west hertfordshire hospitals trust acute transformation

WEST HERTFORDSHIRE HOSPITALS TRUST

ACUTE TRANSFORMATION

Strategic Outline Case

February 2017

V1-0

DOCUMENT CONTROL

Document information

Revision history

Document sign-off

Document title West Hertfordshire Hospitals NHS Trust Acute Transformation SOC

Owner Helen Brown, WHHT Deputy Chief Executive and Director of Strategy and SRO

Status FINAL V1-0

Version Date Description

V0-1 20/12/16 Initial draft for project team review

V0-2 13/01/17 Revised draft addressing review comments

V0-3 18/01/17 Further updates, including more detailed descriptions of short-listed options

V0-4 20/01/17 Numbers and supporting narrative added

V0-5 20/01/17 Version for Finance and Investment Committee

V0-6 23/01/17 Version for circulation to stakeholders

V0-7 25/01/17 Version for WHHT Board

V1-0 03/02/17 Final version following WHHT Board approval

Name Date

Helen Brown, WHHT Deputy Chief Executive and Director of Strategy and SRO 23/01/17

Finance and Investment Committee 24/01/17

WHHT Board 02/02/17

HVCCG Board (to confirm commissioner support)

West Hertfordshire Hospitals NHS Trust Acute Transformation SOC

1

This is the Strategic Outline Case for the acute transformation element of the Your Care, Your Future programme. It establishes the need for investment in West Hertfordshire Hospitals Trust’s estate and seeks approval to conduct a more detailed analysis of a short list of options within the recommended preferred way forward.

Introduction

This Strategic Outline Case (SOC) sets out the acute transformation required in order for West

Hertfordshire Hospitals Trust (WHHT) to support the reconfiguration of services established by the

Your Care, Your Future programme. It is focused on the estate configuration necessary to provide the

required acute hospital services under the future model of care and the works required to achieve

this. The current estate does not provide the required capacity, suffers from major functional suitability

issues that adversely impact on patient care and experience and presents a significant risk to

business continuity, which will put patient safety at risk if nothing is done.

This SOC establishes a compelling case for change for acute care in west Hertfordshire. It appraises

the main options for transformation and then outlines a preferred way forward. It seeks approval to

conduct a more detailed analysis of the short-listed options and move to the next stage of the

business case development process.

This SOC has been prepared using the agreed standards and format for business cases set out in

Her Majesty’s Treasury (HMT) Green Book and guidance developed by NHS Improvement (NHSI). It

is formatted using the five case model, comprising:

The Strategic Case: setting out the strategic context and the case for change, together with the

supporting investment objectives for the scheme.

The Economic Case: setting out the available options and establishing the preferred way forward.

The Commercial Case: outlining the commercial strategy for the project.

The Financial Case: confirming the funding arrangements and affordability.

The Management Case: demonstrating that the scheme is achievable and can be delivered

successfully to cost, time and quality.

The following sections summarise the conclusions from each of these cases.

Strategic Case

The NHS in west Hertfordshire

Herts Valleys Clinical Commissioning Group (HVCCG) is the main commissioner for NHS services in

west Hertfordshire. It has defined four localities for its west Hertfordshire catchment area, which have

a combined population of around 630,000:

Dacorum

Watford and Three Rivers

St Albans and Harpenden

Hertsmere

EXECUTIVE SUMMARY


2

WHHT is the only acute hospital trust in west Hertfordshire. It currently provides acute services from

three hospital sites:

Watford General Hospital (WGH) – This is the biggest of WHHT’s sites and is the main site for

emergency and specialised care.

St Albans City Hospital (SACH) – This is WHHT’s elective care centre.

Hemel Hempstead Hospital (HHH) – A decision has been taken by the Your Care, Your Future

programme to redevelop this as a local health facility. It is therefore out of scope for this SOC.

West Hertfordshire residents also access acute hospital services in neighbouring areas including the

Royal Free Hospitals NHS Foundation Trust, Luton and Dunstable NHS Foundation Trust, East and

North Herts NHS Trust and Buckinghamshire Healthcare NHS Trust.

Strategic context

There is national recognition that the NHS is currently facing significant challenges, and that change

is required to ensure the best possible health and social care services can be delivered in a way that

is sustainable for the long term. The Five Year Forward View set out the scale of these challenges at

the national level and described the transformation in health and social care provision which would be

necessary to address them. Sustainability and Transformation Plans (STPs) are now being developed

to deliver this transformation at the regional level.

In west Hertfordshire, The Your Care, Your Future review was launched in November 2014 and was

designed to align with the recommendations of the Five Year Forward View. It involved NHS

organisations in west Hertfordshire working together with Hertfordshire County Council (HCC), GPs,

other stakeholders, patients and public representatives to consider the health and social care needs

of the population now and in the future. Its vision, based on extensive feedback, is to ensure that

more people can access care and support in local communities, rather than having to travel to

hospital unnecessarily. It also aims to ensure patient care is joined-up and better coordinated.

The Your Care, Your Future programme is now part of the STP for the Hertfordshire and west Essex

footprint. The October STP submission, which has now been published1, sets out how the health and

care organisations across the area will work closely with residents of all ages to support them to live

as healthily and independently as possible, encouraged and empowered by health, social care,

community and voluntary services, all working together.

WHHT strategy

WHHT has recently developed a clinical strategy (the Trust Strategy) that fully aligns with the

principles set out in Your Care, Your Future and the Hertfordshire and west Essex STP. It sets out

WHHT’s vision to provide the very best care for every patient, every day and describes three

priorities:

Deliver more care locally

Strengthen core services

Provide specialist care as appropriate

WHHT has undertaken a significant programme of service and estate reconfiguration in the last few

years:

SACH has been developed into a dedicated centre for elective surgery, with a range of supporting

outpatient and diagnostic services.

Emergency care has been centralised at WGH, with A&E and inpatient services transferred from

HHH. This was enabled through the development of a new Acute Admissions Unit (AAU) at WGH

to provide an innovative model of care and to accommodate an almost doubling of emergency

activity.

1 www.healthierfuture.org.uk


3

The acute service offering at HHH includes urgent care, endoscopy, radiology, outpatient clinics

and a small number of intermediate care beds.

Only a modest investment was made in order to facilitate the transfer of A&E and inpatient services

from HHH to WGH and the additional capacity was provided in temporary buildings as a short term

solution. It was WHHT’s intention to make further investment in the WGH estate to provide the

required capacity on a more permanent basis. This investment was not made, however, and is now

urgently required. The proposed transformation of acute services represents the next logical step to

enable WHHT to provide the range of acute services required by the population of west Hertfordshire

from a fit for purpose estate, providing financial and clinical sustainability for the long term.

The Watford Health Campus project is an ambitious long-term scheme aimed at regenerating an area

of west Watford adjacent to the hospital site, whilst also providing an opportunity to develop the

current healthcare facilities to meet the future needs of the population. Pressure is increasing on

WHHT to confirm their future plans for WGH in order to allow business plans to be developed for the

adjacent areas.

Case for change

The Your Care, Your Future programme has established a compelling case for change for the health

economy of west Hertfordshire. This falls into three themes:

Changing population needs – there is a rapidly ageing population, an even faster growing

younger population and increasing cultural diversity. More people are also living with one or more

long term conditions. The health economy must therefore adapt to meet these changing needs and

ensure the health inequalities which currently exist – both within west Hertfordshire and as

compared with other areas nationally – are addressed.

Quality – Increasing A&E attendance and emergency admission rates are placing pressure on

acute services and many patient cohorts stay in hospital longer than the national average.

Providers are therefore finding it more and more difficult to achieve the required clinical standards

and maintain service quality.

Sustainability – Providers are generating deficits at an increasing rate and the workforce is under

pressure, with gaps emerging both nationally and locally. Health services are therefore at risk of

becoming clinically and financially unsustainable.

More specifically for acute hospital services, WHHT needs to address significant issues with its estate

if it is to support delivery of the future model of care proposed by the Your Care, Your Future

programme and deliver sustainable, high quality acute care into the future. Investment is required to

address three main issues:

Providing capacity to meet changing demand

Addressing functional suitability issues and enabling service redesign

Mitigating risk to business continuity

Capacity to meet changing demand

As outlined above, the needs of the population of west Hertfordshire are changing. The Your Care,

Your Future programme is seeking to address these changes by delivering a future model of care in

which more care will be delivered closer to home. These interventions will decrease both the demand

for acute services and the length of stay of patients once they have been admitted.

The scale of population growth and changing needs mean, however, that acute services in west

Hertfordshire will need additional capacity over the next 20 years if they are to meet demand. Acute

hospital services must adapt to meet the new model of care, and the estate from which it is delivered

must be developed to ensure it has the right capacity, in the right areas, to meet changing demand.


4

Functional suitability

The WHHT estate does not meet the current NHS building standards expected for acute hospitals.

When compared with standard NHS requirements2:

Only 10% of the WHHT inpatient bed base is in single rooms, against a standard of 50%.

The inpatient ward areas across all WHHT sites are based on six bedded bays, against the current

standard of four bedded bays, and these are almost half the required size.

The neonatal unit is only 30% of the required size.

The delivery suite rooms are only 44% of the required standard.

Further specific examples demonstrating the poor functional suitability of the WHHT estate include:

The only link between the main clinical buildings in WGH is via an underground service corridor

and is dependent on a single lift, such that patients transiting between the Women’s and Children’s

Services (WACS) building and the main operating theatres share the corridor with domestic and

clinical waste, stores deliveries and catering services.

The very high occupancy rate of around 97% for inpatient beds leave no capacity to absorb

additional patients during periods of peak demand, meaning that during the busiest times the

corridors around the emergency department have to be re-designated as clinical areas.

Many of the buildings have reached end of life and are no longer fit for purpose. Even with major

refurbishment they could not be considered suitable for clinical services.

There is an overreliance on temporary buildings to deliver some aspects of clinical care, impacting

on the clinical and financial efficiency of the hospital, the patient experience and quality of care

available.

There is a severe shortage of appropriate ancillary and supporting facilities including, for example,

waste disposal, linen storage and staff rest facilities. This adversely impacts on operational

efficiency and staff and patient experience.

These failings have a significant impact on patient experience and major improvements are required

across WHHT’s estate if it is to meet patient expectations, support delivery of safe, effective care, and

provide flexibility to adapt to changing practices into the future.

Risk to business continuity

The WHHT estate has suffered from historic underinvestment and so now over 68% of WHHT’s total

estate, and 80% of the WGH site, is assessed to be in ‘poor’ condition or worse and backlog

maintenance is estimated at over £100m.

The poor condition of the estate has resulted in a significant risk to business continuity, with a number

of serious incidents occurring over the last year:

Closures or restrictions of use for operating theatres at WGH and SACH due to failures of

ventilation systems.

Loss of beds or clinical activity due to water ingress following heavy rainfall or failures in water

distribution pipework (frequent at all sites).

Frequent sewage ingress into clinical areas (Emergency Department, WACS and Radiology at

WGH) due to failures of wastewater system.

Road collapse outside main entrance at WGH due to failure of underground duct.

Failures in steam distribution pipework leading to frequent loss of heating and hot water in clinical

areas, particularly across WGH site.

To date, WHHT’s reactive maintenance capability has been successful in limiting the impact of the

majority of these failures on patients’ clinical outcomes, although their experience may have been

2 Health Building Note (HBN) 04-01 (2013)


5

unsatisfactory. There are currently over 1,000 reactive maintenance call-outs per month at the WGH

site. This position is unsustainable as the number of significant infrastructure failures increases; it is

now at least weekly and patient safety will be put at risk if nothing is done.

The estate must now be improved to minimise these risks and allow best value for money to be

gained from future investment, maintaining the estate to the required standard rather than simply

patching it up.

Investment objectives

To address the case for change, the acute transformation across west Hertfordshire has the following

investment objectives:

Provide the range of acute emergency, specialist and planned hospital services required by the

population of west Hertfordshire now and in the future, addressing changing population needs and

advances in healthcare.

Improve joined-up working with primary, community, mental health, and social care providers to

maintain patient stability and prevent escalation to more acute levels of care.

Optimise the location(s) from which services are provided to ensure the best use of available

workforce whilst maintaining access to specialist care.

Meet clinical quality standards expected for all services, including specialist services such as

cancer and emergency stroke and vascular.

Provide services from a fit for purpose estate which meets current building standards/regulations,

with flexibility to support future changes in working practices.

Ensure best use of resources to achieve long term financial sustainability for WHHT.

Scope

The Your Care, Your Future SOC confirmed the reconfiguration of services required in order to deliver

the future model of care. The scope of this SOC is limited to the acute transformation required in

order for WHHT to support the reconfiguration of services established by the Your Care, Your Future

programme. It is focused on the estate configuration necessary to provide the required acute hospital

services under the future model of care and the works required to achieve this. HHH is out of scope of

this SOC as the Your Care, Your Future programme has identified a requirement for a local health

facility at Hemel Hempstead. A separate SOC, running in parallel to and informed by the acute

transformation work, will consider the requirements of the local health facility and identify the potential

development options for the HHH site under the Your Care, Your Future programme. WHHT is

committed to ensuring an appropriate local service offer at HHH.

A clinical service model for acute hospital services has been agreed and this underpins all options. It

consists of a single emergency and specialised care site and a single, separate planned care surgical

site, which may or may not be co-located.

Main benefits

The proposed acute transformation is anticipated to deliver the following benefits:

Improved safety and better clinical outcomes for patients as a result of a fit for purpose estate

with sufficient capacity to meet demand, designed for modern clinical practices and able to

optimise efficiencies and clinical adjacencies.

Improved patient experience due to improved facilities which meet modern building standards.

Improved operational performance and lower risk to business continuity as a result of

modern, well-maintained infrastructure.

A more attractive workplace for employees due to improved facilities, designed for modern

clinical practices.


6

Reduced operational costs for WHHT as a result of efficiency improvements, a reduced reliance

on agency staff and reduced spend on emergency estate works.

Economic Case

Long list of options

The options for acute transformation vary across three separate dimensions:

The location of the emergency and specialised care site

The location of the planned care site

Build options for both sites

Combining the available options against each of these three dimensions leads to a long list of 14

options, as outlined in Table 1.

