients, families and carers. 1.1.1 Policy Context Existing Scottish Government policy 1 in relation to the provision of Child and Adolescents Mental Health Services (CAMHS) recommends the development of clear pathways for CAMHS patients, the development of intensive local services with regional planning and commissioning of specialist inpatient beds. CAMHS for young people need to be developed to meet the aspirations of the NHS Quality Strategy 2 and ensure patient safety, better outcomes, and person centred care. In addition, The Mental Health (Care and Treatment) (Scotland) Act 2003 requires that the welfare of a child treated under the Act be of paramount importance. To ensure this is achievable, age appropriate specialist services and accommodation should be provided locally and regionally. The current practice of admission of young people to adult inpatient facilities and any limitations in the quality of care they receive is under constant review, and is monitored by the Mental Welfare Commission. This area of care provision is also of concern to Children s Commissioners. Rights, Relationships and Recovery 3 promoted a recovery focussed model in the treatment of mental illness. All mental health services are expected to comply with this model. The aim is not just the relief of symptoms, but a holistic, whole life approach to the treatment of mental illness which includes education, employment, relationships, leisure and social activity and physical health, amongst others. This approach extends to all services including Tier 4 adolescent services described here which are expected to promote recovery, wellbeing and social integration. Delivering for Health 4 included a commitment to develop at least 56 inpatient places for adolescents and to develop a National Mental Health Delivery Plan for Scotland. This Delivery Plan was published at the beginning of December 2006, and indicates a commitment to reducing the number of admissions of children and young people to adult beds by 50% by 2009. Progress towards these targets is closely monitored by the Mental Welfare Commission. 1 (2005) The Mental Health of Children and Young People: A Framework for Promotion, Prevention and Care Oct 2005, Scottish Executive, Edinburgh. Astron B43221 10/05 2 http://www.scotland.gov.uk/resource/doc/311667/0098354.pdf 3 (2006) Rights, Relationships and Recovery: The Report of the National Review of Mental Health Nursing in Scotland April 2006, Scottish Executive, Edinburgh. Astron B45248 4 (2005) Delivering for Health Nov 2005, Scottish Executive, Edinburgh, Astron B44021 11/05 3

In October 2004, the Inpatient Working Group of the Child Health Support Group published a report 5 recommending a phased expansion of the psychiatric inpatient provision for children and young people in Scotland to 60 places, including 16 places for the North. These commitments were confirmed within Better Health, Better Care 6, published by the Scottish Government in December 2007. Consistent with national policy, and in keeping with the Health Reform (Scotland) Act 2004 7 and HDL 46 (2004) 8 which outlined expectations about regional collaboration, a regional approach to Tier 4 services for young people with severe and complex disorders has been progressed for the North of Scotland. In April 2007, the North of Scotland Planning Group (NoSPG) approved the establishment of an interim Project Board to develop an Initial Agreement (IA) outlining the longer-term requirements for expansion of the Tier 4 service provision (in patient and community based) for young people (12 18 years) with severe and complex mental health disorders, within the context of a regional network for CAMHS. Following the establishment of the Project Board, a Service Modelling and Workforce Planning Group (SMWPG) was set up. The SMWPG drove the work of compiling the IA, which identified the need to increase inpatient beds for the North of Scotland in the context of a wider specialist network, and each of the 6 Boards approved the IA on the basis that the increased bed provision would be located in Tayside. The IA was submitted to and approved by all North of Scotland (NoS) Boards as well as the Scottish Government Capital Investment Group (CIG) in July 2009. This mandated the project groups to continue to OBC stage. Subsequently, a needs assessment was requested by NoS Chief Executives and was commissioned from the North of Scotland Public Health Network (NoSPHN). This supported the regional and network approach by highlighting the need for a Mixed Economy of local, community based, regional and inpatient services. It recognised that all Boards will at some time have to treat and support young people with Tier 4 levels of need. The work of the SMWPG, fully supported by the Needs Assessment, indicated that the preferred model of delivery of care should be an Obligate Network of Tier 4 services around the 6 North of Scotland Boards. Obligate Networks (ON) were conceptualised and introduced in Delivering for Remote and Rural Healthcare 9. The development of these networks was identified as key to ensuring access to specialist services that might not be available locally and to sustaining the delivery of healthcare in remote and rural communities. Guidance has been issued to NHS Boards providing a framework for the establishment of ON's and within that, both child health and mental health are identified as areas in which an ON approach will be key to sustaining services. This proposed network will include local Tier 4 services delivered from within CAMH Community Services at Board level, supported by a small team of liaison workers employed by the network to work with patients and families during transition into and out of Tier 4 services, to provide consultation, training, peer support, and supervision. The ON will include a purpose-built regional 12 place inpatient Adolescent Unit. The original Government proposal for 16 inpatient beds has been reduced on the assumption that 12 beds, supported by local Board investment and an Obligate Network, will be sufficient. The Scottish Government has accepted that a robust network and the development of robust CAMHS within each Health 5 (2004) Psychiatric Services for Children and Young People in Scotland: A Way Forward December 2004, Scottish Executive, Edinburgh. Astron B38274/153 01-05 6 (2007) Better Health, Better Care December 2007, Scottish Government, Edinburgh. RR Donnelly B539881 12/07 7 Section 5 of the National Health Service Reform (Scotland) Act 2004 introduced a new duty of cooperation http://www.legislation.gov.uk/asp/2004/7/notes/division/1/3/1/5 8 HDL 46 (2004). Regional Planning. Scottish Executive. 9 (2008) Delivering for Remote and Rural Healthcare May 2008, Scottish Government, Edinburgh. RR Donnelly B56045 05/08 4

