Health

Outline Business Case

DRAFT V 1

Critical Care Services November 2014

Critical Care OBC Contents

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Document Control Sheet

Document Title St George’s Healthcare Critical Care Outline Business Case

Version 3

Status

Owner TBC

Author Jennifer Owen

Date 20 November 2014

Further copies from Jennifer Owen

Document History

Version Date Issued Brief Summary of Change Author

1.0 31/10/14 Initial version J Owen

2.0 07/11/14 Submission to EMT J Owen

3.0 20/11/14 Submission to Trust Board J Owen

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Purpose of this document

This document provides an Outline Business Case (OBC) which sets out proposals for investment in the provision of additional capacity to Adult Critical Care at St George’s Healthcare NHS Trust. It summarises key decisions and activities undertaken to develop these proposals and to provide a robust basis for investment and associated decision making.

The main purpose of this OBC is to establish the need for investment; to appraise and confirm the main options for service delivery; and to provide the Trust Board with the recommended way forward.

The Outline Business Case will seek to confirm the strategic context of the investment; to make a robust case for change, and to provide stakeholders with the preferred way forward, with indicative costs.

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Contents

Appendix vii

1. Executive Summary 1

1.1 Introduction 1

1.2 Strategic Case 1

1.3 Economic case 3

1.4 Commercial case 4

1.5 Financial Case 5

1.6 Management Case 5

1.7 Recommendation 7

2. The Strategic Case 8

2.1 Introduction 8

2.2 Structure and content of the document 8

Part A: Strategic Context 9

2.3 Introduction 9

2.4 Organisation Overview 9

2.5 Trust Strategic Objectives 14

2.6 Trust Mission & Vision Statement 15

2.7 Strategic Context - National, Regional and Local Influences 16

2.8 Site ownership and Site Constraints 18

Site Specific Constraints 19

Background to the Redevelopment Requirement for Adult Critical Care 19

Part B - The Case for Change 21

2.9 Introduction 21

2.10 Investment Objectives 21

2.11 Background to the Redevelopment Requirement for Adult Critical Care 23

2.12 Business Needs 24

2.12.1 Key Drivers for Change 24

2.12.2 Capacity and Demand 24

2.12.3 In-Year Demand Increases Based on Service Level Agreement Proposals 25

2.12.4 Off-site Activity 25

2.12.5 Total Activity Growth – Admissions and CCMDS bed days 26

2.13 Quality of Care 26

2.14 Potential Business Scope & Key Service Requirements 29

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2.15 Main Benefits Criteria 30

2.16 Design Quality and Philosophy 31

2.17 Summary 32

2.18 Main Risks 32

2.19 Constraints 33

3. Economic Case 34

3.1 Introduction 34

3.2 Critical Success Factors 34

3.3 Long List of Options 34

3.4 Long List: inclusions and exclusions 35

3.4.1 Determining the Capacity 37

3.5 Short-listed Options 37

3.6 Economic Appraisal 39

3.7 Options Appraisal: Financial 40

3.7.1 Capital Costs 40

3.8 The Short Listed Options 43

3.9 Qualitative Benefits Appraisal 43

3.10 Risk Appraisal – Unquantifiable 46

3.11 The Preferred Option 46

4. Commercial Case 48

4.1 Introduction 48

4.2 Commercial Strategy 48

4.3 Procurement Strategy 48

4.4 Key Factors Affecting Outcomes 48

5. Financial Case 50

5.1 Introduction 50

5.2 Capital Costs 50

5.3 Impact on Balance Sheet 55

5.4 Overall affordability 55

6. Management Case 56

6.1 Introduction 56

6.2 Project Governance Arrangements 56

6.3 Project Management Arrangements 56

6.4 Project Board Role & Responsibilities 57

6.5 Membership of the Project Board 58

6.6 Internal Project Management Arrangements 58

6.7 Programme Milestones 63

6.8 Construction Programme 64

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6.9 Use of Special Advisors 64

6.10 Stakeholder Engagement Plan 65

6.11 Outline Arrangements for Change and Contract Management 65

6.12 Outline Arrangements for Benefits Realisation 66

6.13 Programme Quality & Assurance Management 66

6.14 Outline Arrangements for Risk Management 66

6.15 Outline Arrangements for Post Project Evaluation 68

6.16 Gateway Review Arrangements 68

6.17 Contingency Plans 68

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List of Tables

Table No. Description Page No. 1 Summary of Capital Costs 4

2 Summary of Capital Expenditure 5

3 Summary of Income and Expenditure 5

4 Project Board Membership 6

5 Key Programme Milestones 6

6 Programme for OBC Approval 8

7 Trust Services 12

8 Strategic Context Summary 16

9 Investment Objectives 22

10 Critical Care Beds 23

11 Activity increase over 5 years (activity in CCMDS bed days) 24

12 Projected Activity 26

13 Standardised Mortality Rate 28

14 Potential business Scope and Key Service Requirements 30

15 Investment Objectives and Benefits 30

16 Main Risks & Counter Measures 32

17 Long Listed Options 35

18 Results of Review of Long Listed Options 35

19 Summary Assessment of Scoping Options 36

20 Capacity Requirement at 85% occupancy 37

21 Option 2 - Proposed phasing of works 37

22 Option 3 - Proposed phasing of works 38

23 Main Benefits 40

24 Summary of Capital Costs 41

25 Whole-life Costs of Short List Options 42

26 Short Listed Options and Indicative Capital Costs exclusive of VAT 43

27 Project Team 43

28 Criteria Weighting Results 44

29 Raw Score Results 45

30 Scoring Results – Weighted 46

31 Summary of Economic and Value for Money Appraisal 47

32 Estates & Facilities Budget 48

33 Result of last three years & projections for Current Financial Year 50

34 Summary of Capital Expenditure 50

35 Adult Critical Care – Inflation, tariff and efficiency assumptions 51

36 Divisional Income Expenditure at 2014/15 Prices 52

37 Incremental expenditure at 2014/15 prices 52

38 Summary of Revenue Income and Expenditure 53

39 Cash Flow impact of the scheme 54

40 Impact on Trust Balance Sheet 55

41 Project Board Members 58

42 Programme Milestones 63

43 Project Plan 64

44 External Advisors 65

45 Key Stakeholders 65

46 Risk Register Colour Code 67

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Appendix

Appendices are attached as separate documents and consist of the following:

Appendix 1 – Detailed Summary of Strategic Context Influences

Appendix 2a. Preferred Option Proposed layout

Appendix 2b. Phased drawing

Appendix 3. Economic & Financial Case Workings

Appendix 4. OB forms

Appendix 5. Steering Group Terms of Reference

Appendix 6. Benefits Realisation Plan

Appendix 7. Risk register

Appendix 8. Risk policy

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1. Executive Summary

1.1 Introduction

This OBC seeks approval to invest an estimated £13.6m in the development of 13 additional beds for Adult Critical Care at St Georges’ Healthcare NHS Trust, so that it addresses the demand challenges faced by the service. It focuses on identifying an option that offers an immediate solution to address short and midterm demand pressures and associated issues that would enable capacity to come on line in tandem with the increased demand.

The Trust’s main site is St George’s Hospital in Tooting. The hospital is one of the country’s principal teaching hospitals and is shared with St George’s, University of London, training medical students and conducting advanced medical research. The Hospital also hosts Faculty of Health and Social Care Sciences for both University of London and Kingston University. This faculty is responsible for training a wide range of healthcare professionals from across the region.

In 2010 St George’s Hospital became one of the four major trauma centres, and one of the eight hyper-acute stroke units, for London. 2013 saw the opening of the new pre-operative care centre and 2014 the introduction of an air ambulance helipad. The Trust will be expanding its state-of the-art neuro-rehabilitation services, at Queen Mary’s Hospital, and expects to have a large role to play in the future provision of healthcare across southwest London. The Trust has recently submitted its application for Foundation Trust status and it is hoped that Foundation Status will be awarded towards the end of 2014 calendar year.

1.2 Strategic Case

The strategic context

St George’s Healthcare Trust is focused on becoming a successful Foundation Trust (FT) that is internationally recognised for placing quality, safety and innovation at the centre of its service provision. At the end of 2012 St George's Healthcare launched a new 10 year strategy for the trust following nearly a year of development with our staff and partners. We have developed this strategy to ensure that we deliver:

Better health outcomes for all

Improved patient access and experience

Empowered, engaged and well-supported staff

Inclusive leadership at all levels

St George’s Hospital’s Clinical Strategy outlines the clinical service aims of the Trust for the next 10 years. The clinical strategy highlights that a key strength of the Trust is the vast range of acute and specialist services delivered from the Tooting Hospital campus. This results in a wealth of clinical expertise together on one site.

The crux of the clinical strategy is to expand and develop the key specialist services; examples such as a helipad which will require fast access to critical care services and services models which will enable integrated patient flows. To ensure the best outcomes and support the delivery of this strategy, the Trust needs to have a critical care service that can provide the appropriate capacity and level of care to embrace these changes.

The case for change

Adult Critical Care at St George’s is composed of three main units; and one satellite unit: A neurosurgical Intensive Care (NICU, 14 beds), A Cardio-thoracic Intensive Care (CTICU, 15

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beds and 3 beds on the shared Coronary Care Unit which is linked to the main CTICU unit), a General Intensive Care (GICU 18 beds), plus a General ICU satellite unit (3 beds). GICU is located on the first floor of St James Wing, CTICU and NICU are located on the first and second floors respectively of the Atkinson Morley Wing. GICU takes the majority of non-neurosurgical and non-cardiac emergency admissions, and the majority of the major surgical elective workload.

Increasing demand sentence(s)

The three units work collaboratively to meet surges in demand and benefit from the ability to exchange clinical expertise and practice. This cooperation and flexibility has been responsible for managing the impact of the capacity shortage. However, this does require the non-clinical transfer of patients between units, which is both time consuming, a drain on limited resources such as cleaning, creates delays in admission to critical care from other areas such as Emergency Department and is not in the best interests of the patient being transferred. Furthermore, it has been suggested that in future, our Commissioners will financially penalise us for all non-clinical transfers of care between ICUs.

The General Intensive Care Unit is over 25 years old and none of its beds comply with the HBN04-02 recommendations. This non-compliance is on the Trust Risk register recorded as individual risks which have scores that range between 9 and 20 (moderate to high risk). Should the unit be refurbished within its current footprint to comply with the current HBN04-02: recommendations, the unit would lose in excess of 50% of its current capacity. Such works would incur a significant capital spend without addressing the current, let alone future, capacity shortfall.

Therefore the case for change is based on two factors, the first being the lack of capacity to deliver the Trust’s Clinical Strategy and second, is the upgrading of the current infrastructure to bring it in line with the current building guidance. Critical Care at St George’s Healthcare NHS Trust has a key role to play in delivering patient care pathways. The increasing number and complexity of patients within the Trust requiring this level of care creates the urgency of addressing the current need for change.

Key Drivers for Change

The project objectives identify the following as key drivers for change:

The increasing demand for ICU services is greater than the current capacity can provide. Future demand projections identify around an 18% increase by 2019

The necessity to increase the quality of the existing bed stock in order for the service to provide the quality of care needed for future requirements.

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1.3 Economic case

The long list

The following options were considered using the options framework:

Options Description Cost Short Listed

1 Do Nothing – baseline comparator Nil

2

A phased option is planned delivering: first an additional four

bed spaces on the neuroscience intensive care unit and then a

General Intensive Care Unit roof-top extension on St James’s

Wing and internal refurbishment totalling 2,244 sq m – delivering

an additional nine new compliant bed spaces plus and upgrade

of nine existing bed spaces to compliant standards.

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New Build – the creation of a new two storey building including a shell only on the ground floor providing totalling 2,266 sq m, providing ten additional beds, plus refurbishment of 490 sq m accommodation displaced in Knightsbridge wing.

4 Creation of three, four bedded elective surgical critical care bays on 3 different wards

X

5 Conversion of the light well in St James’ wing recovery into a 4 bedded elective surgical critical care unit

X

6 Conversion of the General Intensive Care unit’s equipment storage facilities and office space into a 4 bedded HDU

X

The preferred way forward

On the basis of the above analysis, the Trust has therefore selected options 2 and 3 to financially appraise for this OBC; determining the affordability of each option in terms of the capital and revenue demand that will be placed on the Trust as a consequence of delivering.

The short list

On the basis that the preferred way forward is agreed, we recommend the following options for further, more detailed evaluation within the Full Business Case (FBC):

Option 1 – Do Nothing for baseline comparator

Option 2 – A phased option is planned delivering; first an additional four bed spaces on the neuroscience intensive care unit and then a General Intensive Care Unit roof-top extension on St James’s Wing and internal refurbishment totalling 2,244 sq m – delivering an additional nine new compliant bed spaces plus an upgrade of 9 existing bed spaces to compliant standards.

Option 3 – New build located adjacent to Knightsbridge Wing with maximum capacity beds numbers 10 beds taking total beds to 67 beds.

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Consequently, the preferred option will be identified and recommended for approval within the OBC.

Indicative economic costs

The indicative costs for the scheme are as follows:

Table 1 Summary of Capital Costs

Items

Option 2

GICU

Option 3

New Build

£’000 £’000

Departmental Costs 4,025 5,780

On Costs 395 1,645

Total Works Cost Total 4,420 7,425

Location adjustment (9%) 398 668

Total Construction Cost 4,818 8,093

Fees (15%) 1,086 1,469

Non-works costs 300 280

Equipment Costs 1,411 1,186

Planning Contingency 761 1,103

Total for approval 8,376 12,131

Optimism Bias 921 2,036

Inflation adjustments 2,042 3,112

Total cost to outturn 11,339 17,279

VAT 2,268 3,456

Total including VAT 13,607 20,735

1.4 Commercial case

Procurement strategy

The scheme will be procured under EO OJEU tendering procedures.

The advantages of this method of procurement are:-

Trust retains control over the Design Team carrying out the detailed design.

Price certainty and transfer of risk to the main contractor is achieved at contract award, provided no subsequent changes are instructed to the design.

A high level of quality in design and construction is achievable.

Changes to the works can be evaluated on the basis of known prices obtained in competition.

OJEU was chosen due to the amount of design work that had to be completed in the feasibility stage in order to calculate the weight requirements for the roof, loading of services and whether the building would require reinforcement.