Table 1: Long list of options

# Emergency and specialised care site Planned care site

1 Central greenfield site New build Central greenfield site New build

2 Central greenfield site New build Watford General Hospital New build

3 Central greenfield site New build Watford General Hospital Redevelop

4 Central greenfield site New build St Albans City Hospital New build

5 Central greenfield site New build St Albans City Hospital Redevelop

6 Watford General Hospital New build Watford General Hospital New build

7 Watford General Hospital New build Watford General Hospital Redevelop

8 Watford General Hospital Redevelop Watford General Hospital New build

9 Watford General Hospital New build St Albans City Hospital New build

10 Watford General Hospital New build St Albans City Hospital Redevelop

11 Watford General Hospital Redevelop St Albans City Hospital New build

12 Watford General Hospital Redevelop St Albans City Hospital Redevelop

13 Watford General Hospital Refurbish St Albans City Hospital Refurbish

14 Watford General Hospital Backlog only St Albans City Hospital Backlog only

These options have been assessed by a series of expert panels to identify any which could be ruled

out without the need for more detailed analysis. The non-financial criteria used were:

Access – The extent to which the option will impact (positively or negatively) on travel times.

Patient experience – The extent to which the option is likely to meet building regulations, provide

flexibility for the future and ease of maintenance.

Deliverability – The extent to which the option is likely to be successfully implemented within the

required timeframe, without undue impact on business continuity.


7

Strategic alignment – The extent to which the option aligns with relevant local and national

strategies, addresses the case for change and has broad stakeholder support.

The outputs from this assessment are shown in Table 2.

Table 2: Non-financial scores

Option Access Patient

Experience Deliverability

Strategic

Alignment Overall

Rank for

overall score

1 3.5 5.0 3.8 4.7 4.2 1

2 3.6 5.0 3.1 4.3 4.0 4

3 3.6 4.6 2.7 4.3 3.8 8

4 3.3 5.0 3.0 4.7 4.0 2

5 3.3 4.6 3.0 4.7 3.9 6

6 3.5 5.0 3.8 3.3 3.9 5

7 3.5 4.6 2.8 3.3 3.5 10

8 3.5 3.6 3.0 2.7 3.2 12

9 3.3 5.0 3.1 4.7 4.0 3

10 3.3 4.6 2.7 4.7 3.8 7

11 3.3 3.6 3.0 4.3 3.5 9

12 3.3 3.1 2.8 4.3 3.4 11

13 3.3 2.0 2.3 2.7 2.6 13

14 3.3 1.1 1.5 1.3 1.8 14

A stakeholder panel reviewed the outputs from this non-financial analysis and decided that eight

options should be taken forward for more detailed economic and financial analysis:

Options 13 and 14 should be combined to form the ‘Do Minimum’ option

There was consensus from stakeholders that both Options 13 and 14 failed to meet an acceptable

threshold; neither would be able to address the case for change and meet the stated investment

objectives. It was recognised, however, that a ‘Do Minimum’ option should be taken forward for more

detailed analysis for the purposes of comparison. It was agreed that the true ‘Do Minimum’ position, to

ensure hospital services can continue to be delivered safely and also provide sufficient capacity to

accommodate the forecast growth in demand, would be a combination of Options 13 and 14.

Options 2, 4, 9 and 11 should be ruled out

It was agreed that no option should be taken forward if it would cost substantially more to implement

than an alternative option, but would offer little additional benefit. It was also agreed that the build type

could be used as a proxy for implementation cost as new build would cost more than redevelopment,

which would in turn cost more than refurbishment. The panel agreed that co-locating the planned care

site with the emergency and specialised care site would lead to benefits as a result of clinical

synergies and operational efficiencies. If a new build planned care site was pursued, requiring a

greater capital investment than a redevelopment option, then it should be co-located with the


8

emergency and specialised care site in order to maximise the benefits achieved through this

investment. It was agreed that any option involving a new build planned care site which was not co-

located with the emergency and specialised care site should therefore be ruled out (Options 2, 4, 9

and 11).

Options 7 and 8 should be combined into a single option

It was also agreed that Options 7 and 8 are very similar, and that in reality, if a combination of new

build and redevelopment on the Watford site was pursued, the optimum configuration would be

chosen to make the best use of existing buildings to meet requirements. An option combining both of

these should therefore be taken forward.

Summary of options appraisal

Table 3 shows the short list of options taken forward for more detailed economic and financial

analysis as a result of the long list analysis outlined above.

Table 3: Short list of options


1 Greenfield New build Greenfield New build

3 Greenfield New build WGH Redevelop

5 Greenfield New build SACH Redevelop

6 WGH New build WGH New build

7 / 8 WGH New build / Redevelop WGH New build / Redevelop

10 WGH New build SACH Redevelop

12 WGH Redevelop SACH Redevelop

13 / 14 WGH Refurbish / Backlog SACH Refurbish / Backlog

Economic and financial analysis has been undertaken on this list of options to assess two further

evaluation criteria:

Value for money – The balance of costs against financial savings, measured by the Equivalent

Annual Value (EAV), combined with the non-financial scores to demonstrate overall value for

money.

Affordability – The level of capital investment required to implement the option and impact on

WHHT’s long term financial sustainability.

Value for money

A cost-benefit appraisal of the short-listed options has been conducted in accordance with HMT

Green Book guidance3 to calculate the EAV for each option. This shows the net benefit per year of

owning and operating the new asset in comparison to the baseline position. The table below shows

both the EAV and the overall non-financial score for each short-listed option to demonstrate overall

value for money.

3 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/220541/green_book_complete.pdf

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/220541/green_book_complete.pdf


9

Table 4: Value for money summary

Option Non-financial score EAV / £m

1 4.2 4.3

3 3.8 4.1

5 3.9 3.7

6 3.9 9.1

7 / 8 3.4 6.5

10 3.8 8.8

12 3.5 5.9

13 / 14 2.3 0.5

This shows that Options 6 and 10 offer best overall value for money as they have relatively high EAVs

and high non-financial scores. Options 7/8 and 12 have lower EAVs and lower non-financial scores.

Options 1, 3 and 5 have similar non-financial scores to Options 6 and 10, but much lower EAVs.

Option 13/14 offers worst overall value for money as it has a very low EAV and a very poor non-

financial score.

Affordability

Table 5 sets out a variety of metrics used to test the affordability of each of the options.

Table 5: Affordability summary

Option Total capital

spend

£m (16/17

prices)

Total capital

spend

£m (nominal)

Max capital in

single year

£m (nominal)

Year in which

WHHT will

return to

surplus

Cumulative deficit

before reaching a

surplus £m

(from 16/17)

1 802 1,040 351 2033/34 -392

3 812 1,074 300 2033/34 -366

5 789 1,020 299 2031/32 -369

6 644 762 250 2029/30 -330

7/8 534 710 94 2033/34 -340

10 641 764 238 2027/28 -310

12 565 736 88 2031/32 -340

13/14 290 343 106 2030/31 -297

With current assumptions, WHHT would return to a surplus position earliest under Option 10, closely

followed by Option 6. This is because these options could be implemented most quickly. The

greenfield options, Options 1, 3 and 5 would take longer because of the time it would take to provide

the required utilities and access to the site, resulting in a longer implementation period. WHHT would

also take longer to return to a surplus position under Options 7/8 and 12 because of the phased


10

implementation necessary for these options. The anticipated financial benefits of these options are

also lower than full new build options. While Option 13/14 would allow WHHT to return to a surplus

position by 2030/31, as mentioned above, significant further investment would be required after 30

years in order to ensure WHHT could continue to deliver services safely.

Preferred way forward

It is proposed that all greenfield options (Options 1, 3 and 5) should be ruled out on grounds of both

affordability and value for money:

The capital investment required for these options is at least a third higher than all other options

considered.

The amount of capital investment required within a single year is also much higher, which is likely

to make it prohibitively difficult to finance.

It is unlikely that this level of investment would be financially sustainable for WHHT in the long

term; it would significantly delay WHHT’s return to a surplus position.

Options 1, 3 and 5 offer lower value for money than most other options considered; the additional

benefits they bring are not sufficient to justify the extra cost and additional risk involved.

The preferred way forward is therefore for acute hospital services to continue to be provided from

WHHT’s existing estate at Watford and St Albans:

The options analysis process has shown that Options 6, 7/8, 10 and 12 each have positives and

negatives. Options 6 and 10 offer the best overall value for money and result in a positive impact

on WHHT’s long term financial sustainability, but they have a higher capital requirement than

Options 7/8 and 12 and are therefore less affordable in the short term.

The non-financial assessment shows, however, that Options 6 and 7/8 scored particularly poorly

against the Strategic alignment criterion. This is because these options involve all acute hospital

services being delivered from the WGH site. This approach offers less flexibility for the future and

has very poor stakeholder support. The Your Care, Your Future programme has also made

commitments to have a local health facility on the SACH site.

On this basis, given the similarity on overall value for money and affordability of Options 6 and 10,

and also Options 7/8 and 12, it is proposed that the preferred way forward is for the WGH site to

continue to be the location of emergency and specialised care and for the SACH site to

continue to be the location of planned care, i.e. either Option 10 or 12. The amount of surgery to

be undertaken on the SACH site will, however, continue to be reviewed to ensure that best value for

money can be achieved.

Option 13/14 should be carried forward for the purposes of comparison only:

As described in Section 3.4.5, the non-financial appraisal of the options has shown that Option

13/14, the Do Minimum option, would significantly impede patient experience and would bring

considerable deliverability challenges.

It is not able to address the case for change and would not deliver the stated investment objectives

for acute transformation. It is therefore proposed that this option is rejected at this stage, and

carried forward to OBC stage for the purposes of comparison only.

At OBC stage more detailed design work will be undertaken to establish the implementation approach

which is best able to balance value for money and affordability. This is likely to balance new build with

redevelopment and refurbishment of existing buildings, aiming to achieve as close to new build as

possible to ensure the best possible patient experience, with early benefits realisation.

Based on the preferred way forward, further analysis will be undertaken on the following short list of

options to identify a preferred option:

Option 10 – New build emergency and specialised care at WGH site and redevelop planned care

at SACH site.


11

Option 12 – Redevelop emergency and specialised care at WGH site and planned care at SACH

site.

Option 13/14 – Do minimum refurbishment of emergency and specialised care at WGH site and

planned care at SACH site (for comparison only)

Commercial Case

Required services

A range of services will be required to successfully implement the proposed acute transformation.

These will differ during the different stages of the project’s lifecycle:

Specialist advice – such as financial, legal, technical and project management, to support WHHT

during the business case development and procurement process.

Design – to design the redeveloped estate in support of the preferred option.

Build – to undertake the proposed construction works.

Finance – to fund the proposed works and transition activities.

Maintain – to maintain the estate once redeveloped, including both hard and soft facilities

management services.

Operate – to provide acute hospital services from the redeveloped estate, in line with the clinical

service model agreed under the Your Care, Your Future programme.

The available commercial delivery options for the required services are inextricably linked to the

chosen financing route, and so the two must be considered in tandem.

Sources of finance

There are two main financing routes available to WHHT:

Public finance, likely to be in the form of Public Dividend Capital (PDC)

Private finance, likely to be in the form of Private Finance 2 (PF2), subject to value for money

considerations

The 2015 Spending Review set the level of capital available to the NHS and recently published NHSI

guidance4 confirms that while revenue spending is increasing in real terms, capital expenditure is

more constrained. Access to Department of Health (DH) capital financing is therefore more restricted

than in previous years. Given the current constraints around public sector capital, PDC is highly

unlikely to be available for the level of investment required by WHHT to fund the entire acute

transformation. A Public Private Partnership (PPP), in the form of PF2 and structured to ensure the

private sector takes on an appropriate level of risk, is likely to be required to fund at least some of the

necessary capital investment. A mix of funding solutions may be appropriate, with different sources

used for different elements of the transformation programme in order to align with different risk

profiles.

Commercial delivery models

At this stage it is not possible to confirm the most appropriate commercial approach to source the

required services as there is still uncertainty around the exact design of the preferred option and

market appetite to take on risk around the proposed redevelopment works. The likely combination of

public and private finance may mean that a Strategic Estates Partnership (SEP), in which WHHT

procures a private sector partner or consortium to manage large parts of its estate and support its

plans for capital development, is an appropriate commercial delivery model. For additional services

required that fall outside of this arrangement, existing contracts and relationships may be exploited.

4 https://improvement.nhs.uk/resources/capital-regime-investment-and-property-business-case-approval-guidance-nhs-trusts-

and-foundation-trusts/


12

The following actions will be undertaken at OBC stage to confirm the commercial approach which will

offer best value for money:

Engagement with NSHI and DH to understand the likely availability of PDC as well as the

budgetary treatment and appetite around PPP/PF2 arrangements and SEPs.

Soft market testing with potential funders and developers to test risk appetite.

Commercial options, and associated financing routes, will be assessed as part of the Economic

Case within the OBC, to assess which offers the optimum balance of costs, benefits and risk

transfer.

Financial Case

Financial appraisal

For the purposes of the financial analysis, it is assumed Option 10 will be pursued as this is the option

within the preferred way forward that offers best value for money. The headline outputs for Option 12

are also provided for comparison.

Capital investment

The total upfront expenditure associated with the proposed acute transformation under Option 10 is

currently estimated to be £534m in today’s prices, exclusive of any VAT incurred. This is built up as

follows:

Redevelopment of WGH site (£464m)

– £265m for construction costs

– £95m for equipment and fees

– £13m for transition costs

– £90m adjustment for optimism bias (25%)

Redevelopment of SACH site (£71m)





If no VAT were recoverable on any of this investment, it would add a further £107m (£93m for WGH

and £14m for SACH).

The majority of the capital investment would be spent during a three year build phase at the start of

the scheme with the maximum annual investment required within a single year being £238m (once

adjusted for inflation).

If Option 12 were pursued, total upfront expenditure would be £471m in today’s prices, exclusive of

any VAT incurred. The maximum annual investment for Option 12 would be £88m (adjusted for

inflation).

Revenue implications

There will be a decrease to WHHT’s estate running costs as a result of the proposed works. The new

annual estates running costs are estimated to be £14m (at 16/17 prices) for Option 10, in comparison

to the current estimated annual spend of £20m today. The new estate running costs for Option 12

would also be £14m (at 16/17 prices).