Board will deliver an appropriate model of care that better addresses the needs of those living in remote and rural areas. The IA for this Project was approved on this basis. One of the key measures for success is that all involved Health Boards will have to ensure both the development of local access to appropriate Tier 4 provision, or appropriate access through the network, and robust regional commissioning arrangements for the dedicated regional adolescent inpatient provision. CAMHS for young people need to be developed to meet the aspirations of the NHS Quality Strategy and ensure patient safety, better outcomes, and person centred care. Over many years it has been recognised that CAMHS across Scotland, including in the North of Scotland Region are below capacity; in places very significantly so. Recent investment from Government, matched by Health Boards has however begun to address the need at Tier 4. In 2009, recurring funding was made available to all Scottish Boards with the requirement that it be matched locally, for the development of services at Tiers 3 & 4. 10 Getting it Right for Every Child (GIRFEC) 11 places a responsibility on all partner agencies to promote child centred care and to work together to ensure that children in need receive appropriate and timely care from all necessary services. Local Authorities share a responsibility for those with Mental Disorders. To that end Local Authority representatives have been part of the planning for this project, particularly Education and Social work colleagues. 1.1.1.1 Local Authority responsibility for Children and Young People The Children (Scotland) Act 1995 places a responsibility on local authorities to safeguard and promote the welfare of children in their area who are 'in need' by providing a range and level of services appropriate to the children's needs. Children and young people who have a mental disorder (within the meaning of current legislation) are a specific group of children in need identified within the Act. Each child affected by mental ill-health who receives a Tier 4 CAMHS has a right to relevant authority services and has a right for their needs to be assessed. 1.1.1.2 Integration of Services Each young person who receives an intensive Tier 4 service will be discharged to local services delivered in partnership by health, local authority and voluntary sector agencies. The young person has a right to a co-ordinated and integrated approach to the delivery of support in their local community. Each NoS Board will continue to develop and maintain an integrated working relationship within their local authority partners and identified relevant responsible professionals. Each local authority will identify a named person for liaison purposes. In any Child Protection matters related to inpatients, the Tier 4 social work, health and education team will have specific liaison responsibilities with Dundee City authorities as the local authority where the Young Person's Unit is located. 10 2m recurring funding for tier 3/4 CAMHS was confirmed in a letter from Mr Huggins, dated 21 st January 2009. This money was required to be matched by Boards and a NoS regional bid was prepared and approved in response. 11 http://www.scotland.gov.uk/topics/people/young-people/gettingitright 5

1.2 Business Strategy & Aims 1.1.2 HEAT Targets The development of a Regional Tier 4 Specialist Network and Young People s Unit for Adolescents with Severe and Complex Mental Health Disorders is instrumental in meeting the following HEAT targets: Deliver faster access to mental health services by delivering 26 weeks referral to treatment for specialist CAMHS from March 2013 and 18 weeks referral to treatment for Psychological Therapies from December 2014 Reduce suicide rate between 2002 and 2013 by 20% NHS Scotland to reduce energy-based carbon emissions and to continue a reduction in energy consumption to contribute to the greenhouse gas emissions reduction targets set in the Climate Change (Scotland) Act 2009. The project will also support delivery of the Scottish Governments 5 Strategic Objectives 12 and the 15 National Outcomes and supporting indicators. 1.2.2 Involving, Engaging & Consulting The Project Board recognises the importance of the views of service users and carers as well as service professionals in establishing the network model. The desire to engage in productive communication and engagement has been uppermost in the preparation of the OBC, to ensure that plans have been appropriately influenced by key stakeholders. In 2007, an early yet highly relevant planning event successfully engaged stakeholders from across the North in the development of the overall model of care for young people who require to access tier 4 mental health services. Stakeholders included a number of young people and their families with experience of the existing Young People s Unit from a wide geographical area; clinicians, from all the relevant disciplines; managers and planners, including members of the NoS CAMHS Project Board and Service Modelling and Workforce Planning Group. In 2010, a working group was formed bringing together those individuals in NoS Board areas who were best placed to determine and execute communication and engagement activities in line with the NoS Tier 4 CAMHS Project. The group included Patient Focus and Public Involvement (PFPI), clinical and managerial representatives. All Board areas have been active in a variety of ways in engaging stakeholders in consultation around this project. Some of the other activities undertaken are listed below. Development of local engagement plans; Engaging with Tayside Youth Talkin Health around the development of consultation materials and questions, in February 2010; Attending a Youth Dialogue event in Grampian, consulting young people on the prospect of accessing specialist health services, at times delivered far from home (March 2010); Focus group activity and more concentrated engagement with Young People with experience of significant levels of mental health need (September 2010); Service user and clinical team input to the development and piloting of the tier 4 CAMHS Integrated Care Pathway (ICP) for North Scotland; 12 http://www.scotland.gov.uk/about/strategic-objectives 6