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Required services

The required products and services in relation to the preferred way forward are briefly as follows:

To increase NICU capacity to 18 beds

To increase GICU capacity to 30 beds by 2019/20

A new GICU facility that is compliant with modern standards of critical care delivery

Potential for risk transfer and potential payment mechanisms

Proposed risk transfer will be set in the contract agreed through the OJEU process

1.5 Financial Case Table 2 Summary of Capital Expenditure

Capex

2014/15 2015/16 2016/17 2017/18 2018/19 Total

New build - GICU 0 5,074 6,771 0 0 11,845

Refurbishment - NICU 220 1,542 0 0 0 1,762

Total capex 220 6,616 6,771 0 0 13,607

Table 3 Summary of Income and Expenditure

1.6 Management Case

This scheme is an integral part of the Trust Clinical Strategy 2012-2022, which highlights that a key strength of St George’s Healthcare NHS Trust is the vast range of acute and specialist services delivered from the Tooting Hospital campus. This results in a wealth of clinical expertise together on one site. This is supported by the Trust’s 10 year Strategy which sets out the Trust vision for the future, built around delivering healthcare of exceptional quality underpinned by leading edge research and teaching. The key objectives are:

Redesign care pathways to keep more people out of hospital

Redesign and reconfigure our local hospital services to provide higher quality care

Consolidate and expand our key specialist services

Provide excellent and innovative education to improve patient safety, experience and outcomes

Drive research and innovation through our clinical services

Improve productivity, the environment and systems to enable excellent care

2014/15 2015/16 2016/17 2017/18 2018/19 2019/20

Income 0 1,035 2,145 3,297 4,410 5,544

Total Operating Costs 0 -513 -2,495 -2,894 -2,810 -4,125

EBITDA 0 523 -350 404 1,600 1,419

Depreciation 0 -11 -168 -298 -304 -311

Impairments 0 -705 -2,369 0 0 0

0 -193 -2,887 106 1,295 1,108

Interest on loans -16 -257 -473 -454 -435 -415

PDC dividend payable 0 24 269 101 66 58

Surplus/(deficit) for the year -16 -426 -3,092 -247 927 750

Surplus before interest

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Develop a highly skilled and motivated workforce championing our values

The project will be managed using PRINCE 2 compliant methodology and project management tools such as Gantt charting and critical path analysis. Project direction and management will be determined by the Project Board.

The project will be managed by the St George’s Hospital Healthcare Trust. The Project Board has the responsibility to drive forward and deliver the outcomes and benefits of the project, being the provision of a expanded, modern and safe Critical Care service, compliant with NHS standards of construction and delivery.

In order to ensure successful delivery of the development, the Project Board is made up as follows:

Table 4 Project Board Membership

Member Title

Eric Munro Director of Estates & Facilities; Chair

Sofia Colas Divisional Director of Operations

Dr Andrew Rhodes Divisional Chair, Women’s, Children’s and Critical Care

Sharon Welby Project Manager / Deputy Director of Estates

Kevin Harbottle Assistant Director of Finance

Anne Palmer Senior User / Head of nursing for Adult Critical Care

Dr Andrew Rhodes Senior User / Divisional Director of Adult Critical Care

Dr Mark Hamilton Senior User / Clinical Director of Adult Critical Care

Jennifer Owen Senior User/ General Manager Critical Care

The detailed Programme for the development is dependent on the preferred option and dates may change as a result, however indicative milestones for delivery are as follows:

Table 5 Key Programme Milestones

Milestone Date

Preparation of Strategic Outline Case July – August 2014

Detailed Design complete August 2014

Strategic Outline Case & Outline Business Case Trust Board Approval

November 2014

Financial Plan complete November 2014

Strategic Outline Case & Outline Business Case to NTDA December 2014

Full Business Case submission to Trust Board February 2015

Full Business Case to NTDA March 2015

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Full Business Case Approval (internal & external) end of May 2015

Construction commences June 2015

Handover July 2016

Trust Commissioning Period August 2016

Trust Operational September 2016

1.7 Recommendation

We recommend that the Trust Board is recommended to approve this outline business case in order that the associated full business cases can be completed.

Signed:.........................................

Date: .............................................

Senior Responsible Owner

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2. The Strategic Case

2.1 Introduction

This Outline Business case (OBC) is for the development of additional beds for Adult Critical Care to address the current Estate and capacity challenges and to meet the future demands of the service. This business case outlines, in this Section, the additional capacity required to meet the projected demands on adult critical care over the next 5 - 10 years. This business case will focus on identifying an option that offers a timely solution to address current demand and associated issues with the intention of also developing a future proof solution that will meet future demand over 5 - 10 years. The Trust estate strategy and current capital programme acknowledge the requirement of additional beds and is incorporated within associated planning processes.

2.2 Structure and content of the document

The OBC has been produced in accordance with the principles of the Five Case Model, as set out in DH guidance and HM Treasury Green Book. This SOC and the subsequent business case process combine to fulfil the five case model, which is defined as follows:

Strategic Case; this describes the strategic context and the case for change, together with the supporting investment objectives for the project.

Economic Case: this demonstrates that the organisation has selected a preferred way forward, which best meets the existing and future needs of the service and is likely to optimise value for money (VFM).

Commercial Case: this describes the planned procurement methodology.

Financial Case: this assesses the funding arrangements and affordability and the impact on the Trust’s balance sheet.

Management Case: this demonstrates that the project is achievable and can be delivered successfully in accordance with accepted best practice.

This document represents the first step in any proposal that involves major capital investment and aims to set the strategic need, the context of the case for change and to elicit the support of all associated stakeholders.

The following is the proposed route for document review, challenge and approval.

Table 6 Programme for OBC Approval

OBC Programme for Approval Date

Circulate document Late October 2014

Present document to FRAG W/C November 2014

Present document to BCAG W/C 10 November 2014

Present document to the Trust Executive Team W/C 10 November 2014

Papers ready for Trust Board 20 November 2014

Present document to the Trust Board 27 November 2014

Present document to the NTDA December 2014

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Part A: Strategic Context

2.3 Introduction

The strategic context provides an overview of the context in which the Trust provides its services and the strategic guiding principles, directives and policies that ensure clinical qualities standards are met. The intention is to provide an overview of the Trust, its strategic objectives and the highlight current critical care service delivery and set the context for this business case. It also provides an overview of the driving policies and guidance documents at National, Regional and Local level.

2.4 Organisation Overview

St George’s Healthcare NHS Trust

St George’s is one of the country’s leading teaching hospitals with a proud history dating back to 1733. The trust is situated in south west London, having moved between 1976 and 1980 from central London to establish itself as the specialist centre for south west London, Surrey and beyond. The trust now provides community services to the people of Wandsworth, district general services to a core population of 561561 thousand inhabitants, and tertiary services to 3.4M people. To deliver care to such large populations the trust employs 7,775 people, and has 1,052 beds and 29 operating theatres.

In 2010 St. George’s was designated both a major trauma centre and a hyper acute stroke unit (both one of only four in London), the same year that it took over the Community Services Division of Wandsworth PCT to become a truly integrated provider, and opened the helipad in April 2014. These events marked an important stage in the development of the trust, and represent the culmination of a journey begun in 2005 to define the role of the trust and the services it wished to develop and deliver. The trust now has specialist cardiovascular, neuroscience and paediatric surgery and medicine as part of its portfolio of services, as well as renal transplantation and cancer services.

Quality and patient outcomes match St George’s distinguished history and the clinical quality of services at St George’s is highlighted in major national audits.1 The trust has challenges to ensure its offering to patients is consistently excellent, the trust will meet the challenges of improving the patient experience head on. Alongside the quality of the services offered, St. George’s has strived to consistently improve its performance against national targets and in 2012/13 met both A&E, cancer and admitted and non-admitted 18 week targets. Infection control remains a challenge, however, as do mixed sex accommodation requirements, and the trust continues to seek ways to improve its performance against these key indicators.

St. George’s continues to work hard to ensure that its performance as a trust meets or exceeds all key performance indicators, as set nationally, or in local agreements. The trust is proud of its performance, but is not complacent, recognising the challenge the organisation has during financial year 2013-14, on an on-going basis, to meet the range of targets that it is required to perform against, particularly where specific issues exist, for example in meeting the A&E target. This section will look at both the trust’s achievement against key national waiting time targets and also against a range of quality indicators.

1 MINAP, VSGBI, Sentinel references

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St. George’s also has a fundamental role to play, in the delivery of a vibrant research, education and academic agenda, in partnership with St. George’s University of London and King’s Health Partners.

This work both informs the health care that the trust delivers today and supports the development of the workforce and the technologies and treatments needed for the health systems of tomorrow.

The trust is well supported by commissioners, GPs and referring hospitals. It has an appropriate population base of 3.4m to sustain the range of services provided. This will be enhanced by the predicted population growth, based on the 2011 census, incremental service changes, and formal service reviews and service reconfigurations

Adding together these different elements of the Trust’s profile the ‘whole’ of St George’s is even greater than the sum of its parts. The organisation is a modern, integrated teaching provider with the staff, services, facilities, population base, track record for quality, patient safety and relationships with both commissioners and referrers to take the step up to becoming an NHS Foundation Trust.

St George’s Key Facts and Figures 2

St. George’s is a vibrant, multi-faceted and successful organisation. The following is not an

exhaustive list, but gives a flavour of the trust, its size, activity, quality and services.

In 2013/14 the trust saw 641,569 outpatients, delivered 5,056 babies, undertook 43,183 elective inpatient and daycase procedures, had 131,071 attend A&E, and admitted 43,537 non-elective patients.

The trust is the major centre for tertiary services, including cardiovascular, neurosciences, renal, cancer, and specialised children’s services for south west London and Surrey

It is one of four Major Trauma Centres in London, and received 1,860 trauma calls in 2013/14

The trust is a designated Heart Attack Centre, and was the first trust in London to provide primary angioplasty services 24 hours a day

The trust is a designated large Hyper Acute Stroke Unit (HASU), providing an extremely high quality service, and received over 2,000 stroke patients in 2013/14

It offers a comprehensive range of services, including delivery of community services for the people of Wandsworth following the 2010 integration between the trust and Community Services Wandsworth

The trust co-located with, and a partner of, SGUL, in Tooting in the London Borough of Wandsworth

St George’s is one of only 14 trusts nationally to have fewer than expected deaths under both the SHMI and HMSR methodologies

It had a turnover of £665M in 2013/14, on which it delivered a £4.7M surplus.

Locations & Services

St. George’s is a multi-layered organisation, providing community services to the people of Wandsworth, a range of local acute services to the people of Wandsworth, Merton, and Lambeth and tertiary care to the six boroughs of south west London, the county of Surrey, and

2 St George’s NHS Integrated Business Plan December 2013

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beyond. This offers the trust unique opportunities to lead and develop, in partnership with colleagues in primary, community and other acute trusts, care pathways that best utilise the skills, facilities and expertise of the whole sector.

The hospital is co-located with St George’s University of London, which provides unique opportunities for the Trust to make the most of its tri-partite mission of service, education and research.

As with all major tertiary providers, there remains the requirement to deliver the full range of health services that the local population expects from its local hospital. St. George’s Hospital is located in Tooting, a diverse, multi-ethnic and multicultural community in the London Borough of Wandsworth. As well as being ethnically and culturally diverse, the population of Wandsworth also reflects a full range of socio-economic groups with differing health needs and demands.

St. George’s core local catchment population is 561,7903 from 44 electoral wards in Wandsworth, Merton and Lambeth. This population can be characterised by the following key characteristics4:

A comparatively young age profile

An ethnically and culturally diverse population, with large black and Asian minority communities

A highly mobile population with high turnover in the local population

Relative affluence compared to London as a whole and nationally, though this masks wide inequalities within the boroughs, which have pockets of very high deprivation

The challenge to St. George’s is to deliver high quality care that meets and exceeds the requirements, aspirations and expectations of these different groups.

3 2011 census data on Wandsworth, Merton and Lambeth wards

4 Population characteristics derived from ONS data sources 2009 - 2011

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Organisational Structure

The Trust is divided into 4 Clinical Divisions, supported by the corporate departments and governed by the Board of Directors.

The divisions are as follows:

Children and Women; Diagnostics; Therapeutics and Critical Care

Community Services

Surgery; Theatres; Neurosciences and Cancer

Medicine and Cardiovascular

The Corporate departments are:

Operations

IT

Estate & Facilities

Finance

Corporate Affairs (includes Communications)

Strategic Development

Human Resources

Nursing & Patient Safety

Services

The Trust provides a wide range of services summarised in the following table:

Table 7 Trust Services

Clinical Services

St Georges Healthcare plays a pivotal role in providing tertiary specialist services to South West London and South East England. Many of these specialist services are provided as part of clinical networks for which the Trust acts as the clinical hub. The Trust is one of four major trauma centres, one of nine cardiac arrest centres and one of eight hyper acute stroke units in London.

The local hospital services at St George’s Hospital cover the catchment population of Wandsworth, Merton and the South West of Lambeth, providing the full range of medical, surgical and diagnostic services as well as maternity and children’s services.

At Queen Mary’s Hospital in Roehampton the Trust is the largest provider of rehabilitation services for older people, amputees and people with neurological conditions. There is a minor injuries unit and through partnership with other providers, a wide range of outpatient, ambulatory and day case services.

St George’s Healthcare provision of community services includes community & specialist nursing, health visiting, therapies and school nursing. These services are provided from a range of sites across Wandsworth. The Trust also provides health services to Wandsworth Prison.

Training and Education

As well as providing clinical services, the Trust is a major provider of training and education for all health professionals, including doctors, nurses, therapists, radiographers, pharmacists and

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biomedical scientists. St Georges Healthcare is a lead provider for postgraduate medical, nursing and Allied Health Professional training for many specialties.

Research

The Trust plays a key role in healthcare research with many Trust staff actively involved in undertaking research studies to enhance knowledge and improve clinical services. There are numerous joint appointments with St George’s, University of London and the Joint Faculty of Health and Social Care Sciences with Kingston University

Clinical Strategy 2012-2022

St George’s Hospital’s Clinical Strategy outlines the clinical service aims of the Trust for the next 10 years. This clinical strategy is supported by a set of enabling strategies. Some examples of these enabling strategies are:

A quality improvement strategy

An Estates strategy

A research strategy

An education strategy

A workforce strategy

The clinical strategy highlights that a key strength of the Trust is the vast range of acute and specialist services delivered from the Tooting Hospital campus. This results in a wealth of clinical expertise together on one site.

The crux of the clinical strategy is to expand and develop the key specialist services; examples such as a helipad which will require fast access to critical care services and services models which will enable integrated patient flows. To ensure the best outcomes and support the delivery of this strategy, the Trust needs to have a critical care service that can provide the appropriate capacity and level of care to embrace these changes.