The investment in the estate will also allow WHHT to significantly increase its Cost Improvement

Programmes (CIPs). WHHT’s current CIPs are assumed to deliver annual efficiencies of 4% until

21/22, in line with planning for the STP period, but will then drop to 2.5%. Improvements to the estate

are necessary for WHHT to deliver additional annual efficiencies as a result of improvements to the


13

layout of the estate, the internal design within departments and the latest technology to support a

digital hospital. These improvements will result in improved patient flow and increased workforce

productivity, leading to additional annual efficiencies of 2.5-3%.

Impact on WHHT’s annual net surplus / deficit position

With current assumptions, pursuing the proposed acute transformation is estimated to result in WHHT

achieving a surplus position by 2027/28 for Option 10 and 2031/32 for Option 12.

Management Case

Acute transformation project management arrangements

Following the approval of this SOC WHHT will mobilise a project team, committing the necessary time

and resources for a project of this size and scale. An Acute Transformation Board, co-chaired by the

clinical sponsor and Senior Responsible Owner (SRO), will meet monthly. It will be accountable for

successful delivery of the acute transformation within budget and for the realisation of the anticipated

benefits. This Board will be accountable to WHHT’s Finance and Investment Committee and Trust

Executive Committee (TEC), which are both accountable to the WHHT Board.

The acute transformation is part of the Your Care, Your Future programme. The Acute Transformation

Board will therefore also report progress to the Your Care, Your Future Programme Executive Group

and the Hertfordshire and west Essex STP, which are both accountable to the boards of all partner

organisations, most notably HVCCG.

Project milestones

The main milestones for the acute transformation, along with the dates by which they are anticipated

to be achieved, are outlined in Table 6. It should be noted, however, that these dates may vary

depending on the choice of preferred option confirmed in the OBC.

Table 6: Milestones

Milestone Anticipated date

SOC approved September 2017

Outline planning application submitted January 2018

Outline planning permission obtained June 2018

OBC submitted July 2018

Output specification developed and tender documentation complete September 2018

OBC approved January 2019

FBC submitted Autumn 2019

FBC approved Spring 2019

Construction begins FY 2019/20

Construction ends Option 10: FY 2023/24

Option 12: FY 2029/305

5 Option 12 would be in implemented in a phased development, with some benefits delivered from 2022/23


14

Once the preferred option has been defined, consideration will be given to whether the proposed

acute transformation should be separated into separate projects with separate business cases.

Some enabling works have already been identified that will be required on the WGH site under all

options within the preferred way forward. Once this SOC has gained approval, these will therefore be

implemented subject to their own business case approvals processes. These are:

Pathology services – In line with Carter recommendations, WHHT is currently considering the

future delivery of its pathology services. This SOC assumes that there will be a requirement for

some on-site pathology provision (a ''hot lab'') but that the majority of the pathology services can

be provided from an off-site location. The current facilities and equipment at WGH are not fit for

purpose and will require substantial investment to modernise. WHHT is therefore undertaking a

formal options appraisal process to determine how best to provide the pathology services it needs

to support health care in the 21st century. No decisions have been made regarding the outcome of

this process, but it is likely that any associated capital investment will need to be sourced through

a commercial partnership (there are many ways to do this, including a lease/managed equipment

service, private finance (PF2) or a fully outsourced model). As such the capital costs associated

with modernising pathology are not included within this SOC. Moving pathology services from their

current location on the WGH site, retaining core 'hot lab' functions on-site, will allow this area to be

redeveloped as part of the acute transformation.

Car park – In order to allow maximum flexibility for redevelopment of the WGH site, WHHT is

considering alternative solutions for the provision of car parking spaces, including a multi-storey

solution. Only half of the space currently used for car parking on the site is owned by WHHT and

the remaining area is owned by Watford Borough Council and is required for the Watford Health

Campus development. The current arrangements are also sub-optimal as the car park is on a

steep hill and far away from clinical services. Urgent implementation of the preferred option is

required to meet Watford Health Campus timescales and to meet operational requirements.

Conclusion

This SOC has confirmed that there is a compelling case for acute transformation in west Hertfordshire

in support of the Your Care, Your Future programme and the Hertfordshire and west Essex STP. The

current estate does not provide the required capacity to meet the demands of the changing

population, it suffers from functional suitability issues and presents a significant risk to business

continuity, which will put patient safety at risk if nothing is done.

A wide range of options has been considered and the proposed preferred way forward of continuing

to provide acute hospital services from WHHT’s existing estate at Watford and St Albans offers best

value for money subject to affordability constraints. It is likely that the preferred approach would

balance new build with redevelopment and refurbishment of existing buildings to provide the best

value for money; aiming to achieve as close to new build as possible to ensure the best possible

patient experience. This is likely to be achieved as a phased redevelopment over time.

Potential commercial delivery options for the preferred way forward have been considered and

appropriate project management arrangements are being put in place. The project is therefore ready

to move to the next stage, and begin detailed analysis to confirm the preferred option and supporting

commercial delivery model.


15

CONTENTS

EXECUTIVE SUMMARY 1

Introduction 1

Strategic Case 1

Economic Case 6

Commercial Case 11

Financial Case 12

Management Case 13

Conclusion 14

INTRODUCTION 18

Background 18

Purpose of this document 18

Structure and content of this document 18

STRATEGIC CASE 19

Strategic context 19

Case for change 27

Investment objectives 36

Scope 36

Main benefits 39

Strategic risks, constraints and dependencies 40

Conclusion 42

ECONOMIC CASE 43

Your Care, Your Future options appraisal 43

Evaluation criteria 43

Long list of options 45

Non-financial appraisal 47

Short-listed options 53

Value for money 64

Affordability 70

Preferred way forward 72

COMMERCIAL CASE 74

Required services 74

Sources of finance 74

Commercial delivery models 76

Actions required at OBC stage to determine the appropriate commercial approach 78


16

FINANCIAL CASE 80

Financial appraisal 80

Funding sources 84

Affordability 84

Conclusion 87

MANAGEMENT CASE 88

Project management arrangements 88

Governance 89

Project plan and milestones 90

Outline risk management approach 92

Outline stakeholder management approach 92

Conclusion 93

APPENDICES 94

ASSUMPTIONS LOG 96

A.1 Demand assumptions 96

A.2 Capacity assumptions 110

A.3 Schedule of Accommodation 113

A.4 Financial assumptions 119

A.5 Estate assumptions 122

NON-FINANCIAL APPRAISAL 137

B.1 Access 137

B.2 Patient experience 139

B.3 Deliverability 142

B.4 Strategic alignment 144

B.5 Summary 147

ECONOMIC APPRAISALS 149

C.1 Introduction 149

C.2 Option 1 Equivalent Annual Value Breakdown 150




C.6 Option 7&8 Equivalent Annual Value Breakdown 154




FINANCIAL APPRAISALS 158

D.1 Introduction 158

D.2 Capital costs 159


17

D.3 Option 1 Affordability 160




D.7 Option 7&8 Affordability 164




RISK REGISTER 168

ABBREVIATIONS 170


18

This is the Strategic Outline Case for the acute transformation element of the Your Care, Your Future programme. It establishes the need for investment in West Hertfordshire Hospitals Trust’s estate and seeks approval to conduct a more detailed analysis of a short list of options within the recommended preferred way forward.

Background

NHS organisations in west Hertfordshire, working together with Hertfordshire County Council (HCC),

launched the Your Care, Your Future review in November 2014. Since then the programme has

established a case for change and a proposed vision for a new model of care across the area. Your

Care, Your Future is now part of the Sustainability and Transformation Plan (STP) for Hertfordshire

and west Essex.

The future model of care will deliver more care closer to home, but acknowledges that emergency

acute and more specialist planned care services must be centralised where necessary to ensure they

can be delivered to high standards in an efficient manner. West Hertfordshire Hospitals Trust’s

(WHHT’s) estate infrastructure is very poor and unable to meet the future acute health care needs of

local residents.

Purpose of this document

This is the Strategic Outline Case (SOC) for the acute transformation element of the Your Care, Your

Future programme. It is focused on the estate configuration necessary to provide the required acute

hospital services under the future model of care and the works required to achieve this.

The main purpose of this document is to establish the need for investment in WHHT’s estate; to

appraise the main options for transformation; and to outline a preferred way forward for further

analysis.

Specifically, this SOC seeks approval to conduct a more detailed analysis of the short list of options

within the recommended preferred way forward and move to the next stage of the business case

development process.

Structure and content of this document

This SOC has been prepared using the agreed standards and format for business cases set out in

Her Majesty’s Treasury (HMT) Green Book and guidance developed by NHS Improvement (NHSI). It

is formatted using the five case model, comprising:

The Strategic Case: setting out the strategic context and the case for change, together with the

supporting investment objectives for the scheme.

The Economic Case: setting out the available options and establishing the preferred way forward.

The Commercial Case: outlining the commercial strategy for the project.

The Financial Case: confirming the funding arrangements and affordability.

The Management Case: demonstrating that the scheme is achievable and can be delivered

successfully to cost, time and quality.

The following sections provide the evidence for each of these five cases in turn.

INTRODUCTION


19

This Strategic Case sets out the strategic context for acute transformation in west Hertfordshire, part of the Your Care, Your Future programme and an integral contribution to Sustainability and Transformation Plan for Hertfordshire and west Essex. It outlines a compelling case for change, the resulting investment objectives for the project and the main benefits, risks, constraints and dependencies.

Strategic context

2.1.1 Overview of the NHS in west Hertfordshire

Local population

Herts Valleys Clinical Commissioning Group (HVCCG) has defined four localities for its west

Hertfordshire catchment area,

which have a combined population

of around 630,000:

Dacorum

Watford and Three Rivers

St Albans and Harpenden

Hertsmere

The area is relatively affluent, with

only 3.5% households deprived in 3

or 4 of the deprivation dimensions

of Employment, Education, Health

and disability, and Household

overcrowding defined by the Office

for National Statistics (ONS). This

compares to a figure of 5.7%

nationally. There are, however, differences between the localities. For example, life expectancy differs

by up to ten years between districts: It is 76.4 years in Borehamwood compared with 87.9 years in

Chorleywood West.

West Hertfordshire has a lower prevalence of physical health long term conditions (chronic obstructive

pulmonary disease, cardiovascular disease, diabetes, cancer, coronary heart disease, stroke and

chronic kidney disease) compared with both peer performance and the national average, but has a

marginally higher prevalence of mental health problems and learning disabilities compared with its

peers. The area generates the following activity each year:

Herts Valleys Clinical Commissioning Group

HVCCG is the main commissioner for NHS services in west Hertfordshire. It has a budget of about

£750m that it spends on community, hospital and mental health services. It jointly commissions some

STRATEGIC CASE


20

services, such as mental health, NHS 111 and the GP out-of-hours service, in partnership with HCC

and East and North Hertfordshire CCG.

NHS England

NHS England commissions primary care and specialised services for west Hertfordshire. It

commissions the following services from WHHT:

Specialised vascular

Specialised cancer

Neo-natal critical care

Screening services, i.e. cytology and bowel screening

Dental/oral surgery

West Hertfordshire Hospitals NHS Trust

WHHT provides healthcare services to a core catchment population of approximately half a million

people living in west Hertfordshire and the surrounding area. In 2015/6 it provided 66% of non-

elective and 52% of elective activity commissioned by HVCCG. 90% of all activity provided by WHHT

was commissioned by HVCCG. WHHT also provides a range of more specialist services to a wider

population, serving residents of North London, Bedfordshire, Buckinghamshire and East

Hertfordshire, but no other single organisation commissioned more than 3% of WHHT’s activity in

2015/16.

In 2015/16, WHHT handled approximately:

39,000 emergency admissions

45,000 elective admissions

136,000 attendances at Accident and Emergency (A&E), Urgent Care Centre or Minor Injuries Unit

475,000 attendances at outpatient appointments

5,300 births

WHHT currently provides acute services from three hospital sites:

Watford General Hospital (WGH)

St Albans City Hospital (SACH)

Hemel Hempstead Hospital (HHH)

Information about the current service provision is provided in Section 2.2.1.

WHHT employs around 4,500 staff and is also supported by 450 volunteers. It has an annual income

of around £300m.

Other acute providers

This SOC is focused on the transformation of acute services provided by WHHT. However, a number

of other trusts also provide acute services to the population of west Hertfordshire. The four trusts from

which HVCCG commissioned the most activity, apart from WHHT, in 2015/16 were:

Royal Free London NHS Foundation Trust (11% of non-elective and 15% of elective activity)

Luton and Dunstable Hospital NHS Foundation Trust (7% of non-elective and 4% of elective

activity)

Buckinghamshire Healthcare NHS Trust (4% of non-elective and 4% of elective activity)

East and North Hertfordshire NHS Trust (4% of non-elective and 3% of elective activity)

These trusts are important stakeholders for the proposed acute transformation and so WHHT and

HVCCG will work closely with them to understand any potential impacts on them and involve them in

planning for implementation. More information on the stakeholder management approach can be

found in the Management Case, in Section 6.5.


21

2.1.2 National strategies

There is national recognition that the NHS is currently facing significant challenges, and that change

is required to ensure the best possible health and social care services can be delivered in a way that

is sustainable for the long term.

As described in the following sections, the Five Year Forward View set out the scale of these

challenges at the national level and described the transformation in health and social care provision

which would be necessary to address them. Sustainability and Transformation Plans (STPs) are now

being developed to deliver this transformation at the regional level.

NHS Five Year Forward View

NHS England published its Five Year Forward View6 in October 2014. It articulates why change is

needed, what that change might look like and how the NHS can achieve it.

The Forward View explains that the NHS is facing three fundamental challenges:

Patients’ health needs and personal preferences are changing – long term health conditions

are becoming more prevalent and many patients wish to be more informed and involved in their

own care.

Treatments, technologies and care delivery are changing – new treatments and technologies

are transforming our ability to predict, diagnose and treat disease while new care models are

challenging traditional boundaries of care delivery.

Funding growth for health services has changed – budget pressures mean that NHS spending

growth is unlikely to return to the 6%-7% real annual increases seen in the first decade of this

century.

The Forward View goes on to describe the action required to tackle three widening gaps:

Health and wellbeing – a new relationship is required with patients and communities, bringing a

focus on prevention and empowering patients to manage their own health though improved access

to information and greater support.

Care and quality – new care models are required which align with the characteristics of

communities, with an expansion of primary and ‘out-of-hospital’ care.