Innovative input from young people and parents at the Project Site Options Appraisal Event (November 2010). 1.3 Other Organisational Strategies All NHS Boards are required to ensure effective use of resources including property. During the Initial Agreement stage each of the 6 NoS Boards agreed that the likely capital development aspect of the project will be within NHS Tayside. NHS Tayside s Property Strategy Management Group seek to ensure that the asset portfolio of NHS Tayside is both utilised as effectively as possible and is planned and developed in line with the need to improve accommodation and reduce waste and duplication. The group seeks to ensure that all property in NHS Tayside support the goals of achieving an acceptable asset management categorisation level, and facilitates the maximisation of occupancy and utilisation of assets. The Six Steps Methodology to Integrated Workforce Planning 13 has been used in developing the workforce plans. Use of the guide across workforce planning has helped ensure that decisions made around design and recruitment of new staff and teams are sustainable, realistic and fully support the delivery of quality patient care and productivity and efficiency. All workforce plans have been agreed by the SMWPG and Project Board. Following Ministerial direction the proposed procurement route for the CAMHS project will be a Design, Build, Finance and Maintain revenue supported contract undertaken in collaboration with the East Central Territory hubco. The hub initiative has been developed by the Scottish Futures Trust (SFT) on behalf of the Scottish Government, as a means of improving planning, procurement and delivery of infrastructure that supports community services. The hub model has been developed specifically as a procurement vehicle tailored to meet the community needs of Scotland, whilst drawing on lessons learned from similar joint ventures in England. 1.4 Investment Objectives The following are the investment objectives for the project: Appropriate and timely care for adolescents in the NoS Region with severe and/or complex mental health problems and illness (Tier 4) Improved patient safety, better patient outcomes and person centred care for young people with Tier 4 need Local access to an enhanced level of specialist treatment and care when required, supported by network staff trained and skilled to work with this group of patients across a variety of settings. The aim is to provide the required level of care locally but to have easy and rapid access to inpatient care when appropriate Young people with severe mental illness Tier 4 have equitable response to their needs wherever they live, and irrespective of any additional disabilities they may have All young people with severe mental illness receive care consistent with recommended standards (QNIC, QINMAC, SAYP, MWC) 13 www.workforceplanning.scot.nhs.uk 7

Routine availability of family facilities and support during any periods of Tier 4 care Successful transitions to lower level or more local care when clinically appropriate Improved Joint working with Local Authorities and 3 rd sector partners Professional access to consultation with shared expertise and good practice across the NoS region through the establishment of a Specialist CAMHS Network Peer support, training and supervision for specialist CAMHS colleagues across the NoS Region working with young people with Tier 4 needs. 1.5 Existing Arrangements The current tiers of service provision for CAMHS within each participating NHS Board are described below: TIER 1 Each NHS Board area provides services via a variety of practitioners including GP s, Public Health Nurses, Teachers, Social Workers, Primary Mental Health Workers and / third sector Voluntary Agencies. TIER 2/3 Assessment, care and treatment for young people and consultation and advice to professionals in Tier 1. This is provided by uni-professional groups and multi-disciplinary CAMHS out-patient teams. The availability and range of skills and resources (and target age ranges) vary between NHS Board areas. TIER 4 Following assessment and identification of the need for a Tier 4 intervention, there are considered to be a number of settings in which young people are currently managed, often by staff working in Tier 2/3, For example: Community e.g. Intensive O/P or Day Care Services Local Authority Residential care Local Inpatient care in Adult Mental Health ward Regional Inpatient Care Alternative NHS Inpatient Facility Private Sector health care UK wide 1.6 Business Needs Current & Future The Service Modelling and Workforce Planning Group (SMWPG) have developed a model of Tier 4 CAMHS care required for the North of Scotland. The aim is to increase the provision of person centred care; make it available in a timelier, equitable local way; ensure transitions between service elements are well managed to meet young people s needs and promote continuing family engagement. 1.6.1 Current Tier 4 Provision At present, young people with severe mental illness and complex mental health issues are in the most part assessed and treated as far as possible by locally based CAMHS, operating in partnership with the local authorities and voluntary sectors to provide a suitable care package. The capacity to support these young people is often less than optimal due to lack of capacity within CAMHS, difficulty in delivering intensive services across a wide geographical 8