The trust’s tertiary services treat the most complex injuries and illnesses. Many specialist services are provided as part of clinical networks for which the trust acts as the clinical hub, for example, the trust is the inpatient centre for paediatric, ear, nose and throat, plastics and maxillo-facial surgery for south west London.

10 Year Strategy

At the end of 2012 St George's Healthcare launched a new 10 year strategy for the trust following nearly a year of development with our staff and partners. We have developed this strategy to ensure that we deliver:

Better health outcomes for all

Improved patient access and experience

Empowered, engaged and well-supported staff

Inclusive leadership at all levels

The 10 year strategy sets out a compelling vision for the future, built around delivering healthcare of exceptional quality underpinned by leading edge research and teaching. The success of this strategy will be determined by the strength of our partnerships with our colleagues in the healthcare, social services and the voluntary and charity sectors.

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Existing Business Strategies

St George’s Healthcare Trust is focused on becoming a successful Foundation Trust (FT) that is internationally recognised for placing quality, safety and innovation at the centre of its service provision. The application was made in December 2013 and the Trust hopes to achieve Foundation Trust status later in 2014.

To support its application the Trust has developed its Integrated Business Plan (IBP) which looks forward to the coming five years and describes how far the Trust will have progressed on the road to delivering its 10 year strategy. The IBP works to a five year time-frame and therefore runs in parallel with the aspirations of this OBC. The clear expectation is that by 2018/19, the Trust will, have made significant progress towards delivering this vision. The reconfiguration and expansion of critical care services is supported by and essential to the IBP.

Financial and Funding Arrangements

Key to the delivery of an ambitious agenda is St. George’s financial strength and viability. Over each of the last 6 years St. George’s has delivered a financial surplus, which includes paying off of the historic debt previously accumulated by the trust. The trust’s ability to invest and develop services as outlined in the strategy is predicated on the continued delivery of financial surpluses. The Long Term Financial Model (LTFM) shows St. George’s improving from a financial risk rating of 3 to 4 over the course of the LTFM, on the basis of a prudent set of assumptions. This means that St. George’s will continue to deliver surpluses of between 1% and 1.5% of turnover up to 2018/19 (the period of the LTFM), which demonstrates the financial sustainability of St. George’s, its ability to invest in its services and estate, and therefore deliver this strategy.

2.5 Trust Strategic Objectives

Each year the Trust sets corporate objectives, identifying the key short term goals necessary in progressing towards its vision of becoming ‘An excellent integrated care provider and a comprehensive specialist centre for South West London, Surrey and beyond with thriving programmes of education and research’.

The Trust’s current corporate objectives are:

Design pathways to keep more people out of hospital

Redesign and reconfigure our local hospital services to provide higher quality care

Consolidate and expand our key specialist services

Provide excellent education and training opportunities for all staff, students and trainees

Drive research and innovation through our clinical services

Improve productivity, the environment and systems to enable excellent care

Develop a highly skilled, motivated and engaged workforce

Each element of the objectives and supporting strategy are performance managed through the Trust Board scorecard, regularly reported to Board through the Integrated Performance Report (IPR).

The Trust believes that becoming a Foundation Trust is a crucial step in achieving its vision of being recognised as an excellent integrated acute and community care provider and a comprehensive specialist health provider for south west London, Surrey and beyond, with thriving programmes of education and research.

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2.6 Trust Mission & Vision Statement

The Trust’s mission is to provide excellent clinical care, education and research to improve the health of the populations we serve.

Trust Vision

The Trust’s 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’.

The six key components of this vision are:

1. Renowned integrated services enabling people to live at home

2. Provide the highest quality local hospital care, in the most effective and efficient way

3. A comprehensive regional hospital with outstanding outcomes

4. Thriving research, innovation and education driving improvements in clinical care

5. A workforce proud to provide excellent care, teaching and research

6. Transformed productivity, environment and systems

Supporting the delivery of the overarching trust vision St. George’s has developed a range of supporting strategies. Quality Improvement, Information, Communications and Technology and Estates are enabling strategies that are critical to delivering the trusts overall vision.

Aligned with this scheme, the Trust set out one of its strategic visions to be a comprehensive regional hospital with outstanding outcomes. Amongst other objectives is the plan to further develop St. George’s role as a major trauma centre (MTC). To support this vision is the clear need to develop and approve plans for the expansion of critical care.

Trust Estate Strategy

The Trust’s Estates Strategy was approved at the January 2013 Trust board and a DCP plan is currently being developed commissioned by the new Director of Estates and Facilities. As part of the Trust’s 10 year strategy developments including the Children’s & Women’s Hospital in Lanesborough Wing, improved facilities for cancer, renal, maternity, trauma and critical care services are all part of trusts future.

Plan: In 2014/15 Complete ward bed capacity plans Complete hybrid theatre build Completed Neonatal Unit additional bed capacity MRI update Over the next 5 years St George’s estate will need to change and is likely to have the following features5: Increased number of inpatient beds Fewer outpatient clinics on the Tooting site Enhanced, better utilised community facilities

5 St George’s Healthcare NHS Trust: Divisional Strategy Review Estates 7 facilities 2014-15

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Improved facilities for children, women, renal, cancer and trauma More critical care capacity A coherent approach to the use of space in association with St George's University of

London A rationalised estate with fewer peripheral buildings on the Tooting campus Benefits from commercial developments such as greater provision for private patients.

2.7 Strategic Context - National, Regional and Local Influences

The strategic context provides an overview of the context in which the Trust provides its services and the strategic guiding principles, directives and policies that influence best practice in clinical standards. It provides an overview of the driving policies and guidance documents at National, Regional and Local level that can provide context and support the case for change in relation to increasing capacity and providing modern accessible critical care services. These influences are summarised is the table below and in each case are the latest written document available. A more detailed summary with references can be found in Appendix 1.

Table 8 Strategic Context Summary

NATIONAL

Health and Social Care act 2012 The government’s Health and Social Care Bill outlines the future commissioning arrangements across the NHS

Standards for Intensive Care Units – The Intensive Care Society 2007

A guidance document to improve patient care by bringing together in one source all aspects related to the design of an intensive care unit. The document presents the minimal standards required for an intensive care unit, both for the care of patients and training of staff.

Department of Health (2000) Comprehensive Critical Care A Review of Adult Critical Care

This Department of Health guideline document sets out key recommendations relating to critical care service provision. The focus is to provide a service that considers the needs of patients and how they can be met through partnership between professions and specialties.

Royal College of Surgeons (2011); Emergency Surgery: Standards for unscheduled care

The Royal College of Surgeons published a report in February 2011 outlining the standards for the care of unscheduled adult and paediatric surgical patients.

National Institute for Health and Clinical Excellence (CG50) - Acutely ill patients in hospital -Recognition of and response to acute illness in adults in hospital (2007)

The National Institute for Health and Clinical Excellence (NICE) published clinical guideline 50, in July 2007, outlining the clinical guidelines for the care of adult patients in acute hospital settings.

The National Institute for Health and Clinical Excellence (NICE) Clinical Guideline 83 2009

The National Institute for Health and Clinical Excellence NICE published clinical guideline 83, in March 2009. This guideline offers best practice advice and recommendations on the care of adults with rehabilitation needs as a result of a period of critical illness that required inpatient treatment in critical care.

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NATIONAL

Developing Operational Delivery Networks – The way forward – Dec 2012

The NHS Commissioning Board has outlined plans to implement Operational Delivery Networks (OPN) across the NHS to cover areas such as neonatal intensive care, adult critical care, burns and trauma. These networks are focused on coordinating patient pathways between providers over a wide area to ensure access to specialist support.

HBN 04-02: NHS Estates guidance for the built environment for Intensive Care (2013)

HBN 04-02 provides guidance on design considerations for the built environment in critical care areas. These areas include designated intensive care units, high-dependency units and other hospital locations where critically ill patients are cared for, as well as the support facilities that underpin these areas.

Quality, Innovation, Productivity and Prevention (QIPP)

QIPP is a large-scale transformational program for the NHS. It involves all NHS staff, clinicians, patients and the voluntary sector. The purpose is to improve the quality of care the NHS delivers and deliver £20billion of efficiency savings by 2014-15, which will then be reinvested into frontline care. The QIPP aims are:

1. To reduce cost by improving effectiveness and consistency in processes & decision-making.

2. To improve quality and effectiveness by establishing clearer clinical outcomes

3. To improve patient experience and engagement by establishing responsibilities and responsiveness to individual patient needs

REGIONAL/LOCAL

London Health Programmes

Adult emergency Services: Acute medicine and Emergency General Surgery commissioning standards: September 2011

The commissioning standards have been developed to ensure on-going improvements in critical care service provision. These standards represent the minimum quality of care that patients should expect to receive if admitted as an emergency case to a hospital in London.

Draft Clinical Quality Standards - Critical Care Services: October 2012

London Health Programmes have published a renewed Clinical Quality Standards that relate to critical care

Adult Critical Care Service

Specification for critical services

NHS England

The national commissioning standards have been

developed to ensure on-going improvements in critical

care service provision

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2.8 Site ownership and Site Constraints

The St Georges Hospital Site

The hospital site is illustrated below in Figure 2A, highlighting the site buildings and potential site restriction for expansions.

Figure 2A Aerial View of Hospital

Site Ownership

The land in the ownership of the Trust is the area 44,660.04sqm.

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Figure 2B Current Site Plan

Site Specific Constraints

The St Georges Hospital site presents specific challenges from an estate management viewpoint. The Trust site is heavily occupied, making it difficult to identify appropriate space for future capital developments. This impacts on capital development plans as follows:

There is limited available space to meet service adjacency requirements when increased capacity is needed

Often solutions require capital works adjacent to current service provision. This will need to be carried out while the service remains operational with minimal disruption

Background to the Redevelopment Requirement for Adult Critical Care

Over the last five years there has been growing concern within the Adult Critical Care Directorate that the demands placed on the service would exceed the capacity. The initial indication of this problem was an increase in the number of refused requests for intensive care over the winter months. In July 2009 an initial business case was developed to investigate the options available to provide a solution to the increase in demand. At the time further analysis on demand projection was required.

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The Trust has undertaken demand forecasting to understand the 10 year projected demand considering, national, sector and service specific developments. The graph below outlines the conclusion of this predicted increases over the next 10 years.

Demand analysis work outlined has been initiated in order to address the on-going need for increased capacity and requirement for critical care service to be compliant with national, Regional and Local standards to provide a safe and accessible service that enhances the Trust’ performance plans.

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

CCMDS Out Turn 21395 22122 22875 23652 24457 25288 26148 27037 27956 28907

+ 3 % 22037 23447 24925 26474 28097 29796 31576 33439 35388 37429

- 3 % 20753 20798 20824 20830 20816 20780 20720 20635 20524 20384

0

5000

10000

15000

20000

25000

30000

35000

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Demand Forecast Adult Critical Care - Activity Out Turn Estimate CCMDS Bed Days

CCMDS Out Turn

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Part B - The Case for Change

2.9 Introduction

The purpose of this section of the business case is to outline the strategic case for change.

Critical care has a key role to play in delivering secondary and tertiary care. The increasing complexity of care and the demands within the Trust makes the need for addressing the current need for change within Critical Care vital.

The demand for Adult Critical Care at St George’s has increased by 13% over the past 3 years; and 27% over the last 5 years. The Directorate has absorbed this demand through an increasing occupancy level and increase in bed numbers. The Directorate currently functions at greater than 90% occupancy during winter months, to deliver this level of activity.

The expected national growth in demand for adult critical care is 50% over the next 10 years; which equates to 3-4% per year. The demand analysis performed within the trust, based on local factors and accounting for these national assumptions requires an additional 13 beds over the next 5 years. The lack of adult critical care capacity will ultimately compromise the Trust’s ability to meet four essential performance targets; patient safety, the 18 week pathway (cancelling elective surgery or patients not referred to critical care), the A&E four hour target and financial viability (additional critical care capacity underpins many of the Trust’s on going and future service development plans). Capacity shortfall is managed by a number of operational mechanisms, which include cancellation and postponement of electives procedures, and the provision of additional capacity in satellite units.

Adult critical care is not able to support delivery of any additional activity due to the lack of capacity; therefore there is a risk of compromise to:

Delivery of evidence based best practice for patient care;

Patient safety

Enhancing efficiencies

Undertaking leading specialist research.

To date significant activity increases have been operationally managed with minimal capital investment. The General Intensive Care Unit is over 25 years old and highlights no longer complies with the HBN04-02 recommendations. This non-compliance is on the Trust Risk register recorded as individual risks which have a score that ranges between 9 and 20 (moderate to high risk). Should the unit be updated to comply with all the current HBN04-02 recommendations, the unit would lose the equivalent of 4 beds for its current footprint and incur material capital spend.

In summary the case for change is based on two factors, the first being the lack of the necessary capacity to deliver the Trusts Clinical Strategy and second is the upgrading of the current capacity in line with the updated building guidance. Critical Care at St George’s Healthcare NHS Trust has a key role to play in delivering patient care pathways. The increasing number and complexity of patients within the Trust requiring this level of care creates the urgency of addressing the current need for change.

2.10 Investment Objectives

The investment objectives for this OBC are described as follows:

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Table 9 Investment Objectives

Project Objective Key Deliverables / Proposed Scope

Link with Strategy

To implement a design/build solution that delivers 13 additional beds in order to meet anticipated capacity until 2019/20

13 additional beds by 2019/20

Trust Strategy

IBP

To eliminate any further additional cost of delivering Critical Care in inefficient satellite areas by removing the satellite unit and linking it with a larger unit

Improved efficiency – cost per bed is reduced

QIPP

CRP

To ensure 100% of all new critical care beds are compliant with NHS building guidance standards (HBN 04-02:Critical care Units)

New beds meet NHS building guiding standards

Critical Care Standards

To ensure annual occupancy levels remain below 90% to optimise planned/unplanned admissions

Reduced ‘on the day’ cancellations, as a result of critical care capacity, to 0%

QIPP

Critical Care Standards

SIP

To provide an environment that is in line with best practice infection prevention standards

Address environmental contamination issues

Introduce positive / negative pressure isolation rooms

Corporate risk register

To provide sufficient space for staff education, clinical and non-clinical administration and management and storage

Reduced staff vacancy and improved retention

Staff satisfaction survey

Audit

Existing Arrangements

Adult Critical Care at St George’s is composed of three main units; and one satellite unit: A neurosurgical Intensive Care (NICU, 14 beds), A Cardio-thoracic Intensive Care (CTICU, 15 beds and 3 beds on the shared Coronary Care Unit and is linked to the current CTICU unit), a General Intensive Care (GICU 18 beds), plus a General ICU satellite unit (3 beds).