Funding and efficiency – action is required to reduce demand and improve efficiency, but

investment is necessary to support the rapid adoption of new care models proposed.

Sustainability and Transformation Plans

Building on the Five Year Forward View, in December 2015 the NHS published planning guidance

that outlined a new approach to help ensure services are built around the needs of local populations.

Every health and care system in England was asked to produce a five year STP, explaining how local

services would evolve and become more sustainable in order to deliver the Five Year Forward View

vision of better health, better patient care and improved NHS efficiency.

There are 44 STP ‘footprints’, within which health and care organisations must work together to

develop and deliver their plans. It was the intention that these footprints would be locally defined,

based on natural communities, existing working relationships, patient flows, taking account of the

scale needed to deliver the services, transformation and public health programmes required, along

with how they best fit with other footprints. As explained in more detail in Section 2.1.3, west

Hertfordshire forms part of the Hertfordshire and west Essex STP footprint.

Initial draft STPs were submitted in June 2016, with refined STPs submitted in October 2016, and

implementation has now begun.

6 http://www.england.nhs.uk/wp-content/uploads/2014/10/5yfv-web.pdf


22

2.1.3 Local strategies

Your Care, Your Future and the Hertfordshire and west Essex STP

Your Care, Your Future

The Your Care, Your Future review was launched in November 2014. It involved NHS organisations

in west Hertfordshire working together with HCC, GPs, other stakeholders, patients and public

representatives to consider the health and social care needs of the population now and in the future.

The Your Care, Your Future review was designed to align with the recommendations of the Five Year

Forward View. The situation in west Hertfordshire mirrors the national picture of local services

needing to adapt to a changing population with more complex health and social care needs. The

programme was established with a clear purpose: to consider what changes are needed to ensure the

people of west Hertfordshire have access to the best possible health and social care services that are

sustainable in future years. Its vision, based on extensive feedback, is to ensure that more people can

access care and support in local communities, rather than having to travel to hospital unnecessarily. It

also aims to ensure patient care is joined-up and better coordinated.

Since its inception, the Your Care, Your Future programme has made significant progress. An interim

Case for Change was published in spring 2015 and, following public consultation, the final version

was published in July 2015. The SOC for Your Care, Your Future was developed through

engagement with stakeholders from across the local health economy and was published in October

2015. This set out a future model of care which was underpinned by the following principles:

More effective prevention

An approach that seeks to maintain stability and prevent escalation to more acute levels of care

Delivering joined-up care more effectively

Rationalise and make sustainable acute services – to be delivered to high standards, efficiently in

modern facilities

More care delivered outside of major hospitals and closer to people’s homes

It set out four types of care:

Care you receive at home, particularly social care services that help you to live independently or

care that helps you get home quickly after a hospital stay.

Care from GP practices and other health and social care professionals that includes a team of

specialists able to support a range of care needs at a local level. Services will include district

nursing, social care, mental health, pharmacy and community care.

Care delivered in local community settings or ‘hubs’, offering services ranging from wellbeing

advice and signposting to voluntary sector support, through to services that might previously have

been offered in big hospitals, for example x-rays, physiotherapy, diagnostic tests, community beds

and some urgent care services.

Care delivered in larger centres, probably hospitals. These centres will offer services such as

A&E departments, specialised care for stroke and some cancer treatments, planned day case and

inpatient care, and diagnosis and treatment of complex conditions.

These four building blocks of the future model of care are illustrated in Figure 1.


23

Figure 1: Future model of care for west Hertfordshire

The Your Care, Your Future programme has already started to deliver real improvements for the

population of west Hertfordshire. For example:

GPs can access cardiology diagnostics such as echocardiograms and 24 hour electrocardiograms

from a community provider. Management plans are put in place for patients to be managed in the

community rather than traditional route of going to the hospital.

A community respiratory service has been established that has implemented innovative ways of

managing patients with sleep apnoea who can be monitored via telehealth in the community

setting rather going into specialist acute centres. The enhanced respiratory services builds on the

previous chronic obstructive pulmonary disease (COPD) service and works jointly with the acute

sector to pull patients out from acute services and also provides hospital at home supporting

patients to manage the exacerbations.

GPs are identifying patients at risk of diabetes, COPD and atrial fibrillation, and putting in place

enhanced care planning for these patients much earlier on with a view to reducing the prevalence

of these conditions.

Part of the wave 1 of the National Diabetes Prevention Programme, with patients identified at risk

of diabetes by GPs able to access a 12 week structured education programme, which also

provides follow up for six months. This is in addition to structured education programmes for

diagnosed patients.

Managing patients in crisis through integrated health (physical and mental) and social care has

been commissioned across three of the four localities with a view to prevention of admission.

Hertfordshire and west Essex STP

The Your Care, Your Future programme is now part of the STP for the Hertfordshire and west Essex

footprint. The October STP submission, which has now been published7, sets out how the health and

care organisations across the area will work closely with residents of all ages to support them to live

7 www.healthierfuture.org.uk

*Health and social care services will be provided to those

that are assessed as clinically requiring care at home.


24

as healthily and independently as possible, encouraged and empowered by health, social care,

community and voluntary services, all working together. This vision is based on three key

programmes of work:

Prevention – to improve health and wellbeing and reduce demand for services

Integrated primary and community services – to deliver more care closer to home and reduce

demand for hospital service

Acute hospital services – to support improved patient care, clinical and financial sustainability

and deliver services more efficiently.

Five priority areas for improvement have been identified by analysing the ways in which NHS and

social care resources are used in the footprint. These are:

Frailty services

Prevention and effective management of diabetes

Prevention and effective management of COPD

Preventing stroke and rehabilitating patients after stroke

Ensuring that mental and physical health are given equal priority

The STP recognises that the provision of acute services must be sustainable, and this will be

achieved by adopting a patient-centred, quality driven approach to optimising patient outcomes whilst

reducing hospital based activity, optimising use of all resources and removing avoidable cost. The

expertise of acute consultants will be exploited throughout patient pathways, such that face to face

consultations will only be required for those with the most complex needs. This will reduce the acute

estate required, but investment is required to ensure this estate is fit for purpose for the services

being delivered from this setting and that the patient experience is as positive as possible.

WHHT strategies

Clinical strategy

WHHT has recently developed a clinical strategy (the Trust Strategy) that fully aligns with the

principles set out in Your Care, Your Future and the Hertfordshire and west Essex STP. It sets out

WHHT’s vision to provide the very best care for every patient, every day and describes three

priorities:

Deliver more care locally

Strengthen core services

Provide specialist care as appropriate

It outlines activities that will help WHHT to address these priorities and achieve its mission of working

in partnership to deliver integrated care throughout life, as shown in Figure 2.

Acute transformation will be necessary for WHHT to deliver this clinical strategy completely, and to

support the introduction of new care models being designed by the Divisional Clinical Teams. The

capacity constraints and functional suitability issues are described further in Section 2.2.2.


25

Figure 2: Main elements of WHHT's clinical strategy

WHHT was placed in special measures in September 2015 following a Care Quality Commission

(CQC) inspection in April that year. The report particularly noted issues with WHHT’s estate, noting

that ‘facilities overall were in a poor state of repair and in some cases caused a potential risk to staff

and visitors’. Improvement work has been in progress since the inspection to strengthen the delivery

of safe, effective and compassionate care for patients across WHHT. A follow-up CQC inspection

took place in September 2016.

Partnership with Royal Free London Foundation Trust

The Royal Free London NHS Foundation Trust, as part of the national Five Year Forward View

Vanguard programme, is developing a group membership model that aims to promote stronger

clinical partnership working between hospitals. The model will support the development of more

consistent, best practice clinical care models that reduce unwarranted variation in pathways and

outcomes. The group model will also look at how the NHS can harness the opportunities provided by

new technologies and help secure greater efficiency in back office support services. WHHT is

exploring the possibility of becoming a member of the group model to help secure the very best,

sustainable clinical services for local residents.

The acute transformation in west Hertfordshire will need to take account of this partnership and the

potential rationalisation of services that may be delivered. However, the significant majority of WHHT

services serve a local population and any changes are expected to be relatively marginal, e.g.

specialist vascular. The clinical model and activity assumptions will continue to be refined throughout

the development of the Outline Business Case (OBC) and Full Business Case (FBC).

Previous service and estate reconfigurations

WHHT has previously undertaken a significant programme of service and estate reconfiguration:

SACH has been developed into a dedicated centre for elective surgery, with a range of supporting

outpatient and diagnostic services.

Emergency care has been centralised at WGH, with A&E and inpatient services transferred from

HHH in 2009. This was enabled through the development of a new Acute Admissions Unit (AAU)

at WGH to provide an innovative model of care and to accommodate an almost doubling of

emergency activity.

The acute service offering at HHH includes urgent care, endoscopy, radiology, outpatient clinics

and a small number of intermediate care beds.


26

Only a modest investment was made in order to facilitate the transfer of A&E and inpatient services

from HHH to WGH and the additional capacity was provided in temporary buildings as a short term

solution. It was WHHT’s intention to make further investment in the WGH estate to provide the

required capacity on a more permanent basis. This investment was not made, however, and is now

urgently required. The proposed transformation of acute services represents the next logical step to

enable WHHT to provide the range of acute services required by the population of west Hertfordshire

from a fit for purpose estate, providing financial and clinical sustainability for the long term.

Interim estates strategy

WHHT has developed an interim estates strategy that provides a plan for the development of the

WHHT estate over the period 2016-2021, driven by WHHT’s clinical strategy and providing the

foundations for the major redevelopment required to provide a sustainable long-term future. It

provides the bridge between the current ‘as is’ position and the ‘to be’ model recommended in this

SOC. The strategy sets out plans to use the available resources to provide for patients and staff the

best possible environment and facilities, ensuring that they are safe, fit for purpose and meet clinical

needs.

The estates improvement programme set out in the interim estates strategy is grouped under four

overarching projects:

Strategic development – strategic projects (including the proposed acute transformation) to

provide a sustainable environment for the delivery of acute clinical services over the long term.

Safe, efficient and fit for purpose estate – urgent works required over the next five years.

Care model development – works to support the introduction of new care models, in line with

Your Care, Your Future.

Major equipment – a prioritised life cycle replacement programme including all major equipment

and prioritised investment in new equipment.

The interim estates strategy describes the works required to ensure the estate remains safe and fit for

purpose during this period of acute transformation and ensure the estate remains viable and

sustainable in the event of a delay to its implementation. The strategy has been designed to align with

the recommendation from this SOC, to minimise the amount of nugatory investment as far as

possible.

Watford Health Campus

The Watford Health Campus project is an ambitious long-term scheme aimed at regenerating an area

of west Watford adjacent to the hospital site, whilst also providing an opportunity to develop the

current healthcare facilities to meet the future needs of the population. The scheme will be delivered

by Watford Borough Council (WBC) and WHHT, in partnership with the private sector, over a 15-20

year period. The formal Campus Agreement was jointly signed by WBC, WHHT and the Watford

Health Campus Partnership LLP on 18 June 2013. The Agreement commits WHHT to financial

obligations in order to support the infrastructure investment required to facilitate the wider

development of the area, including the hospital site. It also provides a framework for land transfers

and collaborative working across a range of activities. A supporting Collaborative Agreement signed

at the same time by WHHT and Kier Property Development Limited provides a contractual framework

that would allow both parties to work together on activities outside the main Agreement, including

works at other WHHT sites.

The Watford Health Campus seeks to deliver:

New business and work opportunities with premises and facilities to attract new businesses,

creating up to 1,300 new jobs.

750 new homes, including affordable homes.

Opportunity to develop Watford General Hospital to meet future healthcare needs of population.


27

Better access and modern infrastructure including a dedicated ‘blue light’ access route to Watford

General Hospital, better walking and cycling facilities, and a new London Underground station

(Watford Vicarage Road) within a short walking distance of the Health Campus.

Local community facilities, with a community hub forming the heart of the Campus.

Green, open spaces for the whole community, promoting environmental and sustainable solutions.

The project has already delivered a new access route to WGH (opened in November 2016) and work

has started on a new industrial estate and the first phase of the housing development. Pressure is

increasing on WHHT to confirm their future plans for WGH in order to allow business plans to be

developed for the adjacent areas. Following the outcome of a judicial review, the Farm Terrace

Allotments site is now confirmed within the project scope and so this provides an early opportunity to

address WHHT’s long-term car parking requirement, and therefore greater flexibility for development

of the WGH site.

A hybrid masterplan was approved by the planning authority in 2013, providing agreement in principle

for the development of WGH within the Health Campus boundary.

Case for change

2.2.1 Existing arrangements

As described in Section 2.1.1, WHHT currently operates three hospital sites:

Watford General Hospital

St Albans City Hospital

Hemel Hempstead Hospital

WHHT also provides small volumes of day case procedures, outpatient services and community

midwifery services from community and primary care premises throughout west Hertfordshire.

The following sections describe these sites and the services currently provided from them, with a

more detailed breakdown of current activity provided at Appendix A.

A “six facet” survey was undertaken in late 2012 and this provides some high level data regarding the

current estate. It is not comprehensive, however, and is believed to underestimate current backlog

maintenance requirements and compliance issues. A more detailed assessment is therefore now

required. A six facet survey of WHHT’s estate is currently underway and is aiming to complete in April

2017. This will be published once available.

Watford General Hospital

WGH is the biggest of WHHT’s sites. It is the main site for emergency and specialist care and

provides the following clinical services:

Women’s and children’s services, including a consultant-led delivery unit, midwife-led birthing unit,

antenatal and postnatal clinics, and neonatal critical care.

Emergency care, including A&E and an Acute Admissions Unit (AAU).

Ambulatory care unit, acute wards, Intensive Care Unit (ICU) and emergency surgery.

Planned care, including outpatients and complex surgery.

Medical care, including cardiology, care of the elderly, dermatology, endocrinology-diabetes,

gastroenterology, haematology, neurology, ophthalmology, oral maxiofacial, respiratory,

rheumatology and stroke.

Clinical support, including X-ray, CT, MRI, ultrasound, pathology, pharmacy, radiology,

physiotherapy, occupational therapy and dietetic services and mortuary.