area, limited access to specialist assessment and treatment services and poor access to inpatient beds in a timely fashion when required. These factors can result in less than desirable levels of care with, at times, lengthy waits for treatment and patients with high levels of risk being supported in the community. Adult inpatient beds, as well as beds in paediatric wards, are being used to admit patients where risk is unacceptable, into settings which are not designed to meet their needs and intensive support to young people in those settings from CAMHS is often required to ensure acceptable levels of care. Access to adequate support for families causes additional stress and can undermine already fragile situations. There are real difficulties in working with families and keeping them engaged in treatment where either there are long distances to travel for care or the setting mitigates against good understanding of the necessity for this. The additional risks inherent in looking after young people in an adult environment where staff are not trained to respond to their developmental needs are significant. 1.6.2 Current Inpatient Unit The existing building, constructed in the 1840 s, is a square rubble mansion house of 17 th Century Scot s style and is in a poor state of repair. It was listed by Historic Scotland in May 1975 as a Category B building. Due to the building restrictions imposed by the listing, the general layout of the property and existing tree preservation orders relating to the grounds, the building does not lend itself easily to refurbishment. Recurring revenue costs in relation to Health and Safety, Fire, DDA compliance and the Control of Infection are significant and will continue to increase. In terms of patient care, young people admitted to the unit experience less than optimal accommodation. There is a shortage of rooms for visiting families and for clinical tasks, the treatment room is inadequate for carrying out medical tasks, the living accommodation is old fashioned and somewhat gloomy and there is a lack of privacy with sharing of bathroom facilities. Due to the inpatient unit being on the first floor, young people have poor access to outdoor spaces and often have to be accompanied by staff to be allowed outside. From a staff point of view, there is no staff space other than one office; the sightlines within the unit are poor from the point of view of observation, it is difficult to prevent young people leaving the unit without permission and it is an overly restrictive environment in terms of allowing the young people to exercise choice. 1.6.3 The Future Model The model consists of an Obligate Network for the North of Scotland which will underpin, and promote development of both local and regional services. Within the network, elements of care will be consistently provided in keeping with a common Integrated Care Pathway (ICP) The ICP will require partnership working with local authority education and social work services. The network will utilise predetermined clinical criteria to manage access to Tier 4 care in local care services and to a regional adolescent unit, and will use the ICP to promote equity of care provision whatever part of the network is providing care to a young person. The three elements proposed are as follows: A new regional Obligate Network for Tier 4 adolescent CAMHS care, using a model of care which will allow the sharing and monitoring of best practice methods. The SMWPG has developed an ICP for all Tier 4 adolescent patients in the North of Scotland area. A local Tier 4 provision in each board that includes intensive care services with a local capacity to support any admissions to the regional in patient facility. The local Tier 4 capacity should be developed in tandem with community based CAMHS support at 9

Tier 3, in a consistent way across the North of Scotland to support the implementation of the ICP for Tier 4 care. Re-provision and expansion of the existing Adolescent Unit based in NHS Tayside to create an expanded fit for purpose, single regional Tier 4 adolescent in patient facility. This new 12 place dedicated adolescent inpatient unit would accept referrals from all NHS Boards across the North of Scotland. The inpatient facility would be an integral part of the Tier 4 provision for the North of Scotland and closely aligned with the Regional workforce. The NoSPHN needs assessment reviewed currently available evidence on outcomes and concluded there is no evidence that any single care option will produce the best outcomes for all young people with Tier 4 need, or even for all those with a given diagnosis and a related Tier 4 level of need. A range of options is therefore required to allow an appropriate balance between elements of need such as local care, highly specialist care, and care in an adolescent only environment. Tier 4 service elements are a key component of the wider development of local and regional services. This is described in figure a. below. NoS Tier 4 CAMHS Obligate Network V2.1 Local NHS Board Tier 4 Services Regional Tier 4 Services Maintain in community setting (intensive community or day services) Admission to local Adult MH Ward **see note Admission to General Medical/ Paediatrics **see note Obligate Network Liaison Workers Regional Adolescent Inpatient Unit Assessment - Tier 4 ICP Regional Tier 4 needs identified Local START Local Tier 3, Tier 2 Services ** May be clinically appropriate in terms of exceptional circumstances, context, choice, age, geography, availability Figure a. The above diagram demonstrates how the proposed Tier 4 adolescent CAMHS Obligate Network would function. 10