GICU is located on the first floor of St James Wing, CTICU and NICU are located on the first and second floors respectively of the Atkinson Morley Wing. GICU takes the majority of non-neurosurgical and non-cardiac emergency admissions, and the majority of the major surgical elective workload. NICU receive local and regional secondary and tertiary, planned and emergency cases. The three units work under the structure of a single directorate with three care groups. This provides the flexibility to manage demand surges, ability to exchange clinical expertise and practice and other economies of scale. This cooperation and flexibility has been responsible for managing the impact of the lack of capacity within critical care.

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The current location of Critical Care beds across the Trust is summarised below:

Table 10 Critical Care Beds

Name Service Location Capacity

General Intensive Care Unit

Adult Critical Care and major elective care post operative care patients

St James’ Wing

Level 1 18 Beds

General ICU Satellite unit

Elective post operative care St James’ Wing

Level 5 3 beds

Cardiothoracic Intensive Care Unit

Cardiothoracic Intensive Care Atkinson Morley Wing

Level 1 15 Beds

Coronary Care Shared space Atkinson Morley Wing

Level 1 3 beds

Neurosurgical Intensive Care Unit

Neurosurgical Intensive Care Atkinson Morley

Level 2 14 Beds

2.11 Background to the Redevelopment Requirement for Adult Critical Care

In order to meet the year on year increase in demand, this increase in activity has been operationally managed with no capital investment.

Activity has increased in all three units, however the facilities in the Atkinson Morley Wing (Neuro ICU and Cardio Thoracic ICU) are much newer that then the General ICU comply with current building regulation and infection control guidance whereas the General UCU does not.

GICU currently manages a significant number of immunosuppressed patients, in particular, neutropenic patients. These patients are especially vulnerable to opportunistic and nosocomial infections and as such, should be managed in positive pressure, isolation rooms, which are equipped with antechambers. GICU currently has no such rooms. As a result, we are putting our patients' lives at risk. As haematology and oncology services continue to expand, the numbers of such patients will continue to increase. Thus there is a pressing imperative to build these facilities within the confines of GICU. In addition, GICU also needs negative pressure isolation rooms to manage the increasing number of patients that have complex, multi-resistant infections.

Within the directorate there are, 6 such rooms on CTICU and 2 on Neuro ICU. However, these are in near constant use due to current levels of patient demand. In addition, only 2 of these rooms have HEPA filtration and therefore meet the operation requirements of a negative pressure facility.

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2.12 Business Needs

This section provides a detailed account of the problems, difficulties and service gaps associated with the existing arrangements in relation to future needs.

2.12.1 Key Drivers for Change

The project objectives identify the following as key drivers for change:

The increasing demand for ICU services is greater than the current capacity can provide. Future demand projections identify around an 18% increase by 2019

Changes in the local and national demographics combined with the Trust’s plan to remain a Trauma and emergency care centre is impacting on increased GICU demand

2.12.2 Capacity and Demand

The Trust is now in the position where lack of capacity impacts the Trust business and activity on a daily basis. Activity in the three units has increased over the last 5 years by 27%. This has been absorbed through reduced length of stay (LOS), reduced Delayed Transfers of Care (DTOC) and ultimately increased occupancy levels. The increased occupancy levels have had the knock on effect of increasing the number of refused referrals. Further increases in demand will further impact the refused elective referrals, which will result in cancelled elective surgical cases or a sub-optimal post-operative patient pathway and thus and increased length of stay in the hospital.

Table 11 Activity increase over 5 years (activity in CCMDS bed days)

SGH Specialty Description 2009-10 2010-11 2011-12 2012-13 2013-14

NICU 4509 5055 5265 5440 5453

CTICU 4864 5163 5805 6537 6854

GICU 6552 6739 6861 7034 7841

Total 15925 16957 17931 19011 20148

Annual % increase 6.5 5.7 6.0 6.0

This demand is comprised of a number of key drivers that include:

Local demographic factors:

Changing age distribution and size of the population

Increasing co-morbid disease burden of the population

Increased prevalence of diseases such as diabetes, obesity, and alcohol related disorders.

These factors compound to give an estimated increase in demand for critical care of around 18% by 2019.

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2.12.3 In-Year Demand Increases Based on Service Level Agreement Proposals

As a support service to numerous patient pathways, the increased demand for ICU capacity in 2014-15 is to a significant extent based upon the increased activity expectation of the Trust’s elective and emergency work. This can be isolated into a number of discreet areas.

A number of key service developments have taken place over recent years that have impacted on the demand for critical care services.

The Helipad

Cardiac surgery

Hyper Acute Stroke Unit

Out of Hospital Cardiac Arrests

Neurosurgical growth

Complex cancer

2.12.4 Off-site Activity

This lack of critical care capacity has already led to some specialities taking some of their elective surgical work to the private sector to ensure the work is done. Re-locating this work to St George’s Hospital will have an impact on the demand on adult critical care.

Relocation of the Bariatric Surgical Activity from the Private Sector

Currently the surgical division perform most of the bariatric surgery off-site. In 2013-14 128 cases and 64 midnight bed days were delivered off-site at St Anthony’s Hospital.

Relocation of the Cardiac Surgical Activity from the Private Sector

Currently cardiac surgery performs a number of cases in the private sector each year. In 2013-14 there were 108 cases with 160 midnight bed days. Then planned activity for 2014-15 is 145 cases equating to 215 midnight bed days. Relocation of this work will be a step change in activity, when it happens, but is note solely dependent on ICU capacity.

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2.12.5 Total Activity Growth – Admissions and CCMDS bed days

The tables below detail the projected growth over the next 5-10 years.

Table 12 Projected Activity

To deliver this activity the Trust is projected to require 66 beds in 2020.

2.13 Quality of Care

In order to provide the level of high quality critical care that is expected of a tertiary referral Trust, it is essential for the Trust to ensure that its critical care service is designed to accommodate the care needs of the critically ill patient, their relatives, carers and staff. The Trust strives to ensure that patients and service users are at the heart of everything it does, and that it provides them with the highest quality services. This theme of quality improvement underpins the whole of the Trust’s strategy.

The trust uses the national definition of quality, which is divided into the following three domains:

Patient safety – quality care is care which is delivered so as to reduce or eliminate all avoidable harm and risk to the individual’s safety

Patient experience – quality care is care which looks to give the individual as positive an experience of receiving and recovering from care as possible.

Patient outcomes (clinical effectiveness) – quality care is care which is delivered according to best evidence as to what is clinically effective in improving an individual’s health outcomes.

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

CCMDS Out Turn 21395 22122 22875 23652 24457 25288 26148 27037 27956 28907

+ 3 % 22037 23447 24925 26474 28097 29796 31576 33439 35388 37429

- 3 % 20753 20798 20824 20830 20816 20780 20720 20635 20524 20384

0

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Demand Forecast Adult Critical Care - Activity Out Turn Estimate CCMDS Bed Days

CCMDS Out Turn

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Beds required 54 56 58 60 62 64 66 68 70 73

- 3 % 52 52 52 52 52 52 52 52 52 51

+ 3 % 55 59 63 67 71 75 79 84 89 94

0

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Demand ForecastAdult Critical Care - Beds Required

Beds required

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These are affecting the quality of care provided and will be considered within the 3 domains:

Patient Safety

Quality care is care which is delivered so as to reduce or eliminate all avoidable harm and risk to the individual’s safety

All of the critical care units currently provide an excellent level of clinical care for patients, as demonstrated by their respective national quarterly reports (provided by Intensive Care Audit and Research Centre, ICNARC).

It is important to highlight that when demand exceeds capacity the final action is to refuse ICU referrals for care of planned surgical cases. This is the only, means of controlling demand on the service. When this occurs there are two possible patient pathways. The first is that the elective operation is postponed; the second is that the operation proceeds and the patent does not have a post-operative ICU stay. Both of these scenarios have adverse effects on patient safety. This has been the topic of a publication by The Royal College of Surgeons, who identified that sub-optimal post operative care results in an increase in post operative morbidity, mortality and length of hospital stay. Furthermore, it creates an addition demand on critical care when these patients require “preventable” emergency post operative admission to ICU - which has a longer ICU length of stay than the pre-emptive / elective post-op admission. 6.

The Directorate has, and continues, to strive to improve its efficiency through the measures relating to length of stay and delayed transfers of care. This information is collated and nationally bench marked by the ICNARC. ICNARC reports that all 3 units have significantly shorter ICU lengths of stay than the national bench mark and achieves this whilst maintaining expected levels of related quality of care, specially, early re-admission rates. Accordingly, it is unrealistic to achieve any further increases in ICU capacity through improvements in efficiency.

To ensure that the Trust’s clinical strategy and vision are achieved it is essential that there is sufficient capacity to provide access to care for all those who need it, in a timely fashion;

There are also a number of environmental issues that have been raised and are on the Trust’s risk register. The GICU unit experience recurrent environmental contamination with multi-resistant bacteria. In addition to this the unit has no positive / negative pressure isolation rooms and is therefore compromising infection control standards. The severity of these risks is listed on the risk register and scores range from 9-20. Redevelopment of the GICU unit to ensure key standards for infection control will significantly address this issue.

Patient Experience

Quality care is care which looks to give the individual as positive an experience of receiving and recovering from care as possible.

The Trust requires additional capacity in modern facilities and physical condition to be compliant with NHS health building guidance. If this cannot be provided the Trust runs the risk of delivering care in a suboptimal environment for patients, compromising both patient safety and experience.

A new development that is compliant with the current standards of critical care environments, and capacity requirements, would ensure the delivery of high standards of quality care,

6 NCEPOD, Royal College of Surgeons (2011)

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accommodating level 2 and level 3 patients. This development would also ensure the following is provided:

Adequate space and layout to meet capacity demands

Privacy and dignity

Infection control requirements (provision of adequate positive/negative isolation rooms)

Temperature control

Sanitary requirements

Access to family support services

Access to adequate clinical support services e.g. storage and utility spaces

At present the limited space available on the unit means that there is no dedicated relative or interview room. As such, staff have limited options to impart difficult news to patients’ families in a private and dignified manner. This is often attended to in either the seminar room or one of the staff offices, depending on availability. In a unit that has such a high number of critically ill patients the demand for a dedicated space to counsel concerned relatives and friends is paramount in terms of patient experience.

Patient outcomes (clinical effectiveness)

Quality care is care which is delivered according to best evidence as to what is clinically effective in improving an individual’s health outcomes.

The Standardised Mortality Ratio (SMR) is a key quality metric for critical care patients. GICU is one of the busiest in the country and consistently maintains an SMR within the expected range. (refer to Table 13 below).

Table 13 Standardised Mortality Ratios for GICU for the last 4 audited quarters

2013 Q3

2013 Q4

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2014 Q1

2014 Q2

External scrutiny re-assures the Trust of the clinical effectiveness of this unit.

The use of small and remote satellite units has a significant adverse impact on the staffing costs. To ensure the safety of more critically ill patients the levels of staffing are significantly increased; sometimes up to twice the level of the main units.

The efficiencies of scale and group experience and knowledge are lost which has a considerable adverse effect on cost effectiveness. In order to ensure that clinical effectiveness is not compromised by the severity of the patients’ conditions a financial burden is endured. To ensure that this domain of quality is improved, the redevelopment must address these issues.

If the Trust wishes to retain standards such as that consistently reflected by the SMR data is essential that environmental and capacity issues are addressed.

Therefore in summary the extension and refurbishment to the existing critical care facilities would allow the Trust to meet the current demand and capitalise upon the options to develop new services. Provision of an additional 13 beds through this programme would create a facility that is modern and in line with Health Building guidance (HBN 04-02), the NHS Estates guidance for the built environment for intensive care areas, which is essential in achieving other standards and efficiencies in patient pathways, clinical synergies & quality of critical care service delivery as well as efficiencies in bed management.

2.14 Potential Business Scope & Key Service Requirements

The scope of this project is to provide a safe, efficient and effective service to the local (and wider) health community/economy on the St Georges Hospital site.

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Table 14 Potential business Scope and Key Service Requirements

Item Core Desirable

Potential Business Scope

Sufficient capacity to maintain bed occupancy to < 90% over the year

Additional beds compliant with HTM/HBN/ADB standards of care

Infection prevention environment

4 additional positive / negative pressure isolation rooms with HEPA filtration

Sufficient capacity to maintain bed occupancy to < 85% over the year

All beds compliant with Level 3 standards of care

Co-located management administration, education and storage

Key Service requirements

13 additional beds

18 beds compliant with HTM/HBN standards of care on GICU AND 4 additional beds on Neuro ICU

4 additional Isolation rooms compliant with HTM 03-01 Specialised Ventilation for Health Care

Appropriate friends and relatives facilities

Seminar room

Staff rooms

Changing rooms

63 beds compliant with level 3 standards of care

Co-located Management Administration

Co-located Practice Education Officer

Co-located head of nursing office

2.15 Main Benefits Criteria

This section describes the main outcomes and benefits associated with the implementation of the potential scope in relation to business needs. This investment will deliver the following high-level strategic and operational benefits. Benefits are expressed as follows:

Table 15 Investment Objectives and Benefits

Investment objectives Main benefits criteria by stakeholder group

To implement a design/build solution that delivers 13 additional beds in order to meet current capacity and those until 2020

Provides enough capacity to meet demand, over the next 5 years

Patients

Referring services

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Investment objectives Main benefits criteria by stakeholder group

To eliminate any additional or further future cost of delivering Critical Care in inefficient satellite areas

Reduces costs and releases money for enhanced clinical care delivery

Trust

Wider health economy

Commissioners

To ensure 100% of all new critical care beds are compliant with NHS building guidance standards (HBN 04-02)

Environment and facilities are enhanced to partially meet the requirements of modern critical care delivery

Patients

Clinical Staff

To ensure annual occupancy levels remain below 90% to optimise planned/unplanned admissions

The Trust is able to meet its 10 year strategy commitment of ‘Improved patient access and experience’

Patients

Emergency departments eg A&E

Trust waiting time targets

To provide an environment that is in line with best practice infection prevention standards

Improved infection prevention within unit

The Trust is able to meet its 10 year strategy

commitment of ‘Better health outcomes for all’

Patients

Trust

2.16 Design Quality and Philosophy

Design Quality

The design will reflect the importance of flexibility, quality and will meet the latest design guidance where appropriate. It will be a contemporary building, respectful of locally sensitive areas. The building will not affect statutory and non-statutory designated sites.