28

Over 80% of the site is assessed to be in ‘poor’ or worse condition8, with 40% of the buildings over 40

years old. Investment in backlog maintenance over the last five years has been targeted on statutory

compliance (asbestos, legionella, ventilation systems and infection control) and on improving the

resilience of critical infrastructure (power supply, steam and pressures systems, lifts and fire). With

very limited funding to improve the condition, the estate has continued to deteriorate.

Figure 3: WGH site map

Clinical services are concentrated in the Princess Michael of Kent (PMoK) building, which houses the

emergency department as well as the majority of inpatients wards, the main theatre complex,

outpatients, ICU and radiology. The building fabric, utilities infrastructure and layout are poor creating

an unsatisfactory clinical environment and poor patient experience.

The Women’s and Children’s Services (WACS) building was constructed in the early 1960s and is no

longer fit for purpose as a clinical building. Investment over the last five years has focused on keeping

services delivered in the building ‘safe’, but even with major refurbishment the building cannot be

considered suitable for clinical services.

The Acute Admissions Unit (AAU) is a modular building. It was opened in 2009 to provide inpatient

services and facilitate the co-location of emergency services at WGH. Since 2011 a series of

temporary modular buildings have been added to the site to provide surge capacity and support the

8 Six Facet survey, Nov 2012


29

introduction of new care pathways. Most recently, WHHT acquired the Shrodells building to provide

the required flexibility on site to enable service reconfiguration and reduce pressure within PMoK. This

only provides a short-term solution as the building suffers from similar problems to the WACS

building.

Support and non-clinical services on the site are delivered from a variety of buildings, some in very

poor condition. The site originally housed the Watford Union Workhouse, built in 1837, and some of

the original buildings (which are Grade II listed) are still in use. None of the buildings are considered

to have viable long-term future for the delivery of healthcare services.

WHHT currently owns less than 50% of its required car parking space, the remainder is provided on a

short-term lease from WBC. A combination of topography and layout make movement around the site

challenging, particularly for those with limited mobility.

The hospital has 394 medical beds and 145 surgical beds available, excluding the ICU and WACS. It

has nine theatres. Current utilisation rates are around 97% for beds and 85% for theatres. The

recommended planning assumption for bed utilisation is 85%, which demonstrates the pressures

currently being faced at the site.

Table 7 shows the internal area of the main elements of the WGH site.

Table 7: WGH estate

Building Approximate size

Princess Michael of Kent (PMoK) 23,000 m2

Women’s and Children’s Services (WACS) 11,000 m2

Acute Admissions Unit (AAU) 7,000 m2

Shrodells and surge capacity 4,000 m2

Non-clinical space 15,000 m2

Total internal area of WGH estate 60,000 m2

St Albans City Hospital

SACH is WHHT’s elective care centre. It provides the following clinical services:

Antenatal and community midwifery

Outpatients

Minor Injuries Unit (MIU)

Elective and day case surgery

Clinical support, including X-ray, ultrasound, mammography and blood and specimen collection

The hospital was re-developed following a reduction in service provision around 20 years ago.

Gloucester Wing, constructed in the late 1980s, provides the majority of clinical services including an

urgent care centre (UCC), outpatients, radiology, renal services, day surgery and the theatre

complex. Although structurally sound, the utilities infrastructure and building fabric will need

refurbishment to prolong its use for clinical services. The current building layout limits the ability to

comply fully with NHS building standards, specifically within the day surgery, radiology and main

theatres. Two of the six theatres will need to be re-provided within the next five years.

Moynihan Wing provides a combination of inpatient wards and outpatient services in a building that is

over 50 years old. It will need replacement or major refurbishment with the next five years. Runcie

Wing, currently occupied by Hertfordshire Community Trust (HCT), and Waverley Wing occupied by


30

Central London Community Healthcare NHS Trust (CLCH), provide usable clinical space which will

revert to WHHT as the current occupants vacate the site.

The linear nature of the site and its topography make travel between the buildings difficult.

Figure 4: SACH site map

The site has 40 beds and six theatres (including one procedure room for ophthalmology) and a MIU,

open every day of the week from 9am – 8pm (except Christmas day). Table 8 shows the internal area

of the main elements of the SACH site.

Table 8: SACH estate

Building Approximate size

Gloucester 8,000 m2

Moynihan 6,000 m2

Runcie 3,000 m2

Other 2,000 m2

Total internal area of SACH estate 19,000 m2

Hemel Hempstead Hospital

HHH currently provides the following clinical services:

Antenatal and community midwifery

Outpatients

Step-down beds for patients

UCC

Fracture clinic

Medical care, including endoscopy and cardiac lung function testing

Diagnostic support, including X-ray, CT, MRI, ultrasound and non-urgent pathology

Pharmacy

Mortuary


31

The hospital was developed in its current configuration following a reduction in the services provided

in 2009. Around 30% of the site is currently unoccupied including Tudor Wing (which previously

housed the theatre and inpatient services) and Windsor Wing (which previously housed the day

hospital and inpatient wards). Jubilee, Marnham and Verulam Wing provide fit for purpose clinical

space but are spread across the site with poor space utilisation and clinical adjacencies. Radiology

services (including MRI and CT) are delivered from a 1930s building that is no longer fit for purpose

and are due to re-locate to SACH within the next three years.

Figure 5: HHH site map

The Your Care, Your Future programme has identified a requirement for a local health facility at

Hemel Hempstead and it has been confirmed that the following acute hospital services currently

provided from the HHH site will be relocated as part of the acute transformation:

Endoscopy

MRI/CT

Complex diagnostics, including nuclear medicine

A separate SOC, running in parallel to and informed by the acute transformation work, will consider

the requirements of the local health facility at Hemel Hempstead and identify the potential

development options for the HHH site under the Your Care, Your Future programme. The future of the

HHH site is therefore out of scope for this acute transformation SOC, but the acute activity to be re-

provided (endoscopy, MRI/CT and complex diagnostics) is in scope.

Services provided from locations other than acute hospital sites

As noted above, WHHT also provides small volumes of day case procedures, outpatient services and

community midwifery services from community and primary care premises throughout west

Hertfordshire. As part of the Your Care, Your Future programme, WHHT will deliver more services

closer to people’s homes in the future. The proposed acute transformation is, however, focused on

the acute hospital sites and the services which will continue to be delivered from them.


32

2.2.2 Business needs

The Your Care, Your Future programme has established a compelling case for change for the health

economy of west Hertfordshire. This falls into three themes:

Changing population needs

Quality

Sustainability

These themes are explored in detail in the Your Care, Your Future SOC9, which was published in

October 2015, and a summary of each is provided in the following sections.

More specifically for acute hospital services, WHHT needs to address significant issues with its estate

if it is to support delivery of the future model of care proposed by the Your Care, Your Future

programme and deliver sustainable, high quality acute care into the future. More detail about current

failings and the required changes are also provided below.

Changing population needs

The Your Care, Your Future SOC confirmed that the population of west Hertfordshire is forecast to

grow by 31,800 between 2015 and 2020. This is a significant increase; it equates to a rise of 5.5% in

comparison with the national average of 3.6%. The needs of the population are also changing due to

shifting demographics and increasing prevalence of long term conditions:

The population of people aged over 75 in west Hertfordshire is forecast to increase by 4,800

between 2015 and 2020, which represents a 10.4% increase compared with 12.6% nationally.

The younger population is also growing: west Hertfordshire already has a high proportion of under

18s at 25% in comparison to the national average of 24%, and this is expected to rise to 26% by

2021.

There is growing cultural diversity in west Hertfordshire, with 65,000 of the population (around

10%) having black and Asian ethnicity.

More people are living with complex health conditions, including an additional 400 people living

with dementia over the next five years.

The health economy must therefore adapt to meet these changing needs and ensure the health

inequalities which currently exist – both within west Hertfordshire and as compared with other areas

nationally – are addressed.

Quality

Between 2009 and 2014, A&E attendances in west Hertfordshire increased by 20% and emergency

admissions increased by 58%, placing increased pressure on acute services. Research by the Your

Care, Your Future programme has shown that this is at least partly because people are attending

A&E when other services in the community may be more appropriate. For example, there is a spike in

A&E attendances of young people between 09:00 and 10:00, suggesting that parents whose children

are ill overnight but do not require urgent care at that time are attending A&E rather than making use

of other services. Many patient cohorts also stay in hospital longer than the national average; ‘day of

care’ audits conducted by WHHT have shown that, on average, around 50% of all patients in inpatient

wards at WGH are no longer acutely unwell but remain in hospital due to either an in-hospital or out-

of-hospital delay.

The additional pressure has meant that WHHT has struggled to achieve the required clinical

standards and maintain service quality. As described in Section 2.1.3, WHHT was placed in special

measures following a CQC review which gave an overall rating of ‘Inadequate’ in September 2015.

Significant progress has since been made, but system-wide change is required if the health economy

9 http://www.yourcareyourfuture.org.uk/site_assets/files/FINAL-SOC-211015.pdf


33

is to rebalance, relieving pressure on acute services, and allow WHHT to focus on delivering high

quality emergency and specialist services for those that need them.

The Hertfordshire and west Essex STP confirms that performance in urgent and emergency care

requires improvement and that there is unwarranted variation across providers. It will be necessary for

acute hospitals to share their expertise with local health services, so that patients can be treated

without going to hospital at a time that is right for them. Acute hospitals across the STP footprint also

need to work more closely together in areas such as cancer, vascular, stroke, paediatric and

maternity services to reduce variations in quality, bring down costs and improve specialist services.

Sustainability

Clinical and financial sustainability is a significant issue across the NHS. Workforce challenges are a

core element of these issues and west Hertfordshire is currently facing a shortage of professional

roles. For example, the use of agency staff by WHHT remains at around 7%, though this has been

reduced from the peak of almost 14% in October 2015.

The 2016/17 spend on health and social care in the Hertfordshire and west Essex STP footprint is

£3.1bn, forecast to be £90m overspent. Without corrective action, this annual deficit is expected to

increase to approximately £552m by 2020/21.

WHHT currently has an underlying annual deficit of around £40m and this is estimated to increase in

the long term if no changes are made. WHHT, supported by wider changes in the local health

economy, must become more efficient if it is to achieve long term sustainability. WHHT has cost

improvement programmes (CIPs) in place which are forecast to generate recurring annual savings of

4% per year over the next five years, but further efficiencies can only be enabled through investment

in WHHT’s estate. This will be necessary to improve patient flows and workforce efficiencies, and also

to create an attractive workplace for staff to support recruitment and retention.

Developing a fit for purpose estate

The current WHHT acute hospital infrastructure has reached the end of its life and is in extremely

poor condition. It is therefore having a detrimental impact on the delivery of safe, effective, responsive

and efficient care. It is also constraining the implementation of new care models being delivered under

the Your Care, Your Future programme.

Investment is required to address three main issues:

Providing capacity to meet changing demand

Addressing functional suitability issues and enabling service redesign

Mitigating risk to business continuity

These are explored in the following sections.

Capacity to meet changing demand

As outlined above, the needs of the population of west Hertfordshire are changing. The Your Care,

Your Future programme is seeking to address these changes by delivering a future model of care in

which more care will be delivered closer to home. The programme acknowledges, however, that

emergency acute and more specialist planned care services must be centralised where necessary to

ensure they can be delivered to high standards in an efficient manner. Your Care, You Future

programme interventions will decrease both the demand for acute services and the length of stay of

patients once they have been admitted.

The scale of population growth and changing needs mean, however, that acute services in west

Hertfordshire will need additional capacity over the next 20 years if they are to meet demand. Acute

hospital services must therefore adapt to meet the new model of care, and the estate from which it is

delivered must be developed to ensure it has the right capacity, in the right areas, to meet changing

demand. This is explored in more detail in Section 2.4.3.


34

Functional suitability

The WHHT estate does not meet the current NHS building standards expected for acute hospitals,

with much of WGH being built before 1984 without modern procedures and needs in mind. When

compared with standard NHS requirements10:

Only 10% of the WHHT inpatient bed base is in single rooms, against a standard of 50%.

The inpatient ward areas across all WHHT sites are based on six bedded bays, against the current

standard of four bedded bays.

Six bedded bays in the main PMoK building at WGH are almost half the required size (circa 51m2

against a current space requirement of 96m2).

The neonatal unit is only 30% of the required size (circa 622m2 against a standard of 2,048m2 for a

Level 2 (local) neonatal unit).

The delivery suite rooms are only 44% of the required standard (circa 13.1m2 against a standard of

30m2, including en suite). These rooms are also in exceptionally poor condition; some do not have

a washbasin within the delivery suite and ‘shared’ toilet facilities are only available across an

‘open’ corridor.

Further specific examples demonstrating the poor functional suitability of the WHHT estate include:

The only link between the main clinical buildings in WGH is via an underground service corridor

and is dependent on a single lift:

– Patients transiting between the WACS building and the main operating theatres share the

corridor with domestic and clinical waste, stores for deliveries and catering services.

– When the lift is out of service these journeys require an ambulance transfer between buildings.

– Inpatients requiring access to renal services have to transit (in beds) through the main

reception and across the main access road.

The very high occupancy rates for inpatient beds leave no capacity to absorb additional patients

during periods of peak demand:

– Areas used for ‘surge’ were not designed for inpatient use and during the busiest times the

corridors around the emergency department have to be re-designated as clinical areas.

– To address the shortage of clinical space in ward areas, rooms designed for storage and

support services (linen, clinical, domestic and confidential waste, medical equipment) have

been re-assigned as clinical space. The resulting ‘clutter’ in ward and corridor areas leads to

inefficiency, a very poor patient experience and the increased risk of an infection control or

health and safety incident.

– Rooms designed for staff use have also been re-assigned as clinical space. Clinical pressures

make it increasingly difficult for staff to use the centralised canteen/welfare facilities, but they

have no suitable rest rooms in or close to their working areas.

To meet operational pressures on the WGH site, WHHT has become increasingly dependent on

the use of temporary buildings to deliver some aspects of clinical care. The location, accessibility

and condition of these buildings impacts on the clinical and financial efficiency of the hospital, the

patient experience and quality of care available. Several of these building are now unsuitable for

clinical use and the services must be relocated.

Waiting areas in Radiology are in a corridor close to the main hospital reception, leaving patients in

hospital gowns with very limited privacy or dignity.

Many of the windows within the main clinical buildings on the WGH site (PMoK and WACS) are old

‘aluminium type’:

– They are not double glazed and provide very poor insulation or protection from the sun.