1.7 Desired Scope & Service Requirements The project outlined in this document covers the development of a new regional obligate network for Tier 4 CAMHS care for the NoS based on the following: Development and implementation of an Integrated Care Pathway for Tier 4 adolescent mental health care Network and transitional Tier 4 services Development of Local Tier 4 adolescent CAMHS within each of the 6 NoS NHS Board areas Regional development and procurement of a 12 place dedicated adolescent Tier 4 Inpatient unit Development of a detailed local and regional NoS workforce plan to support both the network and new regional 12 place inpatient unit Development of a model for education and social work provision for all patients receiving care within the network Development of a Regional Clinical Governance framework for Tier 4 adolescent mental health care across the North of Scotland. 1.8 Benefits Criteria The high level benefits criteria for this project were identified through the options appraisal process and shown in table 1 below: Table 1. High Level Benefits Criteria Benefits Criteria Service Effectiveness Close integration and links with other services Accessibility and Transport Links Recruitment and retention of staff Site feasibility & sustainability Access to local amenities Description Degree to which the development improves/enhances the organisation s clinical service effectiveness overall, i.e. Improves Clinical Outcomes The degree to which links can be made, or maintained, with clinical, local authority and voluntary sector services locally and regionally. The extent to which the proposal improves, or maintains, the current level of accessibility to the unit, taking into account the NoS geography and public transport links The extent to which the proposal will promote, or enable, the recruitment and retention of the necessary level of highly specialist inpatient CAMHS staff The degree to which the proposal can be developed to meet the needs of the service, and helps achieve the aims of the NHS Tayside asset management and estates strategy The extent to which access to high quality local amenities and recreational facilities is either improved or maintained at current levels. 11

2. The Economic Case 2.1 Main Business Options During the Initial Agreement stage the Project Board assessed a number of business options based on their ability to meet the need for CAMHS across the NoS. In addition to these options a further 2 options have been included for evaluation in the OBC option 1 Do Nothing and Option 3 Do Minimum and provide an additional 6 places purchased from private organisation(s), either regionally or in each Board area The full list of service options evaluated during the OBC development is as follows: Option 1 Do Nothing Option 2 - Do Minimum Existing Dudhope Site Option 3 - Do Minimum and provide an additional 6 places purchased from private organisation(s), either regionally or in each NHS Board area Option 4 - Each NHS Board consumes need within existing services and NHS Tayside re-provides 6 place inpatient unit Option 5 - Each NHS Board purchases services from other regional facilities Option 6 - Provision of 12 places purchased from private organisation(s),either regionally or in each NHS Board area Option 7 The development of a regional network of specialist tier 4 services including a regional inpatient facility. 2.2 Benefits Appraisal 2.2.1 Service Options Appraisal The SMWPG undertook a non-financial benefits appraisal using the benefits criteria identified in section 1.8. For the purposes of scoring the main service options the criteria site feasibility and sustainability was not considered. This exercise was conducted in the Boardroom, ARI, Aberdeen, and was facilitated by the NHS Tayside Capital Projects Manager. 12

2.2.2 Summary Table from Benefits Scoring Table 2 below summarises the results of the service options scoring exercise and ranks each option based on their ability to meet the identified benefits criteria. Table 2. Options Scoring Summary Table Service Option Weighted % of total Ranking Score score Option 1 - Do Nothing 46 5% 5 Option 2 Do Minimum 168 17% 3 Option 3 Do Minimum and provide an additional 6 places purchased from 0 0% =6 private organisation(s),either regionally or in each NHS Board area Option 4 - Each NHS Board consumes 508 51% 2 need within existing services and NHS Tayside re-provides 6 place inpatient unit. This would effectively mean each Board providing inpatient services within its own area Option 5 - Each NHS Board purchases 0 0% =6 services from other regional facilities Option 6 - Provision of 12 places 70 7% 4 purchased from private organisation(s),either regionally or in each NHS Board area Option 7 - The development of a regional network of specialist tier 4 services including a regional inpatient facility. 773 77% 1 2.2.3 Site Options Appraisal During Initial Agreement stage each of the 6 NoS Boards agreed that were the preferred option to include the provision of increased inpatient capacity, that this would be located within Tayside. Following the identification of the need to provide a regional inpatient facility within Tayside, an assessment of the non-financial benefits was carried out to identify a preferred site for the service to be located. This exercise took the format of a site options appraisal event incorporating stakeholder representatives across the project. The purpose of this exercise was to evaluate and compare the non-financial benefits of the short list of site options as identified by the NHS Tayside Property Strategy Group. The short list of site options is shown in table 3 below: Table 3. Short List of Site Options Site Description Option 1 Do Minimum. Retain the 6 staffed inpatient places at the existing Dudhope facility in Dundee and continue to carry out the minimum amount of maintenance as required. 2 Dudhope Site 3 Ninewells Hospital 4 Perth Royal Infirmary 5 Murray Royal Hospital 6 Stracathro Hospital 7 Earn Crescent, development plot at Menzieshill, Dundee 13