Energy Efficiency

The energy efficiency of the Critical Care Unit has been assessed annually as part of the St James’ Wing as a whole, using HM Gov. Display Energy Certificate (DEC) system. This measures relative energy consumption on a scale from A to G, where A is best. Typical buildings perform around the D/E threshold, set at 100.

The energy efficiency score for the year 2012 (St James Wing) reflects a DEC of E (120). This is an improvement on the previous year where the DEC score was F (146). The preferred option design solution will aim to enhance and improve on overall energy efficiencies, contributing to the NHS sustainability targets of reduce 2007 carbon footprint by 10% by 2015.

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Future Flexibility Consideration of an additional 13 beds will provide opportunity for a solution that is flexible in functionality and capacity and that can provide capacity for current demand whilst enabling realisation of the 10 year capacity requirement.

2.17 Summary

Drivers for Change

The project objectives in this section identify the following as key drivers for change: The increasing demand for ICU services is greater than the current capacity can provide.

Future demand projections identify a significant (>30%) increase over the next 10 years.

Changes in the local and national demographics combined with the Trust’s plan to remain a Trauma and emergency care centre is impacting on increased GICU demand

The Trust requires additional capacity to be compliant with NHS health building guidance.

If this cannot be provided the Trust runs the risk of compromising compliance of other standards of care such as infection control, critical care standards and commissioning standards.

Refused referrals that impact on elective surgery (leading to cancellations) have a

significant impact on the potential income the Trust would receive. The average surgical HRG tariff7 for a patient admitted to critical care is £5,000.

Issues that relate to patient care and safety:

The current GICU have no positive / negative pressure isolation rooms and therefore compromising infection control standards. Building these additional rooms in this space (isolation rooms) would result in the reduction of current bed numbers/spaces due to increase space requirements

Redevelopment and increased bed capacity will provide opportunities for the Trust to fulfil other strategic development programmes e.g. cardio vascular, neurosciences and complex cancer services.

2.18 Main Risks

Risks to the project have been assessed using the Five Case Model as shown below. It will use the work streams established to support the design and development activities to identify all risks and to develop mitigation plans. The Project Board will oversee risk, and all high scoring risks will be included on the Trust Risk Register.

Table 16 Main Risks & Counter Measures

Risk Mitigation

Affordability Risk – the Trust cannot afford the recommended proposals, resulting in abortive cost.

This risk is mitigated by an assessment of affordability as part of the business case process and costs in the business case that will have been

7 St Georges Healthcare NHS Trust Informatics Team

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Risk Mitigation

competitively tendered through the procurement process

Service Disruption – The project impacts negatively on provision of critical care services during implementation significantly affecting patient outcomes and surgical services

This risk is mitigated by an assessment of the programme and developing a project plan that limits disruption. Communication with design and project management team is essential

Programme Risk – the proposal is delayed by other capital development proposals, resulting in abortive cost and failure to meet strategic objectives.

This risk is mitigated by the delivery of the critical care project being programmed by Estate/Capital Directorate

2.19 Constraints

The main constraints affecting the project are:

Budget - the Trust has a limited capital budget, and must seek approval from NTDA and monitor for any expenditure of over £5m of Treasury capital (i.e. excluding funds from donations) and for any associated loans.

Physical - the existing accommodation is heavily occupied, making phasing difficult, and potentially reducing the potential to comply fully with NHS Health Building Notes (HBNs) and Health Technical Memoranda (HTMs).

Timeliness – the hospital will see a year on year increase in demand in the coming years, both in terms of elective surgery demands and emergency admissions and must therefore have options to open additional capacity.

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3. Economic Case

3.1 Introduction

In accordance with Departmental Capital Investment Manuals and requirements of HM Treasury’s Green Book (A Guide to Investment Appraisal in the Public Sector) this section of the SOC documents the range and associated development of options that have been considered in response to the case of need.

3.2 Critical Success Factors

The critical success factors for this project are considered to be:

Strategic fit and business needs How well the option:

Meets the investment objectives

Meets the requirements of the Trust’s Estate Strategy

Meets the Trust’s strategy for Clinical services

Meets the requirement of national and local directives and guidance

Potential Value For Money How well the option delivers value for money by:

Reducing construction risks

Maximising benefits

Optimises the potential return on investment

Potential Achievability How well the option is likely to be delivered:

In view of the Trust’s capability to deliver the project;

In view of the market’s capability to provide and implement innovative solutions;

In such a way as to preserve heritage assets on the site;

In such a way as to minimise disruption to the Trust’s operations during construction.

Potential Affordability How well the option:

Matches the likely availability of funding

Enables the Trust to meet its key financial targets in the medium to long term

3.3 Long List of Options

The long list of options has been generated and considered over an extended period of at least a year, in order that they could be assessed by the clinical and estate teams, to understand their viability. They are described below, identifying whether the option was shortlisted for detailed appraisal, or discounted. The extent to which each option met the project objectives was the key criterion for short listing.

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Table 17 Long Listed Options

Option Description

1 Do Nothing

2

A phased option delivering first an additional four bed spaces 270 sq m on the neuroscience intensive care unit and then a General Intensive Care Unit: roof-top extension on St James’s Wing and internal refurbishment totalling 2,244 sq m – delivering an additional nine new compliant bed spaces, plus an upgrade of 9 existing bed spaces to compliant standard.

3 New Build – the creation of a new two storey building including a shell only on the ground floor providing totalling 2,266 sq m, providing ten additional beds, plus refurbishment of 490 sq m accommodation displaced in Knightsbridge wing.

4 Creation of three, four bedded elective surgical critical care bays on 3 different wards

5 Creation of a six bedded elective surgical critical care unit within part of the endoscopy unit recovery area

6 Conversion of the GICU’s equipment storage facilities and office space into a 3 bedded HDU

3.4 Long List: inclusions and exclusions

The long list has appraised a wide range of possible options. The long list of options has been generated and considered over an extended period of at least a year, in order that they could be assessed by the clinical and estate teams, to understand their viability. A summary of the review of the long listed options is set out below.

Table 18 Results of Review of Long Listed Options

Option Current Discounted/Shortlisted Status

1 Do Nothing Shortlisted - as a baseline comparator

2 A phased option is planned delivering: first an additional four bed spaces on the neuroscience intensive care unit and then a General Intensive Care Unit roof-top extension on St James’s Wing and internal refurbishment totalling 2,244 sq m – delivering an additional nine new compliant bed spaces plus an upgrade of 9 existing bed spaces, to compliant standards.

Shortlisted – will not provide any further inefficient satellite beds therefore increasing capacity and enhance patient safety.

This option meet all the long term objectives for this project and Trust clinical Strategy

3 New Build – the creation of a new two storey building including a shell only on the ground floor providing totalling 2,266 sq m, providing ten additional beds, plus refurbishment of 490 sq m accommodation displaced in Knightsbridge wing.

Shortlisted – This option meets the long term objectives for this project and Trust clinical Strategy. Whilst not co-located to rest of unit, is co-located within itself and of sufficient size to have effective staffing levels

4 Creation of three, four bedded elective surgical critical care bays on 3 different wards.

Discounted – This option does not meet strategic drivers and service standards

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Option Current Discounted/Shortlisted Status

5 Creation of a six bedded elective surgical critical care unit within part of the endoscopy unit recovery area.

Discounted – This option has a significant impact on the Trust’s ability to provide effective endoscopy services

6 Conversion of GICU equipment storage facilities and office space into a 4 bedded HDU.

Discounted – This option compromises essential patient experience standards as it provides no natural light and reduces the provision for an appropriate healing environment

Overall conclusion: scoping options

Table 19 Summary Assessment of Scoping Options

Reference to: Option 2 Option 3

Description of option: Rooftop New Build

Investment objectives

To implement a design/build solution that delivers 13 additional beds by in order to meet current capacity and those until 2018/19

To ensure all critical care are geographically co-located to ensure patient safety and quality of care

To eliminate the additional cost of delivering further Critical Care in inefficient satellite areas

To ensure 100% of all new critical care beds are compliant with NHS building guidance standards (HBN 04-02)

To ensure annual occupancy levels remain below 90% to optimise planned/unplanned admissions

To provide an environment that is in line with best practice infection prevention standards

Critical Success Factors

Business need

Strategic fit

Benefits optimisation

Potential achievability

Supply-side capacity and capability

Potential affordability

Summary Preferred Possible

The table above summarises the assessment of each option against the investment objectives and Critical Success Factors.

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3.4.1 Determining the Capacity

The approach used to determine the capacity requirements for critical care uses three components. The first is the current baseline demand, the second demand based on the SLA proposal for next year (2015-16), and the last part is the expected growth in demand beyond the SLA activity. Section 2 also outlines other potential changes that may have an effect on the demand. The baseline estimate is calculated using the Statistical Process Control methodology applied to the Run Chart with data from the last three years. Section 2.8 outlines the projected capacity and its impact on service delivery.

The graph below illustrates the capacity requirements to maintain 85% occupancy, therefore 66 beds at 85% would provide enough capacity up to 2018/19 whereas 90% occupancy would provide capacity up to end of financial year 2020/21.

Table 20 Capacity Requirement at 85% occupancy

3.5 Short-listed Options The short listing took place in a project team meeting and a non-financial option appraisal agreement at a project meeting in June 2013 and refreshed in early November 2014. The revised options are detailed below: Option 1 Do Nothing: This option was shortlisted to provide a baseline comparator. Option 2 Phased approach to include: Phase 1: Additional 4 beds on Neuro ITU on the terrace Phase 2: Development of 9 beds on rooftop of St James’ Wing adjacent to current GICU

Table 21 Option 2 - Proposed phasing of works

Unit Phase 1 Total Bed Numbers

NICU Q3 15-16 4

GICU Q3 15-16 9

Total 13

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Beds required 57 59 61 63 65 67 70 72 74 77

- 3 % 55 55 55 55 55 55 55 55 55 54

+ 3 % 59 62 66 71 75 79 84 89 94 100

0

20

40

60

80

100

120

Bed

nu

mb

er r

equ

ired

Demand ForecastAdult Critical Care - Beds Required

Beds required

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Appendix 2 highlights the proposed design solution and associated Schedule of Accommodation.

Option 3 New Build – New build located adjacent to Knightsbridge Wing with maximum capacity beds numbers to 10 plus the additional 4 beds on Neuro ITU

Table 22 Option 3 - Proposed phasing of works

Unit Phase 1 Total Beds

NICU Q3 15-16 4

New Build Q3 15-16 10

Total 14

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Figure 3A details the proposed location of Options 2 and Option 3.

Figure 3A Proposed Location of Option 2 and 3

3.6 Economic Appraisal

Introduction

This section provides a detailed overview of the main costs, benefits and risks associated with each of the selected options. Importantly, it indicates how they were identified and the main sources and assumptions. The economic appraisal is summarised at Appendix 3.

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Estimating Benefits

Methodology

The benefits associated with each option were identified by the project team in earlier in the year.

Description, Sources and Assumptions

The benefits identified fell into the following main categories, as shown in Table 24 below. Costs and cash-releasing benefits are included in the economic appraisal, together with qualitative benefits. Qualitative benefits have been assessed using a weighting and scoring process (see Section 3.6 below).

Table 23 Main Benefits

Type Direct to Trust

Qualitative or non-cash releasing

Strategic fit

Supports the National, Regional and local strategies for the provision of critical care services

Indirectly supports the Integrated Business Plan

Deliverability

Planning: complexity and challenges in achieving planning permission

Disruption: minimises disruption and maintains service delivery during the construction

Minimises disruption to surrounding services on the site

Flexibility for future planning

Ability to meet future critical care requirements of the Trust over a 5 year period

Provide flexibility in function and capacity as critical care demands change

Efficiency

Support the principles of sustainable development and minimise impact on the environment

3.7 Options Appraisal: Financial

3.7.1 Capital Costs

Capital costs for Options 2 and 3 have been prepared by the Trust’s cost advisors utilising the OB Cost Forms, which are provided at Appendix 4. These are summarised in the table below. It should be noted that there is no capital expenditure on the Do Nothing Option.

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Table 24 Summary of Capital Costs

Items

Option 2

GICU

Option 3

New Build

£’000 £’000

Departmental Costs 4,025 5,780

On Costs 395 1,645

Total Works Cost Total 4,420 7,425

Location adjustment (9%) 398 668

Total Construction Cost 4,818 8,093

Fees (15%) 1,086 1,469

Non-works costs 300 280

Equipment Costs 1,411 1,186

Planning Contingency 761 1,103

Total for approval 8,376 12,131

Optimism Bias 921 2,036

Inflation adjustments 2,042 3,112

Total cost to outturn 11,339 17,279

VAT 2,268 3,456

Total including VAT 13,607 20,735

Departmental costs have been estimated based on designs and drawings to date for Option 2 and pro-rated for Option 3 and benchmarked against similar projects carried out at St George’s Hospital. Option 2 comprises four additional beds in the neuroscience ICU, followed by General Intensive Care Unit: roof-top extension on St James’s Wing and internal refurbishment totalling 2,244 sq m – delivers nine new compliant bed spaces;

Option 3 comprises four additional beds in the neuroscience ICU, followed by the creation of a new two storey building including a shell only on the ground floor providing totalling 2,266 sq m, providing ten additional beds, plus refurbishment of 490 sq m accommodation displaced in Knightsbridge wing. The trusts advisors have confirmed that the costs of demolition have been included in the cost for option 3.

Thus both options provide the required number of medium-term beds.

The location factor has been calculated using the BCIS detailed location factor quarterly report which shows an 8% factor for the London area.

Fees are estimated at 22.5% of works cost for Option 2 and 18.15% for Option 3. The reason for the difference in level of fees is that Option 2 is part of a PFI building and therefore there will be additional negotiations with the PFI provider.

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Equipment costs include all group 2 (fixed medical) and group 3 loose medical) equipment, including ventilators. Built in medical equipment such as pendants is included in the build costs.

The Planning Contingency is 10% of the total costs, including fees and equipment, for both options. This represents the level of cost and programme uncertainty at this stage of the project and is a fairly standard percentage.

Optimism Bias has been estimated by the Trust for both Option 2 at 11% and option 3, which is less well-developed, at 17%. The calculations based on the upper bounds for the scheme and the estimates of mitigation are set out in Appendix 4. Costs are presented at current and out-turn prices utilising the Business Innovation and Skills PUBSEC Tender Price Index for non-housing and BIS PUBSEC Geographical Location Factors. The current PUBSEC index for NHS business cases is 173. The latest published indices indicate that an adjustment for inflation is required as the index is 211 as at the start-on-site date for the main works in Q3/Q4 2015.