10 Health Building Note (HBN) 04-01 (2013)


35

– The window surrounds leak, particularly on the sides exposed to prevailing winds.

– As these buildings are not air conditioned, windows have to be opened to aid ventilation and

control temperature, allowing pigeons to access the building with the resultant infection control

risk.

– The design and layout of the clinical areas limit the opportunity to replace these windows,

except as part of a major refurbishment programme.

The patient/visitor car park at WGH is on steeply sloping ground which provides a serious

challenge to those with even minor mobility issues.

The estate is also limiting WHHT’s ability to comply with the Equality Act. The age of the estate (40%

is over 40 years old), the topography of the sites (all three hospitals are built on steep hills), and the

increasing number of people with impaired mobility using the facilities, all provide challenges. In 2016

WHHT had an independent access assessment and is currently implementing a prioritised action plan

to address the issues identified. The focus remains the provision of the best practicable solution for all

hospital users within the limitations of buildings, layout and available resources.

These failings have a significant impact on patient experience. In a CQC survey of inpatients

conducted in June 2016, WHHT performed worse than other trusts in ‘privacy for examinations’ and in

the 2015 patient-led assessments of the care environment (PLACE) assessment results, WHHT also

underperformed substantially. For ‘environment’, WHHT scored 83.5% compared to a national

average of 90.1%, and scored particularly badly on ‘Privacy, dignity and wellbeing’ (77.7% compared

to national average of 86%). This is at least partly attributable to the physical ward environment.

Major improvements are required across WHHT’s estate if it is to meet patient expectations, support

delivery of safe, effective care, and provide flexibility to adapt to changing practices into the future.

Risk to business continuity

The WHHT estate has suffered from historic underinvestment and so now over 68% of WHHT’s total

estate, and 80% of the WGH site, is assessed to be in ‘poor’ condition or worse and backlog

maintenance is estimated at over £100m. The 2015 CQC report summarised that ‘Facilities overall

were in a poor state of repair and in some cases caused a potential risk to staff and visitors’.

The poor condition of the estate has resulted in a significant risk to business continuity, with a number

of serious incidents occurring over the last year:

Closures or restrictions for use of operating theatres at WGH and SACH due to failures of

ventilation systems.

Loss of MRI at both WGH and HHH due to power supply problems.

Loss of beds or clinical activity due to water ingress following heavy rainfall or failures in water

distribution pipework (frequent at all sites).

Frequent sewage ingress into clinical areas (Emergency Department, WACS and Radiology at

WGH) due to failures of wastewater system.

Road collapse outside main entrance at WGH due to failure of underground duct.

Failures in steam distribution pipework leading to frequent loss of heating and hot water in clinical

areas, particularly across WGH site.

Multiple concurrent failures of lifts.

Poor reliability/serviceability (through age) of alarm systems, including fire alarms, door access

systems and mortuary fridges.

To date, WHHT’s reactive maintenance capability has been successful in limiting the impact of the

majority of these failures on patients’ clinical outcomes, although their experience may have been

unsatisfactory. This position is unsustainable as the number of significant infrastructure failures

increases; it is now at least weekly. Estate resources have had to be prioritised on maintaining a

cross-site 24/7 reactive maintenance capability, ensuring statutory compliance (asbestos and water


36

management) and mitigating the areas of highest risk (ventilation systems in high dependency areas,

safety of pressure systems). WHHT’s backlog maintenance liability has therefore continued to grow,

along with the potential risk to business continuity and patient safety. If nothing is done, the cost of

maintaining the estate will continue to grow at an increasing rate, without any real improvement in its

condition, and patient safety will be put at risk. The estate must now be improved to minimise these

risks and allow best value for money to be gained from future investment, maintaining the estate to

the required standard rather than simply patching it up.

Investment objectives

To address the case for change, the acute transformation across west Hertfordshire has the following

investment objectives:

Provide the range of acute emergency, specialist and planned hospital services required by the

population of west Hertfordshire now and in the future, addressing changing population needs and

advances in healthcare.

Improve joined-up working with primary, community, mental health, and social care providers to

maintain patient stability and prevent escalation to more acute levels of care.

Optimise the location(s) from which services are provided to ensure the best use of available

workforce whilst maintaining access to specialist care.

Meet clinical quality standards expected for all services, including specialist services such as

cancer and emergency stroke and vascular.

Provide services from a fit for purpose estate which meets current building standards/regulations,

with flexibility to support future changes in working practices.

Ensure best use of resources to achieve long term financial sustainability for WHHT.

Scope

2.4.1 Scope of acute transformation

As outlined in Section 2.1.3, the Your Care, Your Future programme has established a future model

of care for west Hertfordshire in which more care will be delivered closer to home. The Your Care,

Your Future SOC confirmed the reconfiguration of services which will be required in order to deliver

this model of care, including the development of a number of local health facilities or locality hubs

across each of the four localities in west Hertfordshire. The programme, now part of the Hertfordshire

and west Essex STP, is now in the process of developing and delivering a range of interventions

across primary, community, mental health and social care which will reduce the reliance of the local

health economy on acute services and begin this reconfiguration.

The scope of this SOC is limited to the acute transformation required in order for WHHT to support

the reconfiguration of services established by the Your Care, Your Future programme. It is focused on

the estate configuration necessary to provide the required acute hospital services under the future

model of care and the works required to achieve this. It does not, therefore, consider the range of

acute services to be provided by WHHT in the future as this has already been confirmed by Your

Care, Your Future.

As noted in Section 2.2.1, HHH is out of scope of this SOC as the Your Care, Your Future programme

has identified a requirement for a local health facility at Hemel Hempstead and therefore HHH will no

longer be an acute hospital site. A separate SOC, running in parallel to and informed by the acute

transformation work, will consider the requirements of the local health facility and identify the potential

development options for the HHH site under the Your Care, Your Future programme. WHHT is

committed to ensuring an appropriate local service offer at HHH.

The sites in scope for this SOC are therefore the current WHHT sites at WGH and SACH along with

any additional greenfield site from which acute hospital services may be delivered in the future.


37

2.4.2 Clinical service model

As noted above, the focus of this SOC is the estate configuration necessary to provide the required

acute hospital services under the future model of care established by Your Care, Your Future and the

works required to achieve this. Before the estate options were assessed, a clinical service model for

acute hospital services which would support delivery of the investment objectives and underpin all

options was agreed. A Clinical Model Panel was convened, with representatives from both WHHT and

HVCCG as well as other stakeholder organisations and patient representatives. It considered the

following issues:

The optimum configuration of emergency and specialist care services; specifically whether some

non-elective inpatient care could be provided from local health facilities / locality hub sites, and

The optimum configuration of surgical services, including the potential to undertake some surgery

on local health facilities / locality hub sites.

There was a strong view from clinicians that all emergency inpatient care for medically unstable

patients requiring 24/7 consultant-led care should be retained on a single, centralised emergency and

specialised care site. This provides the safest, most effective care to be provided for patients and

optimises access to the full range of specialist expertise and care 24 hours per day, 365 days per

year. Patients who are medically stable and no longer require 24/7 consultant-led care should be

supported to access care at home or in local community settings.

For planned care, there was consensus that only minor procedures should be carried out at local

health facilities or locality hubs and that the most complex / highest risk procedures should continue to

be performed at the emergency and specialised care site. It was agreed that day case and low to

medium complexity inpatient surgery could appropriately be undertaken on a separate planned care

site, subject to appropriate case selection and supporting workforce and infrastructure, but that there

were clinical benefits to co-location.

The agreed clinical service model for acute hospital services is therefore a single emergency and

specialised care site and a single, separate planned care surgical site, which may or may not be co-

located, as illustrated in Figure 6. This clinical service model underpins all estates options considered.

A report from the Clinical Model Panel is available on the Your Care, Your Future part of HVCCG’s

website11.

Figure 6: Clinical service model underpinning estate options

11 http://hertsvalleysccg.nhs.uk/your-care-your-future/future-hospital-services


38

2.4.3 Forecast service demand and capacity requirements

A demand and capacity model has been built to forecast acute activity levels for the next twenty years

and then translate this activity into required capacity, in terms of beds, theatres and other clinical

rooms, and then convert this into a space requirement in m2. This takes the baseline activity from

2015/16 and applies growth assumptions provided by HVCCG (covering both demographic and non-

demographic growth) as well as Your Care, Your Future intervention assumptions around demand

management and length of stay improvements included within the Hertfordshire and west Essex STP.

The change in activity anticipated over the next ten years for each point of delivery (POD) is shown in

Table 9. After Year 10 it is assumed that there will continue to be a net growth in activity of 1% per

annum across all PODs (this essentially assumes the same level of net growth as the previous 10

years, and so the same level of demographic growth, non-demographic growth, and demand

management). More detail about these assumptions, including an annual breakdown, is provided at

Appendix A.

Table 9: Growth assumptions between 2015/16 and 2025/26

Point of delivery Demographic

growth

Non-

demographic

growth

YCYF

activity

reduction

Net change in

activity

Length of

stay

improvement

A&E +12.7% +15.5% -35% -6.8% -

Elective +12.7% +10.4% -13% +10.1% -8.0%

Day case +12.7% +13.7% - +26.4% -

Non-elective +12.7% +11.8% -28% -3.5% -4.0%

Outpatient +12.7% +32.1% -25% +19.8% -

Combining these assumptions with WHHT capacity and utilisation assumptions (detailed at Appendix

A), Table 10 shows the capacity required across west Hertfordshire acute hospital services by 2035/6.

This is the point in time for which the future hospital services have been sized in order to provide

sufficient capacity for the future. A range is shown as the requirement will vary depending on whether

or not the planned care site is co-located with the emergency and specialised site, and also whether

the catchment area is affected by the location of the sites.

Table 10: Capacity required by 2035/6

Site Beds Theatres Outpatient treatment

& procedure rooms Total m2

Emergency and

specialised care 750 – 800 10 – 11 40 – 50 63,000 – 67,000

Planned Care 80 – 120 6 50 – 60 17,000 – 18,000

Total 850 – 900 16 – 17 90 – 110 80,000 – 85,000

This compares to a current total WHHT estate size, including HHH, of around 94,000m2. Around 10%

of this is currently mothballed, however, almost all at HHH following the transfer of A&E and inpatient

services to WGH.

Table 10 shows the capacity requirement in 2035/36 assuming the Your Care, Your Future

intervention assumptions around demand management and length of stay improvements included

within the Hertfordshire and west Essex STP are fully achieved. Table 11 shows the additional


39

capacity required across both the emergency and specialised care site and planned care site if the

Your Care, Your Future interventions are only 75% or 50% successful.

Table 11: Capacity sensitivity cases

Sensitivity case Beds Theatres Outpatient treatment

& procedure rooms Total m2

75% achievement of

YCYF assumptions 110 0 10 6,000

50% achievement of

YCYF assumptions 250 1 30 14,000

The success of these interventions clearly has a significant impact on the size of acute hospital

required. These assumptions will therefore continue to be refined and updated throughout the

development of the OBC and FBC.

Main benefits

The proposed acute transformation is anticipated to deliver the following benefits, as defined by the

acute transformation working group:

Improved safety and better clinical outcomes for patients as a result of a fit for purpose estate

with sufficient capacity to meet demand, designed for modern clinical practices and able to

optimise efficiencies and clinical adjacencies.

Improved patient experience due to improved facilities which meet modern building standards.

Improved operational performance and lower risk to business continuity as a result of

modern, well-maintained infrastructure.

A more attractive workplace for employees due to improved facilities, designed for modern

clinical practices.

Reduced operational costs for WHHT as a result of efficiency improvements, a reduced reliance

on agency staff and reduced spend on emergency estate works.

Table 12 sets out how these benefits align with the investment objectives of the acute transformation.

Table 12: Alignment of anticipated benefits with investment objectives

Benefit Investment objectives

Improved safety and better

clinical outcomes for patients

Provide the range of acute emergency, specialist and planned hospital

services required by the population of west Hertfordshire now and in the

future, addressing changing population needs and advances in healthcare.

Improve joined-up working with primary, community, mental health, and

social care providers to maintain patient stability and prevent escalation to

more acute levels of care.

Meet clinical quality standards expected for all services, including specialist

services such as cancer and emergency stroke and vascular.

Provide services from a fit for purpose estate which meets current building

standards/regulations, with flexibility to support future changes in working

practices

Improved patient experience Provide services from a fit for purpose estate which meets current building


practices.


40

Benefit Investment objectives

Improved operational

performance and lower risk to

business continuity



practices.

A more attractive workplace

for employees



practices.

Reduced operational costs for

WHHT



practices.

Optimise the location(s) from which services are provided to ensure the

best use of available workforce whilst maintaining access to specialist

care.

Ensure best use of resources to achieve long term financial sustainability

for WHHT.

The extent to which the available options are able to deliver this investment objectives and realise the

anticipated benefits has been assessed in the Economic Case.

Strategic risks, constraints and dependencies

2.6.1 Strategic risks

The Your Care, Your Future programme manages its risks and issues in line with good practice and

further detail on the approach to risk management is included in the Management Case.

The major strategic risks relevant to the proposed acute transformation are detailed in Table 13.

Table 13: Strategic risks

Risk Proposed mitigation

There is a risk that the Your Care, Your

Future programme may not deliver the

forecast demand reduction for acute services

in the planned timescales. This would result

in the acute hospital being incorrectly sized

and/or increased capital investment to

provide required capacity; an additional 110

beds would be required if only 75% of the

forecast reduction is achieved, and 250 beds

if only 50% of the forecast reduction is

achieved.

The forecast demand reductions have been based on the

scale of opportunity in comparison with top quartile

performance. Specific plans to deliver the planned reductions

are now being developed as part of the STP for Hertfordshire

and west Essex. Sensitivity analysis has been performed to

establish the potential impact of the assumptions being

incorrect and all assumptions will be reviewed at OBC stage.

The future hospital will be designed to offer flexibility, such that

additional capacity can be added to meet demand if required.

There is a risk that stakeholder groups may

not support the preferred option. This could

lead to delays to implementation if additional

work is required to provide further evidence

in support of the preferred option before

approval can be given.

Stakeholder groups have been involved in the Your Care, Your

Future programme since its inception and have continued to

be involved during the acute transformation options appraisal

process. Queries and concerns raised by stakeholders have

been addressed during the process and the choice of preferred

way forward has received support from the vast majority of

stakeholder groups. Some concerns do still exist, however,

and the project will continue to work with stakeholders to

address these. Stakeholder engagement remains a priority for

WHHT and will continue throughout the development of the

OBC and FBC.