2.2.4 Assessment of Non Financial Benefits Result Having scored the site options, the outputs were aggregated and averaged. Subsequently the relevant weightings were applied to the scores to provide a total weighted result for each option as shown in table 4 below. Table 4. Site Options Scoring Summary Table Final Scored Rank Site Option Number Site Option Final Score Score % 1 Option 2 Dudhope Site 2428 81% 2 Option 3 Ninewells Hospital 1838 62% 3 Option 1 Do Minimum 1620 54% 4 Option 7 Earn Crescent, Dundee 1544 52% 5 Option 4 Perth Royal Infirmary 1488 50% 6 Option 5 Murray Royal Hospital 1402 47% 7 Option 6 Stracathro Hospital 861 29% As the results show, only option 2 scored in the top quartile with a score of 81%, making this the preferred option by a considerable margin, making this the preferred site option. 2.2.5 Preferred Way Forward The process undertaken within sections 2.2.1 and 2.2.3, which measured each of the service and site options against agreed benefits criteria, identified which options were to be taken forward for further appraisal. It was agreed that the Do Nothing and Do Minimum options could not be taken forward as realistic options as they do not satisfy the criteria of the project. However in line with Scottish Capital Investment Manual Guidance the Do Minimum option will be taken forward as a baseline. The result is a short list of 2 options: Option 2 - Do Minimum Option 7 - The development of a regional network of specialist tier 4 services comprising a regional inpatient facility. 14

3. The Commercial Case Following Ministerial direction, the proposed procurement route for the CAMHS project will be a Design, Build, Finance and Maintain (DBFM) revenue supported contract undertaken in collaboration with the East Central Territory hubco. East Central Territory is one of five territories, created as part of the hub initiative, that will establish public/private joint venture companies, referred to as hubco. With the exception of NHS Tayside, other project partner NHS Boards are participants of the North Territory. The East Central Territory will take forward this project given the preferred option of locating the new inpatient unit in NHS Tayside. The East Central hubco, working closely with the relevant Territory Participants, including those in the North, will deliver effective planning, coordination, procurement and delivery of accommodation and facilities within local communities, bringing together public sector partners across Health, Local Authorities, Police, Fire and Rescue and voluntary sector organisations and others where appropriate. The hub initiative has been developed by the Scottish Futures Trust (SFT) on behalf of the Scottish Government, as a means of improving planning, procurement and delivery of infrastructure that supports community services. The hub model has been developed specifically as a procurement vehicle tailored to meet the community needs of Scotland, whilst drawing on lessons learned from similar joint ventures in England. The East Central Hub Programme was formed in August 2010 and advertised in the Official Journal for the European Community (OJEU) in September 2010. The advert returned 9 expressions of interest which were then short listed to 3 preferred bidders on 11 th February 2011 using the evaluation process and criteria detailed within the Pre-Qualification Questionnaires. Following a period of Competitive Dialogue, which began in March 2011, the 3 preferred bidders will be invited to submit final tenders by the end of August with a view to identifying a Preferred Bidder in early October and reaching Financial Close in December 2011. Table 5. Key hubco dates Stage Timetable OJEU Notice September 2010 Pre-Qualification Questionnaires (PQQ s) submitted November 2010 Shortlist of 3 bidders identified February 2011 External advisers appointed February 2011 Competitive dialogue commenced March 2011 Invitation to Submit Final Tenders issued August 2011 Preferred Bidder Selection October 2011 Financial Close December 2011 Following the identification of the single preferred bidder in October 2011 early dialogue can take place with the hubco partner in advance of financial close in December 2011. This will allow discussion around the details of the contract and the development of the Full Business Case which is to be submitted to SGHD CIG in November 2012, following proposed approval by the 6 NoS Health Boards. 15