The cost forms include VAT at 20% on all costs including fees. VAT on professional fees used to be recoverable (and currently is) but HMRC have announced changes to bring the NHS into line with rest of government. Implementation has been suspended while consultation is undertaken but it is felt prudent to include the full charge for VAT on capital costs. VAT is ignored for the purpose of the economic appraisal as it represents an intra-governmental department transfer; however it is included in capital costs for the purposes of the financial appraisal.

Life-cycle Costs

The Trust’s technical advisors have reviewed each of the options and provided a high-level life cycle cost model, based on the capital costs above, and assessed over an economic life of 30 years. These costs cover the renewals of fabric and engineering elements according to their generally accepted useful lives and periodic redecoration of the building fabric. These are assessed over thirty years following completion of the project, the normal appraisal period for refurbishment of existing buildings.

Total Investment

The whole-life costs of the two options can be compared as follows:

Table 25 Whole-life Costs of Short List Options

Option 2 Option 3

Excl VAT NPV Excl VAT NPV

Capital costs 11,339 10,965 17,279 16,697

Life-cycle costs 30 years 3,041 1,507 4,393 2,190

Total 14,380 12,472 21,672 18,887

Note that revenue costs would be substantially the same for both options, since both are completed in Q4 2016, and therefore have no impact on the outcome of a full economic appraisal. On the basis of current and net present cost of investment, clearly Option 2 would be the preferred option from the economic viewpoint and this option has been used to assess the affordability in Chapter 5.

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3.8 The Short Listed Options

Overview

The ‘preferred’ and ‘possible’ options identified in table 19 above have been carried forward into the short list for further appraisal and evaluation. All the options that were discounted as impracticable have been excluded at this stage.

The recommended shortlist of options for detailed appraisal at OBC stage is therefore as follows:

Table 26 Short Listed Options and Indicative Capital Costs exclusive of VAT

Long List of Options Description Indicative Cost - £’000 Short Listed Options

Do nothing Option 1 Nil Baseline

Rooftop extension Option 2 £ 11,339

New build Option 3 £ 17,279

As a consequence it is for this SOC to demonstrate affordability for a proposed scheme that could range from a capital consequence of £11.4m to £ 17.3m excluding VAT or £13.6m to £20.7m including VAT.

Economic Appraisal Conclusion - cost

It can be seen that the option that shows the lowest net present cost is Option 2.

3.9 Qualitative Benefits Appraisal

The qualitative benefits appraisal took place in June 2013, and reviewed recently, given that the options have not changed there was no change from the refreshed view. The summarised views of project team on the major qualitative beneficial features of the project. A weighting and scoring exercise was carried out as described below.

Table 28 below identifies those representing the main stakeholders in the project taking part in the benefits appraisal.

Table 27 Project Team

Name Role Organisation

Les Sutton / Jenn Owen

General Manager Critical Care St George’s Hospital

Andrew Rhodes/Mark Hamilton

Clinical Director of Critical Care St George’s Hospital

Kevin Harbottle Assistant Finance Director St George’s Hospital

Lauren Jones CWDT – Strategic Finance Manager St George’s Hospital

Sharon Welby Assistant Director Capital Projects St George’s Hospital

Peter Limb Original financial analysis and co-author of SOC

Capita Symonds

Marianne Graham SOC Author Capita Symonds

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The project team initially reviewed the Benefit Criteria and Weighting; these are agreed as follows:

1. Provides enough capacity to meet demand, over the next 5 years, and provides flexibility, for the future and fit with the Trust’s strategic plans

2. Enhances clinical practice that support clinical effectiveness, improved patient outcomes and patient safety

3. Quality of care is enhanced, in terms of the model of care, and seamless pathways of care and patient choice.

4. Provides a dynamic working environment that supports research and development

5. Development of a working environment of a critical care facility that will encourage retention and recruitment

6. Facilities will meet the requirements of NHS Estates guidance for the built environment for intensive care areas and equipped accordingly with the appropriate infrastructure

7. Patient experience is enhanced, in terms of privacy and dignity, and the quality of environment.

8. The development will be delivered on time with minimal disruption to current service delivery

Results of the weighting exercise are shown in Table 29 below:

Table 28 Criteria Weighting Results

Criterion Weight %

To implement an early design/build solution that provides a safe critical care service that ensures capacity for current and future demands of patients requiring critical care

20

Provides appropriate clinical adjacencies and departmental clinical relationships 15

To provide improved access to critical care for all patients who may need it 20

To create a unit that is conducive to clinical teaching, research and development. 7

To provide critical care support services that are conducive to the needs of a modern workforce

10

To provide new critical care capacity that is compliant with NHS building guidance standards

10

To provide modern, accessible facilities for patients and relatives 10

To provide continuity of clinical services throughout the development programme 8

TOTAL 100

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Table 29 Raw Score Results

Criteria Option

1 2 3

Provides enough capacity to meet demand, over the next 5 years, and provides flexibility, for the future and fit with the Trust’s strategic plans

1 9 7

Enhances clinical practice that support clinical effectiveness, improved patient outcomes and patient safety

1 8 6

Quality of care is enhanced, in terms of the model of care, and seamless pathways of care and patient choice.

2 9 9

Provides a dynamic working environment that supports research and development

1 10 10

Development of a working environment of a critical care facility that will encourage retention and recruitment

1 10 10

Facilities will meet the requirements of NHS Estates guidance for the built environment for intensive care areas and equipped accordingly with the appropriate infrastructure

1 10 10

Patient experience is enhanced, in terms of privacy and dignity, and the quality of environment.

2 9 9

The development will be delivered on time with minimal disruption to current service delivery

2 7 7

Raw Total 11 98 68

Rank 3 1 2

The reasons for differences in scores between options are discussed below.

Option 1 It was agreed to maintain this option within the shortlist as a baseline comparator. This option scored less well than other options demonstrating that it does not support the strategic fit for the Trust in providing efficiencies in critical care provision and flexibility in capacity, or contribute to benefits relating to recruitment and retention of staff and patient experience relating to privacy and dignity. This option is the current status and section 2 has outlined the consequences of a do nothing option.

Option 2 Option 2 demonstrated, through the non-financial appraisal process, that the Trust is able to realise benefits and achieve the strategic objectives of providing an appropriate solution to meeting current and future capacity demands for critical care services. This option scores better than the other two options in terms of clinical effectiveness and patient safety due to its ability to provide efficient departmental adjacencies, efficiency in service provision and flexibility. This option additionally, enables continued progress for the Trust’s strategic plan as it moves toward foundation status.

Option 3 This option scored reasonably in most areas of benefit criteria, however it was viewed that this option could not deliver the maximum benefits that could be achieved by Option 2. This option has a significant impact on the Trust’s current capital plan and currently not considered in the short term. This option does not resolve the immediate capacity and 5 year solution required.

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These scores were then weighted in the ratios as applied to the original raw scores. The results are shown in Table 30.

This clearly shows that Option 2 is the preferred non financial option. It provides an effective solution to the Trust’s needs, and in particular will be significantly more effective than the alternative options at providing an early solution that meets current capacity issues and future demand requirements.

Table 30 Scoring Results – Weighted

3.10 Risk Appraisal – Unquantifiable

The Trust relevant risks for this business case are outlined in section 6.

3.11 The Preferred Option

Combined investment appraisal – Value for money

The economic and non-financial appraisals set out in this chapter can be combined to determine the best value for money option. The three options were ranked on their raw scores and their weighted scores. The net present costs of each option were determined and the options ranked according to their net present cost (i.e. the cost in today’s money of all incremental costs and savings of each of options 2 and 3 versus the Do Nothing Option 1). Where one option scores higher from a non-financial appraisal point of view but also has a higher cost, the relative value for money can be expressed in £’s per qualitative point score, to demonstrate whether the additional cost actually represents better value for money. In this case, however, the highest scoring option also has the lower net present cost and hence a significantly lower cost per point. The options can therefore be summarised thus:

Benefits Criteria Weight

Score (1-10) Weighted Score Score (1-10) Weighted Score Score (1-10) Weighted Score

Provides enough capacity to meet

demand, over the next 5 year, and

provides, flexibility, for the future and fit

with the trsuts stratgic plans 20% 1 0.2 9 1.8 7 1.4

Enhances clinical practice that support

clinical effectiveness, improved patient

outcomes and patient safety 15% 1 0.15 8 1.2 6 0.9

Quality of care is enhanced, in terms of the

model of care, seamless pathways of care

and patient choice 20% 2 0.4 9 1.8 9 1.8

Provides a dynamic working environment

that supports research and development 7% 1 0.07 10 0.7 10 0.7

Development of a working environment of

a critical care facility that will encourage

retention and recruitment 10% 1 0.1 10 1 10 1

NHS Estates Guidance for the build

environment of critical care areas and

equipped with the appropriate

infrastructure 10% 1 0.1 10 1 10 1

Patient experience is enhanced, in terms

of privacy and dignity, and the quality of

the environment 10% 2 0.2 9 0.9 9 0.9

The development will be delivered on

time with minimal disruption to current

service delivery 8% 2 0.16 7 0.56 7 0.56

100% 11 1.38 72 8.96 68 8.26

Rank 3 1 2

Option 1 - Do Nothing

Option 2 -

Stage 1 - develop 4 beds on

NICU terrace

Stage 2 - develop 9 beds on

GICU roof Option 3 - New Build 10 beds

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Table 31 Summary of Economic and Value for Money Appraisal

Option 1 Option 2 Option 3

Raw scores 11 72 68

Weighted Scores 1.38 8.96 8.26

Rank (non-financial) 3 1 2

Net present cost (NPC) (£k) 0 132,003 138,542

NPC per point score (£k) n/a 14,732 16,772

Rank (VFM) n/a 1 2

Thus Option 2 (described below) is the Preferred Option under both non-financial and economic scenarios.

Option 2

Phase 1: 4 new beds on the terrace of NICU

Phase 2: Development of 9 new beds on the rooftop of St James Wing adjacent to current GITU.

The outcome of the appraisal is relatively insensitive to change.

The switching points for the value for money assessments would be:

If costs remain the same, Option 3 would need to achieve a weighted score of 9.48 to give the same NPC per point as Option 2. Given the maximum possible weighted score is 10.00 this is highly unlikely and would need an increase in scores of 14% to achieve.

Conversely, if the scores remained the same, the net present cost of option 3 would need to reduce by £15,328k to change the value for money choice. Given the capital cost is only £11m in NPV terms, whilst revenue costs are largely the same for both options, this reduction in cost is impossible to achieve.

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4. Commercial Case

4.1 Introduction

This section of the OBC describes the proposed procurement strategy for the investment as per the preferred option outlined in the Economic Case.

4.2 Commercial Strategy

The quality and fitness for purpose of the NHS Estate and the services that maintain it are integral to delivering high quality, safe and efficient care (Treasury Value for Money Update 2009). It is also an area of significant spend. The total net budget for Estates & Facilities was/is as follows:-

Table 32 Estates & Facilities Budget

Financial Year Budget

2012/13 £40,199,858

2013/14 £42,040,310

2014/15 £40,764,160

The budgets for 12/13 and 13/14 are based as at M12 for each year and projected figures for 2014-15. The funding for the capital elements of the scheme will be provided by loans. Critical care services are paid for by the commissioners NHS England and Clinical Commissioning Groups on a bed day basis for patients in the form of a local bed day tariff. The detailed income, expenditure and cash flow can be found in section 5 of this OBC.

4.3 Procurement Strategy

The capital elements of the scheme will be procured under EO OJEU tendering procedures.

The advantages of this method of procurement are:-

Trust retains control over the Design Team carrying out the detailed design.

Price certainty and transfer of risk to the main contractor is achieved at contract award, provided no subsequent changes are instructed to the design.

A high level of quality in design and construction is achievable.

Changes to the works can be evaluated on the basis of known prices obtained in competition.

OJEU was chosen due to the amount of design work that had to be completed in the feasibility stage in order to calculate the weight requirements for the roof, loading of services and whether the building would require reinforcement.

4.4 Key Factors Affecting Outcomes

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Design, Build and Construction Management

The new build on the roof adjacent to the existing GITU and NICU development will require planning consent. Discussions have been completed with the local planning authority and planning has been agreed. Phasing of work is outlined in Appendix 2 and section 6.8.

Implementation Timescales

Section 6 of this business case, (Table 44) outlines the implementation programme.

Building Research Establishment Environmental Assessment Method (BREEAM) The Trust are committed to achieve an Excellent rating in the new build phase of the preferred option and will achieve no less than a Very Good rating under BREEAM assessment. In addition to BREEAM the AEDET evaluation process will take place as the design proposals develop through the FBC process. The detailed design process at FBC stage will also demonstrate building regulation and fire code compliance.

Potential for Risk Transfer Proposed risk transfer will be set in the agreed contract.

Proposed Charging Mechanisms The Trust intends to make payments in relation to works required in accordance with the agreed contract.

Proposed Contract Lengths

Contract lengths will be set in relation to the agreed programme reflected in the contract.

Proposed Key Contractual Clauses

Key contractual clauses in relation to works associated with this scheme will be in accordance within the contract terms, or existing Trust contracts as appropriate.

Personnel Implications (including TUPE)

TUPE Regulations will not apply to this investment as no undertakings will transfer between employing entities.

Equipment Strategy

For the purposes of this OBC, the Trust have decided to purchase equipment outright. At FBC the Trust will review this in the context of detailed plans and will appraise the long-term cost of capital purchase, leasing and a managed equipment service options. At this stage of the business case the Trust have identified that the capital purchase of equipment will be most beneficial.

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5. Financial Case

5.1 Introduction

The Financial Case sets out the financial implications for the Trust in terms of capital expenditure, income and expenditure account and borrowing. This is based on Option 2, which at this stage is likely to be the preferred option, given the significant difference in costs between the two options, though this will be tested in greater depth in the OBC.

St George’s Healthcare NHS Trust has a forecast turnover in 2014/15 of £733.5 million and a projected surplus of £4.3 million. It carries an overall financial risk rating of 3.

The results for the last three years and projected figures for current financial year are set out below:

Table 33 Result of last three years & projections for Current Financial Year

£ millions 2011/12 2012/13 2013/14 2014/15

Total Income 613.7 636.0 664.7 733.5

Operating expenses -583.5 -602.9 -630.2 -695.9

Operating surplus 30.2 33.1 34.5 37.6

Non operating income 4.9 0.3 0.1 0

Depreciation -18.7 -18.8 -19.0 -21.6

Interest payable -3.8 -3.2 -3.3 -3.8

PDC Dividend -6.9 -7.2 -7.6 -7.9

Surplus for the year 5.7 3.2 4.7 4.3

The Trust’s overall Continuity of Services Risk Rating for 2013/14 was 4, whilst the projections for 2014/15 indicate a rating of 3.