41

Risk Proposed mitigation

There is a risk that the required investment

may not be available. This may lead to the

scope of implementation being limited to

meet an affordability envelope, reducing the

benefits able to be achieved.

A range of potential commercial delivery models, along with

their financial implications, have been considered. These will

be assessed in more detail at OBC stage to ensure the

optimum balance of affordability versus value for money can

be achieved. A phased implementation will also provide more

flexibility, with options to spread the investment over a longer

timeframe to improve affordability.

There is a risk that WHHT’s estate

deteriorates further before implementation

can begin, impacting upon on the starting

position for redevelopment, and therefore

increase the cost, and potentially increasing

quality and safety risks.

WHHT has developed an interim estate strategy which is

aimed at ensuring WHHT is able to continue delivering

services safely and meet demand in advance of the acute

transformation. This should ensure that the estate does not

deteriorate significantly from its current state, but is only

tenable in the short term.

There is a risk, due to operational pressures,

that WHHT may not have access to the

necessary resources, in terms of both

capacity and capability, to manage the acute

transformation. This could lead to delays to

implementation.

The Management Case sets out the project management

resource required for the next stage of the acute

transformation, the development of the OBC. WHHT will

supplement internal resource with specialist external technical

advice where required to ensure it has the skills and

experience necessary to move to the next stage.

2.6.2 Constraints

Constraints have been identified that have influenced the planning of the proposed acute

transformation. The primary constraints are as follows:

The Your Care, Your Future programme has established the future model of care for west

Hertfordshire. This sets out the services to be provided from acute hospital sites in the future, and

those which should be delivered closer to home.

As part of the Your Care, Your Future programme, HHH will become a local health facility. It has

therefore been ruled out as a potential location for future acute hospital services.

Some buildings on the WGH site are Grade II listed. Any proposed redevelopment of the site will

therefore need to ensure that these buildings are suitably protected.

Planning permission will need to be granted for a development of a new site, or any substantial

redevelopment of an existing site:

– The greenfield site under consideration (see Section 3.3.1) is on the green belt and does not

currently have any planning permission. This would need to be granted for any development on

this site.

– The Watford Health Campus master plan was signed off by the planning authority in 2013 and

this allows for the development of WGH to meet the future healthcare needs of the population.

Although indicative building blocks were included within the plan, these were not developed in

detail. The indicative footprint would allow the development of a hospital of 90,000m2-

110,000m2. Formal planning consent will be required (a 6-8 month process), but will be

supported by WBC and the Health Campus development team.

– Any new build at the SACH site will require planning consent. Provided the plan remains with

the current footprint and height restrictions, does not increase the volume of traffic accessing

the site or disruptive out of hours activity, there is a high likelihood that planning consent will be

provided.

The proposed acute transformation must support WHHT in achieving long term financial

sustainability. WHHT is not a foundation trust and therefore does not have the freedom to borrow


42

to support capital investment. WHHT will be dependent on government funding (most likely in the

form of Public Dividend Capital (PDC) which is significantly constrained) or private finance in order

to implement the proposed acute transformation. These options are explored in more detail in the

Commercial Case.

2.6.3 Dependencies

Successful implementation of the proposed acute transformation will be dependent upon a number of

other schemes:

As described in Section 2.4.3, the Your Care, Your Future programme is delivering a range of

interventions across primary, community, mental health and social care aimed at reducing the

demand for acute services in west Hertfordshire. These interventions, including the redevelopment

of HHH as a local health facility, will need to be delivered as planned for the acute transformation

to be implemented as planned. Additional capacity will need to be provided on the acute hospital

sites if this is not the case.

If WGH is chosen as the location of the emergency and specialised care site, the Watford Health

Campus will need to make land available to WHHT, in line with current plans, to provide maximum

flexibility for redevelopment. The 2013 Campus Agreement provides an overarching masterplan for

the Health Campus site that includes agreement in principle from the planning authority for

development of healthcare facilities within the scheme. A number of conditional clauses within the

Agreement provide both opportunities and constraints for development of the site.

Conclusion

This Strategic Case has set out the strategic context for the proposed acute transformation in west

Hertfordshire. The Your Care, Your Future programme was launched to deliver the recommendations

of the Five Year Forward View and is now part of the Hertfordshire and west Essex STP. It aims to

deliver care closer to home, addressing changing population needs, quality issues and long term

sustainability. The programme has confirmed that acute hospital services must be rationalised in

order for them to be delivered to high standards.

There is also a compelling case for change specific to WHHT’s estate. The current estate does not

provide the required capacity for changing demand and there are significant issues with its functional

suitability which are impacting on patient experience. Over 68% of WHHT’s total estate, and 80% of

the WGH site, is assessed to be in ‘poor’ condition or worse and if nothing is done WHHT’s backlog

maintenance liability will continue to grow, along with the potential risk to business continuity and

patient safety.

Investment is now required to address these issues and provide a fit for purpose estate with flexibility

for the future. This will improve patient safety and employee satisfaction, and will ultimately enable

WHHT to deliver sustainable acute hospital services into the future.


43

The Economic Case assesses a long list of options for acute transformation against a range of evaluation criteria and then appraises the costs and benefits of a short list of options at a high level to confirm a preferred way forward. The evaluation uses the strategic context and case for change for acute transformation in west Hertfordshire and the investment objectives set out in the Strategic Case.

The economic appraisal has been undertaken in accordance with HM Treasury Green Book guidance.

Your Care, Your Future options appraisal

The Your Care, Your Future SOC12, published in October 2015, identified a long list of eight viable

options for the future location of acute hospital services in west Hertfordshire. Two locations for

emergency and specialised care were considered: the existing WGH site and a central greenfield site,

and four locations for planned care were considered: the existing WGH, SACH and HHH sites and a

central greenfield site. The eight options consisted of all possible combinations of these sites.

The long list assessment resulted in a short list of three options:

Option 1: Centralise all acute care at a new hospital at a central greenfield site

Option 2: Centralise all acute care at the WGH site

Option 3: Locate acute emergency and specialised care at the WGH site and planned care at the

SACH site

As a result of this assessment is was confirmed that HHH would become a local health facility.

This assessment did not, however, consider the different build options which could be pursued at

each site and the different costs and benefits associated with each. The options appraisal in this SOC

has, therefore, considered build options as a variable to ensure all of the available options have been

properly assessed. It has not, however, reconsidered the future of the HHH site which is out of scope

for this SOC, as detailed in Section 2.4.1.

Evaluation criteria

The Your Care, Your Future programme established a set of evaluation criteria and sub-criteria which

were aligned with the objectives of the programme. These were used to evaluate options for acute

care in the Your Care, Your Future SOC. The main criteria were:

Quality

Experience

Access

Affordability

Deliverability

It became clear during this process, however, that that not all of these criteria differentiated between

the options being considered. This is because the future model of care proposed by Your Care, You

12 http://www.yourcareyourfuture.org.uk/site_assets/files/FINAL-SOC-211015.pdf

ECONOMIC CASE


44

Future contains aspects that are considered “fixed points”. For example, patient safety is of primary

importance, but this is largely driven by the model of care adopted, and all of the options considered

were underpinned by the same model of care, as set out by Your Care, Your Future.

In order to develop a set of evaluation criteria to assess the acute transformation options considered

in this SOC, the Your Care, Your Future criteria and sub-criteria were reviewed with stakeholders at

an event held in July 201613. The aim of this review was to gather views on which criteria were the

true differentiators for the options being considered and also the relative importance of the criteria. As

a result of this review, the following evaluation criteria have been used to assess the acute

transformation options.

Table 14: Evaluation criteria

Criteria Sub-criteria Description

Access Accessibility The extent to which the option will impact (positively or negatively) on

travel times.

Patient

experience

Modern facilities The extent to which the option is likely to meet building regulations, provide

flexibility for the future and ease of maintenance.

Deliverability

Site suitability The extent to which the option will enable the accommodation of all

necessary clinical and support services without site-linked constraints (e.g.

space, geography, topography, planning).

Implementation

approach

The complexity of implementation, and the extent to which this is likely to

impact on business continuity.

Timescales The extent to which the option can be implemented rapidly following

approval of the OBC, and whether benefits can be delivered in a phased

way or will only be fully realised on completion.

Delivery risk The extent to which the option is likely to be successfully implemented.

Strategic alignment The extent to which the option:

Aligns with relevant local and national strategies

Addresses the case for change, is able to deliver the agreed acute

transformation investment objectives and provide flexibility for the future

Has broad stakeholder support across the range of stakeholders and the

likelihood that the option will withstand challenge

Value for money The balance of costs against financial savings, measured by equivalent

annual value (EAV)

Affordability Level of capital investment required to implement the option and impact on

WHHT’s long term financial sustainability.

It was agreed that these criteria would be used in a two stage process to identify the preferred way

forward:

The non-financial criteria (Access, Patient experience, Deliverability and Strategic alignment)

would be used to assess the full long list of options, and any options which could be ruled out

without the need for more detailed analysis would be identified.

13 A report from this event can be found on HVCCG’s website: http://hertsvalleysccg.nhs.uk/your-care-your-future/future-

hospital-services


45

The value for money and affordability criteria would then be used to assess the shorter list of

options, and the outputs from both stages would be combined to identify a preferred way forward.

All criteria were agreed to be important for successful implementation and no criterion was thought to

be significantly more important than any other, so all criteria were agreed to be equally weighted. It

was agreed, however, that sensitivity testing would be conducted to establish how overall scores

might change if criteria were weighted.

Long list of options

As described in Section 2.4.2, a clinical service model has been agreed for acute hospital services in

west Hertfordshire. This consists of a single emergency and specialised care site and a single

planned care site, which may or may not be co-located with the emergency and specialised care site.

The options for acute transformation therefore vary across three separate dimensions:

The location of the emergency and specialised care site

The location of the planned care site

Build options for both sites

These three dimensions, and the available options within each, are described in more detail in the

following sections.

3.3.1 Location of emergency and specialised care site

Emergency and specialised care is currently primarily provided by WHHT at WGH. WHHT has two

further sites: SACH and HHH. These have both been previously ruled out from being the future

location of the emergency and specialised care site by the Your Care, Your Future programme. This

is because their location, topography and accessibility mean that they offer no additional benefit over

WGH. Only a central greenfield site has the potential to offer additional benefits over the WGH site.

The available options for the location of the emergency and specialised care site are therefore:

A greenfield site

WGH site

Identifying a representative greenfield site for use in the appraisal

In order to identify a representative greenfield site to use in the options appraisal, Amec Foster

Wheeler was commissioned to provide an external professional review of all the possible greenfield

site options in the area. This report was published in September 201614. The sites were assessed

against three criteria specific to this review:

Suitability – including impact on the Green Belt, highways and environmental factors

Availability – whether the site is in current use and the prospect of it being made available

Accessibility – current levels of accessibility by private car.

The review found that a site on the western side of Kings Langley close to Junction 20 of the M25

would be the best option of those considered. This is because all other sites were either rated as high

risk from a planning perspective (i.e. unlikely to gain planning consent) or had poor accessibility from

one or more of the three key conurbations in west Hertfordshire (Watford, St Albans and Hemel

Hempstead). This site has therefore been assumed as the location of the greenfield site in the options

appraisal.

14 This report can be found on HVCCG’s website: http://hertsvalleysccg.nhs.uk/your-care-your-future/future-hospital-

services#Hospital


46

3.3.2 Location of the planned care site

The planned care site could be co-located with the emergency and specialised care site wherever this

is located, either at a central greenfield site or the WGH site.

If the planned care site is not co-located with the emergency and specialised care site then there are

more options available. If the emergency and specialised care site is chosen to be a greenfield site,

then the planned care site could be located at one WHHT’s existing sites of WGH or SACH. HHH has

been ruled out as the location of the planned care site by the Your Care, Your Future programme.

This is because it offers no additional benefit over the SACH site and is therefore going to become a

local health facility under Your Care, Your Future plans. If the emergency and specialised care site is

chosen to be the WGH site, then the planned care site could be the SACH site. A greenfield site has

been ruled out for the location of the planned care site if it is not chosen as the location of the

emergency and planned care site. This is because the scale of investment required to develop a

greenfield site is large, and a planned care site in isolation is not sufficient to make this investment

viable.

The available options for the location of the planned care site are therefore:

Co-located with the emergency and specialised care site (greenfield site or WGH site)

Located at a separate site from the emergency and specialised care site (WGH site or SACH site)

3.3.3 Build options for both sites

There is a spectrum of potential build options for each site, from complete new build to a

refurbishment of existing buildings. The following definitions were therefore used to develop

representative options for long list appraisal:

New build – 100% new build.

Redevelop – Up to 50% new build, with any retained existing buildings stripped back to base

structure in order to achieve a layout and finish as close to new build quality as possible around

fixed points such as lifts and staircases.

Refurbish – Up to 20% new build, with current layout maintained for retained existing buildings, but

finish as close to new build as possible. This is the minimum amount of works which could be

performed in order to provide an improvement to the estate.

Backlog maintenance only – 0% new build, with works to maintain safe operation but no

improvement to facilities. This is the minimum amount of works WHHT would be expected to

perform to maintain the existing estate.

For greenfield options, all buildings must be new build. For existing sites, all build options outlined

above are possible, though for refurbish or backlog maintenance options the main use of the building

cannot be changed dramatically.

3.3.4 Resulting long list of options

The variables in each of the three dimensions discussed above can be combined to create a list of the

available options.

In this SOC, ‘refurbish’ and ‘backlog only’ build options have not been combined with other options as

it is recognised that these options would not be able to deliver the investment objectives and have

therefore been included for comparison purposes only. ‘Refurbish’ represents the minimum amount of

works WHHT would have to perform in order to provide an improvement to the estate and ‘backlog

only’ is the minimum amount of works WHHT would be expected to perform to maintain the existing

estate.

This leads to a long list of 14 options. These are outlined in Table 15.