4. The Financial Case The Generic Economic Model has been used to derive comparative cost implications in the form of Net Present Costs (NPC) and Equivalent Annual Costs (EAC). For the purpose of the economic evaluation Option 2 has been discounted over a 20 year lifespan and Option 7 over a 25 year lifespan. The EAC brings projects of different lifespans to a common lifespan basis the NPC is not meaningful when comparing options which cover varying time spans. A cost per benefit score was also calculated for each option to ascertain value for money ranking. The table below summarises the Capital and Revenue Costs and the results of the Economic Appraisal. The results of the Economic and Financial Analysis consolidate the position of Option 7 as the preferred option, alongside the outcome of the non-financial benefits appraisal. It should be noted that option 2 is only included within the appraisal as a baseline as per SCIM guidance and is not a feasible option for taking forward. Table 6: Summary of Economic and Financial Appraisal Option 2: Do Minimum Option 7: Regional network and regional inpatient facility Total Capital Cost 2,465k 2,619k Total Revenue Cost 1,978k 4,095k Additional Revenue Required 103k 2,092k Net Present Cost (NPC) 28,747k 68,748k Equivalent Annual Cost (EAC) 2,020k 4,162k Non-financial benefit score 168.0 773.0 /benefit score 12,022 5,384 Value for Money ranking 2 1 The capital cost for option 2 is based on the refurbishment of the existing facility. This option would not be feasible to procure through hubco. Current revenue expenditure would be increased by 103k as a result of additional capital charges (depreciation). The capital cost for option 7 has been derived in conjunction with the feasibility study carried out by the Design Team, and the capital costs in respect of the in-patient facility have been input into HM Treasury Value for Money Quantitative Assessment Model to enable an estimation of the annual Unitary Charge ( 667k). This model has been used on the advice of Scottish Futures Trust (SFT) pending the appointment of the East Central Territory hubco preferred partner. This same model was also used to estimate the likely revenue support from Scottish Government in relation to the Unitary Charge element of the revenue costs associated with this option ( 645k). Dundee City Council have indicated that they would provide a capital contribution equivalent to the construction cost (including fees, equipment and VAT where applicable) of the inpatient education facility. NHS Tayside would account for this element of the facility as a donated asset. The additional capital funding required to purchase the equipment associated with the inpatient facility has been estimated at 652k, and funding for this is to be provided by Scottish Government. This project has been allocated 904k capital enabling funds from the East Central hub Territory to cover the costs of Design Team Professional Fees ( 664k); Site surveys, Building Warrants and Planning Application ( 38k); and External Legal, Technical and Financial Advisors ( 202k). This capital funding allocation has been taken into account when determining the capital and revenue consequences of this project The table below summarises the capital costs to be met by Dundee City Council and the Scottish Government for the preferred option (Option 7). 16

Table 7. Summary of the Preferred Option Capital Costs Funded by: Total Dundee City Council 000 s 000 s In-patient education 1,063 1,063 0 facility In-patient equipment 652 0 652 ECT hub Capital 904 0 904 Enabling Fund Total 2,619 1,063 1,556 Scottish Government Additional CRL 000 s Although option 7 passes the Economic and Value for Money tests, it does not mean it is affordable. The partner NHS Boards still have to find the additional recurring revenue resource of 2,092k per annum over and above current levels of expenditure to cover the element of the hubco unitary charge not supported by Scottish Government revenue, soft FM services, utilities costs, additional staffing costs and the equipment depreciation charges. The Scottish Government letter dated 22 March, 2011 Scottish Government Funding Conditions for delivering projects through the non profit distributing model outlined the level of revenue support that procuring NHS bodies could expect to receive, subject to a number of conditions stated in the letter, towards the following elements of the unitary charge: 100% of construction costs (subject to the agreed scope of the project) 100% of private sector development costs (subject to an agreed cap) 100% of financing interest and financing fees (at prevailing Financial Close rates) 100% of SPV running costs during the construction phase (subject to an agreed cap) 100% of SPV running costs during the operational phase (subject to an agreed cap) 50% of lifecycle maintenance costs. The procuring body is required to support the following elements of the unitary charge: 100% of Hard FM (facilities management) costs 50% of lifecycle maintenance costs. Dundee City Council also requires funding for the additional recurring revenue resource of 160k in relation to their share of the running costs of the facility and additional teaching staff. Staff costs in respect of Option 7 are based on the recommendations contained with the Workforce Plan. The additional revenue required to be funded by the NHS Boards and Dundee City Council has been calculated on the basis of the total revenue required to support Option 7 less the average expenditure by each of the NHS Boards on CAMHS beds over financial years 2007/08 through to 2010/11. Taking account of the anticipated Scottish Government revenue support ( 645k) towards the unitary charge, the 2,092k additional revenue requirement will be covered by the partner NHS Boards and Dundee City Council as outlined the table 7 below. 17

Table 8: Summary of additional revenue funding required NHS Grampian NHS Highland NHS Orkney NHS Shetland Share of total revenue consequences Less: current expenditure Additional Funding required NHS NHS Dundee Total Tayside Western City Isles Council 000 s 000 s 000 s 000 s 000 s 000 s 000 s 000 s 1,618 743 72 77 1,321 104 160 4,095 649 390 0 44 920 0 0 2,003 969 352 72 33 401 104 160 2,092 The above share of total costs for the NHS Boards has been estimated on the basis of target NHSScotland Resource Allocation Committee (NRAC) % s. This is the agreed methodology within the NoSPG, and will be adopted until the facility becomes operational and actual usage information becomes available, at which stage the cost sharing agreements will be subject to review. If parity has not been achieved at the time of the facility becoming operational, then actual NRAC shares as opposed to target NRAC shares will be adopted. A financial risk sharing agreement will also be developed should there arise the occasion when a partner Board were not able to access a bed at the regional facility and were required to purchase a bed at another NHS or non-nhs facility. 3.1 Optimism Bias The Treasury s Green Book, published in 2003, introduced a requirement for an adjustment to be made for optimism bias for capital costs for all NHS capital schemes. Although the Ministerial directive is that the preferred option will be a revenue funded project procured through hubco, capital costs and optimism bias still require to be determined in order to estimate the annual unitary charge payment using the HM Treasury Value for Money Quantitative Assessment Model. Optimism bias refers to the tendency when evaluating publicly funded projects to overestimate the benefits and underestimate the costs. Evidence from the Treasury indicates that public sector procurement options typically suffer from optimistic bias in the estimation of costs and benefits. Optimism Bias for the preferred option has been kept under review since the approval of the Initial Agreement. Table 8 below summaries the Optimism Bias for each option, and the movement from IA to OBC. Optimism Bias of 19.38% has been included in the OBC capital costings for Option 2 and 26.26% for Option 7. Table 9. Summary of Optimism Bias Option 2: Do Minimum Option 7: Regional network and regional inpatient facility IA OBC IA OBC Mitigation Factor % 76.00 76.00 81.00 69.00 Upper Bound % 25.50 25.50 48.00 38.00 Optimism Bias % 19.38 19.38 38.88 26.26 18