The Financial Case for the enlarged Intensive Care Unit sets out the financial implications for the Trust in terms of capital expenditure and cash flow, impact on income and expenditure account and borrowings.

5.2 Capital Costs

The capital expenditure for option 2 follows the profile detailed in Table 35 below.

Table 34 Summary of Capital Expenditure

Capex

2014/15 2015/16 2016/17 2017/18 2018/19 Total

New build - GICU 0 5,074 6,771 0 0 11,845

Refurbishment - NICU 220 1,542 0 0 0 1,762

Equipment 0 0 0 0 0 0

Total capex 220 6,616 6,771 0 0 13,607

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The revenue cost and income assumptions for this Financial Case are set out below:

The rates of inflation, efficiency and tariff deflation used in this business case are:

Table 35 Adult Critical Care – Inflation, tariff and efficiency assumptions

2015/16 2016/17 2017/18 2018/19 2019/20

Tariff -1.60% 0.40% -0.60% -0.70% -0.70%

Other income 0.30% 1.25% 0.80% 0.75% 0.75%

Pay 1.50% 2.50% 3.00% 3.00% 3.00%

Pay plus pension change 2.55% 4.60% 3.00% 3.00% 3.00%

Drugs 5.00% 5.00% 5.00% 5.00% 5.00%

Non-pay 2.20% 2.10% 2.20% 2.20% 2.20%

Internal cross charges 2.20% 2.10% 2.20% 2.20% 2.20%

Facilities charges 2.20% 2.10% 2.20% 2.20% 2.20%

Efficiency savings -4.50% -4.00% -4.00% -4.00% -4.00%

Income is based on the extensive demand forecasting undertaken by the Trust to understand the 10 year projected demand. Given the uncertainty of predicting demand beyond five years this financial appraisal looks only at the next five years of growth. Income is calculated by multiplying expected activity in bed-days by the predicted tariff after applying the tariff deflator.

The division receives other income from overseas and private patients and other levies, amounting to circa £800k in total and this has been projected to increase in line with tariff income.

The costs themselves are based on a detailed construction of the staffing complement for each category of intensive care and the number of beds in total. Staff costs are based on mid-point of scale. This methodology is not meant to be a proxy for budgeting, rather a means of identifying reasonably accurately the incremental staffing costs for various bed configurations.

In addition, all non-pay costs, cross charges, including the increased cost of maintenance, and allocated costs are based on the calculated cost per bed based on 2013/14 out-turn. Incremental costs ignore general overheads (which are assumed to remain constant and not changed by the extra activity) and focus on the contribution the project makes to the capital charges associated with the project and to the Trust’s income/surplus.

The income and revenue costs for the division, expressed at constant 2014/15 prices and ignoring cost improvement efficiencies are as follows:

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Table 36 Divisional Income Expenditure at 2014/15 Prices

2014/15 2015/16 2016/17 2017/18 2018/19 2019/20

Total Income 32,397 33,449 34,568 35,755 36,919 38,122

Staff Numbers 412 421 448 453 453 469

Staff costs

Consultants -2,058 -2,095 -2,289 -2,348 -2,348 -2,526

Registrars -2,883 -2,883 -2,883 -2,883 -2,883 -2,883

House Officers -612 -679 -766 -743 -743 -674

Nurses -15,223 -15,498 -16,498 -16,723 -16,723 -17,399

Other Medical 0 0 0 0 0 0

A&C -386 -412 -445 -436 -436 -407

Other -35 -35 -35 -35 -35 -35

Total Pay -21,197 -21,602 -22,916 -23,168 -23,168 -23,924

Non-pay

Drugs -1,007 -1,032 -1,146 -1,178 -1,178 -1,272

Other non-pay -3,813 -3,866 -4,101 -4,166 -4,166 -4,361

Total non-pay -4,820 -4,898 -5,247 -5,344 -5,344 -5,633

Total Direct Costs -26,017 -26,500 -28,163 -28,511 -28,511 -29,557

Cross Charges -1,689 -1,731 -1,904 -1,949 -1,949 -2,082

Indirect exp -788 -808 -889 -910 -910 -972

Total direct & indirect -28,494 -29,039 -30,956 -31,370 -31,370 -32,611

Contribution 3,903 4,410 3,612 4,385 5,549 5,512

The pay, non-pay, and non-direct costs have been based on the number of beds in place. There has been a case mix change in the administration posts and which unit they are associated with. Therefore in the transition years there appears to be an increase before the steady state is achieved.

Therefore the incremental income and costs relating to the additional beds created, at constant 2014/15 prices, again ignoring cost improvement, are:

Table 37 Incremental expenditure at 2014/15 prices

2014/15 2015/16 2016/17 2017/18 2018/19 2019/20

Total Income 0 1,052 2,171 3,358 4,522 5,725

Staff Numbers 0 8 36 41 41 57

Staff costs 0 0 0 0 0 0

Consultants 0 -37 -231 -290 -290 -468

Registrars 0 0 0 0 0 0

House Officers 0 -67 -154 -131 -131 -62

Nurses 0 -275 -1,275 -1,500 -1,500 -2,176

Other Medical 0 0 0 0 0 0

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A&C 0 -26 -59 -50 -50 -21

Other 0 0 0 0 0 0

Total Pay 0 -405 -1,719 -1,971 -1,971 -2,727

Non-pay

Drugs 0 -25 -139 -171 -171 -265

Other non-pay 0 -53 -288 -353 -353 -548

Total non-pay 0 -78 -427 -524 -524 -813

Total Direct Costs 0 -483 -2,146 -2,494 -2,494 -3,540

Cross Charges 0 -42 -215 -260 -260 -393

Indirect exp 0 -20 -101 -122 -122 -184

Total direct & indirect 0 -545 -2,462 -2,876 -2,876 -4,117

Contribution 0 507 -291 482 1,646 1,609

The above figures illustrate the impact of the increased beds and activity at constant prices/costs. They do not include cost efficiencies, which have been set for the division at £1.15m for 2014/15 and the division is expected to contribute to the Trust’s on-going cost improvement programme over the next five years; the extra activity and cost thereof will therefore also be required to contribute cost efficiencies.

The incremental income and revenue costs in nominal prices (i.e. taking into account inflation of costs and tariff deflator) associated with the scheme are set out in Table 39 below. As mentioned above, the additional activity and beds will have to contribute efficiency savings at the rate determined by Monitor. These efficiency savings are included in the inflated costs and the amount included for each year is shown at the foot of the table.

Table 38 Summary of Revenue Income and Expenditure

The costs below EBITDA include: Depreciation on net capital costs at the rate of 2½% for new buildings, 4% for refurbishments and 10% for equipment.

The impairments are calculated at 20% for new and 40% for refurbishments, which is consistent with other similar capital projects as advised by Capita. The impairment is a one-off I&E “hit” but has no cash effect and only a technical impact on the break-even requirement.

Interest on loans is described under the next section of Financing.

2014/15 2015/16 2016/17 2017/18 2018/19 2019/20

Income 0 1,035 2,145 3,297 4,410 5,544

Total Operating Costs 0 -513 -2,495 -2,894 -2,810 -4,125

EBITDA 0 523 -350 404 1,600 1,419

Depreciation 0 -11 -168 -298 -304 -311

Impairments 0 -705 -2,369 0 0 0

0 -193 -2,887 106 1,295 1,108

Interest on loans -16 -257 -473 -454 -435 -415

PDC dividend payable 0 24 269 101 66 58

Surplus/(deficit) for the year -16 -426 -3,092 -247 927 750

Surplus before interest

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The Trust receives some relief from PDC dividends because the initial losses, mainly caused by impairments and loan financing, will reduce the net relevant assets; this is off-set by the cash out-flow, which increases the dividend payable. Cash is usually deducted for net relevant assets so a shortfall in cash is added back.

Revaluation of fixed assets is an annual indexation, at 3½% (CPI plus 1½%) of the impaired asset values as a proxy for the regular revaluation of assets required by IFRS. This is taken to revaluation reserve and is included here to show total comprehensive income.

Financing

The Trust will be undertaking several capital projects in the next few years and it is anticipated that the capital expenditure for this scheme will be funded by borrowings from the Department of Health. The rate of interest on loans is determined by the National Loans Fund and currently stands at 3.14% for 25 year loans. It is usual to match the period of a loan to the asset acquired subject to a maximum of 25 years and although equipment would have a much shorter life, the majority of this scheme is for a new build so it is appropriate to take the full amount of capital expenditure as a 25-year loan.

It is usual to add a buffer of up to 100 basis points to allow for potential increases in interest rates where the loan is not required immediately and therefore a buffer of 100 bps has been added, making a loan interest rate of 4.14%. The impact on the Trust’s cash flow over the first five years following the current year is outlined in the table below.

Loans are repayable on the Equal Instalments of Principal basis with twice-yearly repayments commencing six months after final draw-down. It is assumed the loan will be drawn down in two parts to finance each phase, with cash for the second phase drawn in mid-2015/16; this leaves a cash surplus at the end of financial year 2015/16 because the building works extend into the following year. Thus repayments are assumed from August 2016, although this will ultimately depend on the precise terms of the loan. Interest is calculated on the daily balance but paid twice-yearly at the same time as the repayments.

The impact of the scheme and its resultant activity on the cash position of the Trust is set out in Table 39 below:

Table 39 Cash Flow impact of the scheme

2014/15 2015/16 2016/17 2017/18 2018/19 2019/20

Operating Surplus 0 -193 -2,887 106 1,295 1,108

Add depreciation 0 11 168 298 304 311

impairments 0 705 2,369 0 0 0

Incr receivables 0 0 0 0 0 0

Net cash flows 0 523 -350 404 1,600 1,419

Purch fixed assets -220 -6,616 -6,771 0 0 0

Loans from DH 900 12,900 0 0 0 0

Loan repayments 0 0 -552 -552 -552 -552

Interest paid -16 -257 -473 -454 -435 -415

PDC dividend 0 24 269 101 66 58

Incr/(decr) in cash 664 6,573 -7,878 -501 679 509

Cumulative cash incr/(decr) 664 7,238 -641 -1,142 -463 46

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The Trust currently stands well within its prudential borrowing limit and the Continuity of Service Risk Ratings is unlikely to be significantly impacted by this scheme. The Trust currently maintains a COSRR of 3 and this will remain at 3 until the works are completed. The scheme capital expenditure was anticipated and included in the version of the LTFM that, along with the Integrated Business Plan, formed part of the Trust’s FT application. The capital expenditure and corresponding financing figures above are already included in the LTFM and since the project contributes a break-even to positive EBITDA it will have no significant impact on the ratings calculation.

5.3 Impact on Balance Sheet

The impact on the Trust balance sheet of the transactions set out in this business case is as follows:

Table 40 Impact on Trust Balance Sheet

2014/15 2015/16 2016/17 2017/18 2018/19 2019/20

Fixed Assets 220 6,844 13,615 14,353 14,353 14,353

Less depreciation and impairments 0 -716 -3,252 -3,550 -3,854 -4,165

Net book value 220 6,128 10,363 10,803 10,499 10,188

Trade receivables 0 0 0 0 0 0

Cash 664 7,238 -641 -1,142 -463 46

Borrowings -900 -13,800 -13,248 -12,696 -12,144 -11,592

Net Assets -16 -434 -3,526 -3,035 -2,108 -1,358

Taxpayers Equity -16 -434 -3,526 -3,035 -2,108 -1,358

The accumulated deficit in taxpayers’ equity is due to the impairments in early years and the initial cost of finance; this begins to be reduced by the growing contribution from the scheme by 2018/19.

5.4 Overall affordability As described in the Financing section, the scheme capital expenditure of some £13.6m for Option 2 has been included in the version of the LTFM that has been provided to Monitor, along with the Integrated Business Plan. It can be confirmed, therefore, that the scheme as set out herein, shows an overall positive EBITDA of £ 3.6m over the five years of the evaluation period.

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6. Management Case

6.1 Introduction

This section of the OBC addresses the ‘achievability’ of the scheme. Its purpose is to set out the actions that will be required to ensure the successful delivery of the scheme in accordance with best practice.

6.2 Project Governance Arrangements

For governance purposes the project sits under the auspices of the St George’s Hospital Critical Care Development Board. The Critical Care Development Board has been established to act as a project board to successfully deliver the critical care expansion through to construction phase. The Project Board will ensure that all objectives are met and will ensure that key deadlines are met and the development adheres to wider requirements. The project board will be chaired by Eric Munro, Director of Estate and Facilities.

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 critical care expansion. The following work streams have been established to ensure that clinical requirements will be delivered:

Business Case

Design Team

Clinical Pathway Team

Equipment

Communications

6.3 Project Management Arrangements

The project will be managed by the St George’s Healthcare NHS Trust. The Project Board has the responsibility to drive forward and deliver the outcomes and benefits of the project, being the delivery of an a expanded, modern and safe Critical Care service, compliant with NHS standards of construction and delivery.

Members will provide resource and specific commitment to support the project manager to deliver the outline deliverables.

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The project structure is as follows:

Project Management Structure

The Critical Care Project Board is the main executive body for the proposed development. It is accountable to the Executive Team and the Trust Board for the delivery of the Trust’s Investment and Corporate objectives. The Project Board will report monthly to both the Executive Team and the Trust Board regarding progress of the development, risks and financial consequences.

6.4 Project Board Role & Responsibilities

The Project Board is ultimately responsible for assurance that the project remains on course to deliver the end product or output in line with the Strategic Business Case.

Throughout the life of the project, the Project Board will be responsible for ensuring key elements of the project occur including:

Sign off the Project Initiation Document;

Ensuring adequate resources are deployed into the project to enable delivery; inclusive of the appointment of a Project Manager and advisors as appropriate;

Receive reports from the Project Manager and monitor progress/ authorise slippage;

Review risks, issues and exceptions and determine appropriate course of action based on recommendations from the Project Manager;

Exercise functional and financial authority to support the project;

Sign off project stages/ closure.

The end stage of the project will result in the completion, handover and commissioning of the new facility. The Project Board is responsible for providing assurance that the project has been delivered in terms of product and quality in line with the Business Case.

