HEALTH PRIVATE FINANCE INITIATIVES PUBLIC PRIVATE PARTNERSHIP

1. Consultancy Support Ian Stewart – Healthcare Projects Director HEALTH PRIVATE FINANCE INITIATIVESPUBLIC PRIVATE PARTNERSHIP

2. The PFI process / Consultancy Support Structure of Teams involved in PFI Atkins Experience Learning from PFI Quality & Assessment Protocols Key Criteria for Success INTRODUCTION

3. Public Sector Project Director Project Team Technical Advisers Legal Advisers Financial Advisers Independent Certifiers Private Sector - Consortium Special Purpose Vehicle Design & Construct Contractor Design Team Facilities Management Operator Debt providers Insurance Advisers Equipment Specialists Legal Advisers Finance Advisers Due diligence teams THE STRUCTURE OF TEAMS INVOLVED IN PFI PROCESS

4. Public Sector Bid Consortium Strategic Outline Case Public Sector - OJEU – Technical Advisors Public Sector - Outline Business Case / PSC Public Sector/Advisers- OJEU - Procurement Public Sector - Preliminary Invitation to Negotiate Advisers/Public Sector Designers Bidders invited to respond to PITN Public Sector/AdvisersDesigners / Due Diligence Assessment of PITN responses Advisers/Public Sector - Shortlist invited to respond to FITN Advisers/Public Sector Designers / Due Diligence Assessment of FITN responses Advisers/Public Sector - Identification of Preferred Bidder Public Sector - Financial Close All Designers / Due Diligence Construction Advisors / Independent CertifiersDesigners / Due Diligence CommissioningAdvisors / Independent CertifiersDesigners / Due Diligence THE PFI PROCUREMENT PROCESS 2 years

5. Direct Agreement Advisors Client Lenders Special Purpose Vehicle Loans Advisors (<50% each) Equity DESIGN Design & construction Operation & Maintenance DESIGN FM THE STRUCTURE OF TEAMS INVOLVED IN PFI PROCESS

6. CLIENT ADVISOR ROLE, TECHNICAL ADVISOR OBC • Development Control Plan • Operational Policies • Functional Content • Departmental Relationships • Design Philosophy • PSC Design development • Risk Assessment

7. Interface with bidders Co-ordination of Approval Processes; Review, comment and contribute to the drafting of the ITN documentation; Preparation of the Health & Safety Pre-Tender Plan; Develop and agree bid evaluation criteria (based on AEDET and NEAT) CLIENT ADVISOR ROLE, TECHNICAL ADVISOR PFI

8. Clarify Bidder’s queries; Attend Bidder’s presentations; Seek clarification of any items arising from the Bidder’s submissions; Review Bidder’s responses at the end of each stage and evaluate; Assist during negotiations and participate in selection of preferred bidder. CLIENT ADVISOR ROLE, TECHNICAL ADVISOR PFI

9. Undertaking a review of the bidder’s proposals and comparing against the ITN documents Joint appointment between the SPV and funding institutions Undertaken by health planners, architects, engineers and cost advisors; In the region of 0.1% of capital value of the project Highlighting where derogations identified by the bidder Protecting the funders’ investment DUE DILIGENCE

10. Joint appointment of technical expertise awarded by procuring body and SPC; Independent Certifier will provide a range of expertise including health planning, architecture, engineering and costs; Role is to ensure that the facility delivered by the D&B contractor meets the Employer’s Requirements; The I. C. is responsible for certifying Hospital Availability Date (H.A.D.); It is a very responsible and a high risk role as all the payment mechanism kicks-in once H.A.D. is certified. INDEPENDENT CERTIFIER (I. C.)

11. TECHNICAL ADVISORS Glasgow ACAD’s:- Technical Advisory Services including Medical Planning, Architecture, Building Services Engineering, Civil / Structural Engineering and Cost Consultancy. Project Value: £180m. Royal Edinburgh Hospital:- Full Technical Advisory services for £70m provision of Mental Health facilities for East Scotland. Dumfries and Galloway NHS Trust Maternity and Day Surgery Unit:- Medical Planning and Technical Advisory service for £72m extension to DGRI. South Manchester NHS Trust:- Technical Advisers for proposed Cardiac Care Unit at Wythenshawe Hospital Hairmyres Hospital:- Medical Planner for replacement DGH

12. DUE DILIGENCE Barts and Royal London £850M ( €1200M) University Hospital Coventry & Warwickshire £300M ( € 420M) Derby Royal Infirmary £250M ( €1200M) Manchester Royal Infirmary £450M ( € 350M) Bishop Auckland Hospital £60M ( € 85M) Sedgefield Community Hospital £20M ( € 30M)

13. LEARNING FROM PFIFORM OF CONTRACT • Early PFI deals delayed by bespoke contracts • Standardisation of PFI Contracts. Revised and updated in July 2002 & August 2003. • Reduction in time and costs of negotiation • Clarity of understanding of risks • Consistency of approach in market • Early PFI schemes were criticised • Poor design quality • Lowest cost solutions • Inappropriate responses to urban context • Lack of delight for users • Since 2002 much greater emphasis on design quality • Commission for Architecture and The Built Environment. • Promotion of higher standards of design for public buildings • Use of The Design Development Protocol for PFI Schemes: August 2004

14. QUALITY & ASSESSMENT PROTOCOLSAchieving Excellence – Design Evaluation Toolkit (AEDET Evolution) • AEDET: Achieving Excellence Design Evaluation Toolkit • A tool for evaluating the design of healthcare buildings from initial proposals through to post-project evaluation: • Assists clients in developing design specifications for their schemes; • Provides a methodology for evaluating and assessing the design of healthcare proposals; • Assists in approval role; • Basis for a national benchmarking system of design quality for healthcare buildings • Assessment of: • Functionality • Impact • Building Standard

15. QUALITY & ASSESSMENT PROTOCOLSAchieving Excellence – Design Evaluation Toolkit (AEDET Evolution) • Functionality • Use • Access • Spaces • Impact • Character and Innovation • Citizen satisfaction • Internal environment • Urban and social integration • Build Standard • Performance • Efficiency • Construction • Assists in auditability of decision process

16. QUALITY & ASSESSMENT PROTOCOLSNEAT (NEAT) • NEAT: NHS Estates Environmental Assessment Toolkit • A self-assessment environmental review tool covering environmental and social issues • Used for specifying, estimating and monitoring environmental performance • Issues covered: • Management • Energy • Transport • Water • Materials • Landuse and ecology • Pollution • Internal environment • Social operational waste

17. Key Criteria for Success • Avoidance of ambiguities in Employer’s Requirements with clarity of specification requirements • Clear Communication Routes with single points of contact • Realistic timetable • Robustness of affordability before going to the market-place • Application of the Design Development Protocol • Appointed consultants and bidders must genuinely understand, and have significant experience of, the design and operation of healthcare projects.