5. The Management Case 5.1 Potential Implementation Timescales A programme for the project has been developed based on assumptions regarding both Outline and Full Business Case approval and the successful appointment of the preferred Private Sector Partner and the establishment of the hubco. A summary of the identified target dates is provided as follows: Stage 2: Consideration of Table 10. Key dates Task Date Hubco Private Sector Partner Appointed October 2011 OBC submitted to SGHD CIG January 2012 Recruitment to network roles Financial Year 2012/13 FBC submitted to SGHD CIG November 2012 At this stage a funding package will be implemented and therefore subsequent dates will be dependent on this being in place Construction - start on site February 2013 Completion Date (based on 18 month build programme) August 2014 Service operational October 2014 As highlighted above there is potential for early implementation of the network roles in advance of the commissioning of the regional inpatient unit. This would have implications in terms of phasing of costs within financial plans. This would have clinical benefits for patients and staff and would enable smooth implementation of the Integrated Care Pathway (ICP). This would in no way preclude the requirement for the inpatient unit. 5.2 Project Management Project Management structures are in place and in line with the latest guidance in the Scottish Capital Investment Manual and current NHS practice. The SMWPG consists of a number of staff from across various departments and the team are responsible for the delivery and co-ordination of all activities within the project plan. The SMWPG reports directly to the Project Board with exception reports, change control notifications, risk and issue logs and requests for conflict resolution. The project also has representation and involvement through a representative of the public on the Public Partnership Group, who works alongside other project team members to influence the shape of the proposed service. Competencies and skills of project leads are appropriate to the delivery of this proposal: The Project Sponsor is the Deputy Chief Executive, NHS Tayside A Project Clinical Lead has been appointed by NoSPG The Project Lead is the Director of Regional Planning and Workforce Development for the NoS Financial input and expertise is provided from a dedicated NHS Tayside Project Accountant A Project Manager with appropriate qualification SFT Support/Hub Support. 19

5.3 Project Risks The risk log for the project has been developed and monitored by the SMWPG throughout the Initial Agreement and OBC stages. The risk assessment matrix exercise undertaken looked at the likelihood of a risk materialising and what the subsequent impact would be, when multiplied this gave a total for the risk that can be allocated as low (1-10), medium (11-18) or high (19-25). Each risk also had management actions identified to present how each risk could be mitigated in the event of the risk materialising. Below is a summary of the key risks associated with the preferred option: Table 11. Key project risks Risk Ref # Description of Risk Risk Category S001-S006 Failure to develop Local Tier 4 provision across NoS Boards 20 to support regional network and overall service deliver model S010 Inability to recruit suitably qualified and experienced 20 Medical, Nursing and AHP staff for regional CAMHS network S024 Failure to gain Outline Business case approval from all NoS 25 Boards F002 Inability to identify funding for revenue contributions for 20 construction and ongoing revenue costs following project completion D002 Change in requirements of stakeholders 20 ST007 The project will have to be bundled with another hubco project in order to deliver value for money 25 Following the confirmation of the preferred East Central hubco Private Sector Partner in October 2011 and during the period to Financial Close each bidder has confirmed in dialogue submissions that they will implement a shadow hubco to ensure that known projects, including this project, can be progressed through design and ongoing appropriate Business Case development. During the defined stages of project approval, risk identification, management and allocation will be dealt with in accordance with best practice and SCIM 14 guidance. 5.3 Benefits Realisation A Benefits realisation plan will be developed for the project and will be used to model and track benefits gained from the successful project. Each benefit will be allocated a lead who will be responsible for monitoring and reporting against the timescales. The initial list of benefits to be gained from this project are detailed below: Legislation compliance - Health & Safety, DDA, Mental Health Care and Treatment Act Improved patient journey Reduction in waiting times Improved care in tiers 2 & 3 Increased bed capacity Reduction in length of stay in inpatient unit Reduction in delayed discharges 14 http://www.scim.scot.nhs.uk/ 20