TRUST BOARD

EXECUTIVE TEAM

CRITICAL CARE PROJECT

BOARD

CRITICAL CARE STEERING

GROUP

DIRECTORATE DIVISIONAL

MAMAGEMENT BOARD

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6.5 Membership of the Project Board

The Project Board has been set up in line with PRINCE 2 Project Methodology (the agreed NHS method for delivery of Capital Projects). Therefore, the Project Team has a Senior Responsible Officer, Project Director, Project Manager and specialist resources to deliver the scheme as required. The Senior Project Board Members are as follows:

Senior RO/Project Owner – Miles Scott, Chief Executive, St George’s Healthcare Trust

Project Director – Eric Munro, Director of Estates & Facilities

Project Manager – Sharon Welby,

In order to ensure successful delivery of the development, the Project Board is made up of members, as follows:

Table 41 Project Board Members

Member Title

Eric Munro Director of Estates & Facilities; Chair

Sofia Colas Divisional Director of Operations

Dr Andrew Rhodes Divisional Chair, Women’s, Children’s and Critical Care

Sharon Welby Project Manager

Kevin Harbottle Assistant Director of Finance

Anne Palmer Senior User / Head of Nursing & Governance

Dr Mark Hamilton Senior User / Clinical Director of Critical Care

Jennifer Owen Senior User/ General Manager Critical Care

Lauren Jones Women’s, Children’s and Critical Care Interim Strategic Finance Manager

In addition the Project Manager may engage a number of professionals to deliver the technical detail of the development, such as:

Healthcare activity modelling and planning

Healthcare Planners

Architects & Design

Financial & Economic Modelling

6.6 Internal Project Management Arrangements

The project will be managed in accordance with the principles of PRINCE2 methodology. Sharon Welby, Assistant Director of Capital Projects, will be the lead Project Manager for the work. The project manager will have support from the capital projects team, and external consultants.

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Steering Group

A Steering Group has been set up to take responsibility for driving the key work-streams and to report back to the Project Board on a regular basis. The Steering Group will be chaired by the Clinical Lead Dr Mark Hamilton.

The Steering Group will be responsible for:

High level stakeholder involvement

Providing strategic direction for the project

Addressing the local health economy need

Ensuring continuing commitment to stakeholder support

Programme monitoring

Overall development budget

Regular monthly project meetings

Membership of the Steering Group is:

Mark Hamilton Clinical Director of Critical Care (Chair)

Sharon Welby Project Manager

Jenn Owen General Manager

Anne Palmer Head of Nursing

Rachel Gerdes Hansen Capital Project Manager

Kevin Harbottle Finance Accountant

Lauren Jones Strategic Finance Manager

Jonathan Ball ICU Intensivist

Maurizio Cecconi ICU Intensivist

Nichola Miles ICU Service Manager (administration of the group)

TBC Procurement Representative

TBC Patient Representative

TBC Senior Communications Manager

Including Divisional Chair representation from the two divisions that use the critical care facilities;

Drew Fleming Divisional Chair – Surgery

Eric Chemla Divisional Chair – Medicine

The terms of reference for the Steering Group can be found at Appendix 5.

Work Stream Committees

As shown in the governance structure, Figure 6A, a number of work stream committees have been developed to ensure the successful development of the Critical Care Development Project Board Work streams have been established as follows:

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Work stream Business Case Lead Sofia Colas

Responsibilities To ensure the timely delivery of the business case

Appoint Business case consultants to research and develop

both Outline Business Case and Full Business Case

Work stream Design Team Lead Sharon Welby

A Project Team will be established to co-ordinate the activities of

the project. This will be managed by the Project Manager

Responsibilities Day to day project involvement

Appointment of consultants / design team

Responsible for overall development of the budget

Involved in monthly project meeting

Responsible for meeting the needs of Critical Care Steering

Group

Ensuring timely delivery of the business case

Ensuring the risk register is maintained

The Members are:

Sharon Welby Project Manager

Rachel Gerdes Hansen Project Manager

Architect

M & E Consultant

Structural engineer

Contractor

Cost Consultants

IT

Estates

Fire Officer

Infection Control team

Security

This group is managed by Rachel Gerdes-Hansen, Project Manager

Design team members have been appointed. Regular meetings are in place and feedback is provided to the Steering Group and project Board.

Work stream Clinical Lead Jonathan Ball

The clinical work stream currently input clinical requirements for the

future requirements of Critical Care services.

Work stream Equipment Lead Maurizio Cecconi

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The equipment work stream will assess current equipment being

used and the future requirements, life expectancy of current

equipment and costings associated with the replacement and new

equipment in the new GITU

Work stream Communications Lead TBC

The Communications Work Stream will ensure that key information is

communicating both internally and externally to the wider media.

Project Roles and Responsibilities

The Key Project responsibilities are as shown in Figure 6B below.

Figure 6B Critical Care Unit Programme Management Structure

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 Sofia Colas, Divisional Director of Operations. Her 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

St Georges Hospital Critical Care Project

Board

Critical Care Steering Board

Project Director Eric Munro

Project Sponsor Sofia Colas

Finance Strategic – Kevin HarbottleDivision Finance – Lauren

Jones

Project Manager Sharon Welby

Clinical LeadDr Mark Hamilton

External Advisors

External Design Team

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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

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 Mark Hamilton, Consultant. 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

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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

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:

Develop detailed project plans

Identify key milestones and benefits

Report progress via Lead at Project Board meetings

Identify problematic issues and implement agreed actions to mitigate these

6.7 Programme Milestones

The detailed Programme for the development is dependent on the preferred option and dates may change as a result, however indicative milestones for delivery are as follows:

Table 42 Programme Milestones

Milestone Date

Preparation of Strategic Outline Case July – August 2014

Strategic Outline Case & Outline Business Case Trust Board Approval

November 2014

Detailed Design complete Aug 2014

Financial Plan complete November 2014

Strategic Outline Case & Outline Business Case to NTDA December 2014

Full Business Case submission to Trust Board February 2015

Full Business Case to NTDA March 2015

Full Business Case Approval (internal & external) end of May 2015

Construction commences June 2015

Handover July 2016

Trust Commissioning Period Aug 2016

Trust Operational September 2016

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6.8 Construction Programme

The Trust has planned its programme of construction works to match the peaks and troughs of operational activity, so that the ability to provide services is not compromised and all additional capacity can be utilised at the earliest possible opportunity.

The first phase comes with start of the NICU construction works in Qtr.2 of 2015, which we estimate to be the quietest time of the year. Therefore we would have the capacity to accommodate patients, should any of the current beds be closed during the NICU expansion works. As we are building out onto the balcony the disruption shouldn’t cause much impact on the beds but on the support elements.

The GICU construction works period, which is of a much longer duration than NICU, also starts in Qtr.2 of 2015. However the first six weeks is during the summer vacation period and traditionally a much quieter period. The intention is to use Holdsworth ward which is also typically quiet at this time. The mid construction phase will coincide with periods of increasing activity, but at this point the new NICU facility comes on line. This will provide the capacity to alleviate the winter pressure time of Qtrs.3-4 in 2015-16, and by mid 2016-17 the new GICU beds should be on line.

Table 43 Project Plan

6.9 Use of Special Advisors

Special advisers have been used in a timely and cost-effective manner in accordance with the Treasury Guidance.

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Table 44 External Advisors

St Georges Hospital CRITICAL CARE UNIT

1 Frankham Consultancy Group Limited Architects

2 WT Partnerships Cost Consultants

3 Capita Symonds Business case / Finance analysis

4 Clarke Nicholls Structural Engineers

5 Frankham Consultancy Group Limited Mechanical and Electrical Engineers

6 Capita Symonds PMO

7 Butler & Young Building Supervisors

8 Turner & Townsend CDM

6.10 Stakeholder Engagement Plan

An engagement plan will be developed and sent to each stakeholder / group of stakeholders. This plan will incorporate stakeholder information required, stakeholder engagement methodology and frequency of flow of information. Table 46 highlights the key stakeholders for this project.

Table 45 Key Stakeholders

Internal stakeholders External stakeholders

Trust Board

Clinical staff

Non clinical staff

Patient Rep

IT

Estates & Facilities

Finance

HR

PCTs

Unions

Friends of St George’s

NHS Trust Development Authority (NTDA)

Education provider – St George’s University

of London

Local acute Trusts – Kingston Foundation

Trust, Epsom and St Helier NHS Trust,

Mayday Healthcare NHS Trust, The Royal

Marsden NHS Foundation Trust)

CCG’s– Wandsworth, Sutton & Merton,

Kingston, Richmond & Twickenham,

Croydon

General Public

Special interests groups (need to specify)

NHS Trust Development Authority (NTDA)

6.11 Outline Arrangements for Change and Contract Management

Change management associated with the project will be managed through the St George’s Trust Board, under the chairmanship of the Chief Executive and Senior Responsible Owner (SRO). Day to day change management issues will be discussed at the Critical Care Steering

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Group and any resultant contract and/or cost changes will need to be approved by the Project Board.

6.12 Outline Arrangements for Benefits Realisation

The delivery of benefits will be managed through the Project Board. An outline copy of the project benefits realisation plan is attached at Appendix 6 and will be expanded for the FBC submission. . This sets out who is responsible for the delivery of specific benefits, when they will be delivered and how achievement of them will be measured. The key opportunity is presented by the new design for the facilities, which will facilitate capacity meeting demand, efficiencies in service delivery and addressing compliance to standards requirements.

Key benefits of the project are:

Provides enough capacity to meet demand, over the next 5-10 years, and provides flexibility, for the future and fit with the Trust’s strategic plans

Enhances clinical practice that support clinical effectiveness, improved patient outcomes and patient safety

Quality of care is enhanced, in terms of the model of care, and seamless pathways of care and patient choice.

Provides a dynamic working environment that supports research and development

Development of a working environment of a critical care facility that will encourage retention and recruitment

Facilities will meet the requirements of NHS Estates guidance for the built environment for intensive care areas and equipped accordingly with the appropriate infrastructure

Patient experience is enhanced, in terms of privacy and dignity, and the quality of environment.

The development will be delivered on time with minimal disruption to current service delivery

6.13 Programme Quality & Assurance Management The development will be managed in line with the Trust preferred methodology for Project Management, PRINCE 2. As part of the methodology, the Project Team are to ensure that regular reporting is maintained to the Project Board regarding progress, risk, issues and financial reporting. In addition, the Project Manager will ensure that the project is delivered in line with Managing Successful Projects Office of Government Commerce (OGC) Guidance.

6.14 Outline Arrangements for Risk Management

The Trust ensures through the involvement of its employees, that risk management serves as a mechanism for risk reduction. Also, by taking a proactive approach to managing risk exposure, the Trust ensures protection of its patients, staff, visitors, assets and reputation. This project will be managed in that context.

Risk Management Policy

The risk management system is described in the Trusts Risk Management Policy (Appendix 8) which is accessible to all staff via the Trust Intranet. It is based on an iterative process of:

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Identifying and prioritising the risks to the achievement of the organisation’s policies, aims and objectives

Evaluating the likelihood of those risks being realised and the impact should they be realised

Managing the risks efficiently, effectively and economically This is achieved through a sound organisational framework, underpinned by a robust policy framework, which promotes early identification of risk, the co-ordination of risk management activity, the provision of a safe environment for staff and patients, and the effective use of financial resources. Risks are identified through feedback from many sources such as proactive risk assessments, adverse incident reporting and trends, clinical benchmarking and audit data, complaints, legal claims, patient and public feedback, stakeholder/partnership feedback and internal/external assurance assessments.

Project Risk Register A risk management framework will be formulated to provide a comprehensive risk assessment and control framework for the project. This will focus on:

The risks associated with the delivery of the options for schemes being developed – this will need to be used in the evaluation of the various design options and tested against the benefits defined for the Scheme

Risk that is highlighted from the individual work stream committees and presented at the Project Board meeting

Risks with regards to authorisation of associated FBC’s The comprehensive risk register for the project will be monitored by the project manager, and reported monthly to the Project Board. The detailed risk register for this project is outlined in Appendix 7. The focus of risk management will address broadly:

Non-delivery of project outcomes as defined in stages of the project plan (the Board will manage business risks) broadly relating to the sign-off of the project

Threats to the completion of the project within cost and time (managed on a day-to-day basis by the Programme/Project Manager)

Operational risks in relational to a building the new capacity alongside maintaining business as usual

Authorisation timescales given the urgent need for appropriate critical care capacity The reporting will follow the PRINCE2 process of checkpoint, highlight and exception reports. The condition will be indicated by using red, amber or green (RAG) colour code as outlined below.

Table 46 Risk Register Colour Code

Score Probability Impact

5 Almost certain Severe

4 Likely Major

3 Possible Moderate

2 Unlikely Minor

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1 Rare None

Score RAG Status Definition

6 or less Condition is on programme or within budget no special action is required

7-14 Condition requires corrective action which has been implemented

15-20 Corrective action urgently required

6.15 Outline Arrangements for Post Project Evaluation

The outline arrangements for post Project Evaluation (PPE) have been established in accordance with best practice. The trust will ensure that a thorough post-project evaluation is undertaken at key stages in the process to ensure that positive lessons can be learnt from the project. These will be of benefit to:

The Trust – in using this knowledge for future capital schemes

Other key local stakeholders – to inform their approaches to future projects

The NHS more widely – to test whether the policies and procedures used in this procurement have been used effectively

Contractors – to understand the healthcare environment better The evaluation will examine the following elements, where applicable at each stage:

The effectiveness of the project management of the scheme – viewed internally and externally

The quality of the documentation prepared by the Trust for the contractors and suppliers

Communications and involvement during procurement

The effectiveness of advisers utilised on the scheme

The efficacy of NHS guidance in delivery the scheme

Perceptions of advice, guidance and support from the strategic health authority and NHS Estates in progressing the scheme

Formal post project evaluation reports will be compiled by project staff, and reported to the Board to ensure compliance to stated objectives.

Post implementation review (PIR) These reviews ascertain whether the anticipated benefits have been delivered and are timed to take place immediately after the new critical care unit opens and then 2 years later to consider the benefits planned.

6.16 Gateway Review Arrangements

A Gateway 1 / 2 Review will be booked when the Trust Board has approved this OBC.

6.17 Contingency Plans

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The Trust has a framework for Business/Service Continuity. In this instance, the Critical Care Directorate ensures that the Trust’s critical care service contingency plans are in place for the event of any disruption.

The Trust’s framework ensures the Trust can comply with the business continuity provisions of the Civil Contingencies Act 2004. Contingency plans have been developed to ensure the Trust can continue to deliver an acceptable level of service of its critical activities in the event of any disruption. Additionally, the plans must be tested for all those activities that are identified as critical on the trust Business Impact Analysis.

In terms of financial contingency, section 5 highlights a planning Contingency of 10% of the total costs, including fees and equipment, for both short listed options.

Signed: .........................................................................................................................................

Senior Responsible Owner

Date: .....................................................................................