47

Table 15: Long list of options


1 Central greenfield site New build Central greenfield site New build

2 Central greenfield site New build Watford General Hospital New build

3 Central greenfield site New build Watford General Hospital Redevelop

4 Central greenfield site New build St Albans City Hospital New build

5 Central greenfield site New build St Albans City Hospital Redevelop

6 Watford General Hospital New build Watford General Hospital New build

7 Watford General Hospital New build Watford General Hospital Redevelop

8 Watford General Hospital Redevelop Watford General Hospital New build

9 Watford General Hospital New build St Albans City Hospital New build

10 Watford General Hospital New build St Albans City Hospital Redevelop

11 Watford General Hospital Redevelop St Albans City Hospital New build

12 Watford General Hospital Redevelop St Albans City Hospital Redevelop

13 Watford General Hospital Refurbish St Albans City Hospital Refurbish

14 Watford General Hospital Backlog only St Albans City Hospital Backlog only

Non-financial appraisal

The long-listed options outlined in Section 3.3 were assessed against the non-financial evaluation

criteria (access, patient experience, deliverability and strategic alignment) outlined in Section 3.1

using a scale of 1 to 5, where a score of 1 signified that the option would not be able to meet the

objectives of the Your Care, Your Future programme and a score of 5 signified that the option would

be able to optimise achievement of the Your Care, Your future programme. This assessment was

conducted by two expert panels with representatives from stakeholder organisations as well as

patient representatives. Reports from each of these panels have been published on HVCCG’s

website15.

The following sections summarise the outputs from the non-financial appraisal. A more detailed

description of how these scores were generated is provided at Appendix B.

3.4.1 Access

As described in Section 3.1, the Access criterion was used to assess the extent to which each option

would impact (positively or negatively) on travel times for patients and visitors. Table 16 shows the

average Access scores for the long-listed options from members of the Access and Patient

Experience panel.

15 http://www.yourcareyourfuture.org.uk/vision-for-the-future/

http://www.yourcareyourfuture.org.uk/vision-for-the-future/


48

Table 16: Access scores for long-listed options

# Emergency and specialised care site Planned care site Access score

1 Greenfield (New build) Greenfield (New build) 3.5

2 Greenfield (New build) WGH (New build) 3.6

3 Greenfield (New build) WGH (Redevelop) 3.6

4 Greenfield (New build) SACH (New build) 3.3

5 Greenfield (New build) SACH (Redevelop) 3.3

6 WGH (New build) WGH (New build) 3.5

7 WGH (New build) WGH (Redevelop) 3.5

8 WGH (Redevelop) WGH (New build) 3.5

9 WGH (New build) SACH (New build) 3.3

10 WGH (New build) SACH (Redevelop) 3.3

11 WGH (Redevelop) SACH (New build) 3.3

12 WGH (Redevelop) SACH (Redevelop) 3.3

13 WGH (Refurbish) SACH (Refurbish) 3.3

14 WGH (Backlog) SACH (Backlog) 3.3

All options have very similar overall scores, with a range from 3.3 to 3.6. This is because average

travel times are very similar for all sites considered. Options 2 and 3, which both involve providing

emergency and specialised care from a greenfield site and planned care from the WGH site, got the

highest scores. These were closely followed by Options 1, 6, 7 and 8 which involve providing care

from either a combination of a greenfield site and the WGH site, or entirely from the WGH site.

Options in which planned care is provided from the SACH site scored lowest.

3.4.2 Patient experience

The Patient experience criterion was used to assess the extent to which the option would be likely to

meet building regulations, provide flexibility for the future and ease of maintenance. Table 17 shows

the average Patient experience scores for the long-listed options from members of the Access and

Patient Experience panel.


49

Table 17: Final Patient experience scores

# Emergency and specialised care site Planned care site Patient experience score















The overall scores vary significantly between options. Options involving 100% new build, Options 1, 2,

4, 6 and 9, were scored the most highly. Options involving just backlog maintenance or a simple

refurbishment, Options 14 and 13, were scored lowest.

These scores demonstrate that the closer to new build quality achieved, the better the panel felt the

patient experience would be. The low scores for Options 13 and 14 show that panel members believe

that they would not be able to offer the quality of facilities required to meet patient experience

expectations.

3.4.3 Deliverability

The Deliverability criterion consists of four separate sub-criteria:

Site suitability – The extent to which the option will enable the accommodation of all necessary

clinical and support services without site-linked constraints (e.g. space, geography, topography,

planning).

Implementation approach – The complexity of implementation, and the extent to which this is likely

to impact on business continuity.

Timescales – The extent to which the option can be implemented rapidly following approval of the

OBC, and whether benefits can be delivered in a phased way or will only be fully realised on

completion.

Delivery risk – The extent to which the option is likely to be successfully implemented.

Table 18 shows the average scores for each sub-criterion and an overall Deliverability score,

calculated as the average score for all sub-criteria, for the long-listed options from members of the

Deliverability panel.


50

Table 18: Deliverability scores

Option Site suitability Implementation Timescales Delivery risk Overall

1 4.6 4.5 2.9 3.0 3.8

2 3.1 3.5 2.9 2.8 3.1

3 2.7 2.7 2.6 2.6 2.7

4 2.9 3.1 3.2 2.9 3.0

5 2.9 2.8 3.1 3.0 3.0

6 4.1 4.1 3.8 3.3 3.8

7 3.9 2.7 2.6 2.7 2.8

8 3.0 2.8 2.9 3.1 3.0

9 3.0 3.1 3.1 3.0 3.1

10 2.4 2.5 2.9 2.8 2.7

11 2.8 3.0 3.1 3.2 3.0

12 2.8 2.4 2.8 3.0 2.8

13 2.2 1.7 2.2 3.0 2.3

14 1.1 1.3 1.6 1.9 1.5

Options 1 and 6, which both involve a complete new build on a single site, score relatively well across

all Deliverability sub-criteria. This is because these options were seen as the most straight-forward.

There was not a large degree of variance between options, however, with most options receiving

similar overall scores. Options involving a simple refurbishment or just backlog maintenance (Options

13 and 14) were the exception and scored lowest across all sub-criteria. This is because they would

take a very long time to complete and begin to deliver benefits, they would result in risks to business

continuity and there is likely to be stakeholder resistance against these options as they would be seen

as sub-optimal.

These scores demonstrate that all options have some positives and some negatives in terms of

deliverability. Options 13 and 14 have the biggest deliverability issues, however, making it more

difficult to secure successful implementation and realise the anticipated benefits.

3.4.4 Strategic alignment

The Strategic alignment criterion was used to assess the extent to which the option:

Aligns with relevant local and national strategies (including the Hertfordshire and west Essex STP,

WHHT’s clinical and estates strategies and Watford Health Campus plans)

Addresses the case for change, is able to deliver the agreed acute transformation investment

objectives and provide flexibility for the future

Has broad stakeholder support across the range of stakeholders and the likelihood that the option

will withstand challenge

Table 19 shows the Strategic alignment scores for the long-listed options agreed by Helen Brown,

WHHT Deputy Chief Executive and Director of Strategy, and David Evans, HVCCG Programme


51

Director for Your Care, Your Future, as the stakeholder representatives best able to judge overall

strategic alignment.

Table 19: Strategic alignment scores for long-listed options

# Emergency and specialised care site Planned care site Strategic alignment score















The options achieving the best scores are those that involve significant new build elements, as these

are most likely to provide a fit for purpose estate with sufficient capacity to provide required

centralised acute hospital services safely. Those that involve a split site solution also score well, as

these offer most flexibility for the future with space for further expansion. Options 13 and 14 score

very poorly due to their inability to properly address the case for change and deliver the stated

investment objectives. Consequently, they also suffer from a lack of stakeholder support. Options 6, 7

and 8 also score relatively poorly, due to the lack of flexibility for the future and lack of stakeholder

support for a single hospital site solution in Watford. These options would be less likely to withstand

challenge for these reasons.

3.4.5 Summary

Overall non-financial scores

Table 20 shows the overall non-financial scores for the long list of options when each of the criteria

are weighted equally.


52

Table 20: Overall non-financial scores



Strategic

Alignment Overall16

Rank for

overall score

1 3.5 5.0 3.8 4.7 4.2 1

2 3.6 5.0 3.1 4.3 4.0 4

3 3.6 4.6 2.7 4.3 3.8 8

4 3.3 5.0 3.0 4.7 4.0 2

5 3.3 4.6 3.0 4.7 3.9 6

6 3.5 5.0 3.8 3.3 3.9 5

7 3.5 4.6 2.8 3.3 3.5 10

8 3.5 3.6 3.0 2.7 3.2 12

9 3.3 5.0 3.1 4.7 4.0 3

10 3.3 4.6 2.7 4.7 3.8 7

11 3.3 3.6 3.0 4.3 3.5 9

12 3.3 3.1 2.8 4.3 3.4 11

13 3.3 2.0 2.3 2.7 2.6 13

14 3.3 1.1 1.5 1.3 1.8 14

This shows that the ranking of the options is largely driven by the build type. The options with the

highest overall scores are those that involve a large proportion of new build, and those with the lowest

overall scores are those that involve the least amount of works. This is largely driven by the improved

patient experience possible with a new build solution, but also the greater deliverability.

As described in Appendix B, the sensitivity of the ranking to the weighting of each of the criteria has

been tested. This analysis demonstrated that weighting the criteria would not have a significant

impact on the ranking of the options.

Identifying options which can be ruled out without more detailed analysis

A further panel was held on 20th September 2016 to review the outputs from the non-financial analysis

and agree a shorter list of options for more detailed economic and financial analysis17. The panel

agreed that eight options should be taken forward.

Options 13 and 14 should be combined to form the ‘Do Minimum’ option

There was consensus that both Options 13 and 14 failed to meet an acceptable score for a number of

criteria; neither would be able to address the case for change and meet the stated investment

objectives. It was recognised, however, that a ‘Do Minimum’ option should be taken forward for more

detailed analysis for the purposes of comparison. Following discussion, it was agreed that Option 14

was not a genuine ‘Do Minimum’ option as more work would be required to ensure hospital services

16 The overall score is calculated as the average of all the non-rounded non-financial scores

17 A report from this panel is available on the HVCCG website: http://hertsvalleysccg.nhs.uk/your-care-your-future/future-

hospital-services#Hospital


53

can continue to be delivered safely than just backlog maintenance and the existing buildings do not

have sufficient capacity to accommodate the forecast growth in demand. In reality, the minimum

works required to provide the required capacity and ensure patient safety would fall somewhere

between Option 13 and 14. It was therefore agreed that the ‘Do Minimum’ option used for comparison

in the short list analysis should be a combination of Options 13 and 14.

Options 2, 4, 9 and 11 should be ruled out

The relative merits of the different options were discussed and it was agreed that no option should be

taken forward if it would cost substantially more to implement than an alternative option, but would

offer little additional benefit. It was also agreed that the build type could be used as a proxy for

implementation cost as new build would cost more than redevelopment, which would in turn cost

more than refurbishment.

The panel agreed that co-locating the planned care site with the emergency and specialised care site

would lead to benefits as a result of clinical synergies and operational efficiencies. If a new build

planned care site was pursued, requiring a greater capital investment than a redevelopment option,

then it should be co-located with the emergency and specialised care site in order to maximise the

benefits achieved through this investment. It was therefore agreed that any option involving a new

build planned care site which was not co-located with the emergency and specialised care site should

be ruled out (Options 2, 4, 9 and 11).

Options 7 and 8 should be combined into a single option

It was also agreed that Options 7 and 8 are very similar, with both involving new build as well as

redevelopment at Watford. In reality, if a combination of new build and redevelopment on the Watford

site was pursued, the optimum configuration would be chosen to make the best use of existing

buildings to meet requirements. The distinction between the options, with one involving new build

emergency and specialised care and the other involving new build planned care, was therefore false.

An option combining both of these should therefore be taken forward.

Short-listed options

Table 21 shows the short list of options being taken forward for more detailed economic and financial

analysis as a result of the non-financial analysis summarised in Section 3.4.

Table 21: Short list of options


1 Greenfield New build Greenfield New build

3 Greenfield New build WGH Redevelop

5 Greenfield New build SACH Redevelop

6 WGH New build WGH New build

7 / 8 WGH New build / Redevelop WGH Redevelop / New build

10 WGH New build SACH Redevelop

12 WGH Redevelop SACH Redevelop

13 / 14 WGH Refurbish / Backlog SACH Refurbish / Backlog


54

Sections 3.5.1 to 3.5.8 describe each of these options, and then Sections 3.5.9 to 3.5.13 describe the

works required at each site which are common to a number of options. More detailed assumptions are

provided at Appendix A.

3.5.1 Option 1: New build emergency and specialised care and planned care, both at a greenfield site

In Option 1, both the emergency and specialised care site and the planned care site would be located

at the greenfield site, which is assumed to be a site on the western side of Kings Langley close to

Junction 20 of the M25. All buildings would be new build. Section 3.5.9 outlines the plan for this site

under this option.

Planning permission would need to be granted for the site, which is on the green belt. The site does

not currently have any utilities, and so these would need to be provided. Works are also expected to

be required at Junction 20 of the M25 to ensure there is no adverse impact to traffic flows arising from

the development of a hospital on this site.

This option would involve significant reconfiguration of acute hospital services and so it is anticipated

that a public consultation would need to be held before it could be pursued. This is factored in to the

timeline.

Table 22 shows the assumed percentage breakdown of construction works required on each site

under Option 1.

Table 22: Option 1: Assumed percentage breakdown of required construction works

Site New build Major Refurb Medium Refurb Light refurb

Greenfield site 100% - - -

WGH site N/A N/A N/A N/A

SACH site N/A N/A N/A N/A

The emergency and specialised care and planned care buildings would be constructed in parallel. It is

assumed construction works would begin in 2023/24 and would complete in 2025/26, allowing the

transfer of services in 2026/27.

In this option, there would not be acute hospitals on either the WGH or SACH sites, and therefore this

land could be sold. It should be noted, however, that locality hubs would still be provided in both of

these localities, in line with Your Care, Your Future plans.

3.5.2 Option 3: New build emergency and specialised care site at a greenfield site and redeveloped planned care site at WGH site

In Option 3, the emergency and specialised care site would be located at the greenfield site. As in

Option 1, planning permission would need to be granted for the greenfield site, which is on the green

belt, all utilities would need to be provided and works are expected to be required at Junction 20 of

the M25 to ensure there is no adverse impact to traffic flows arising from the development of a

hospital on this site. Section 3.5.9 outlines the plan for this site under this option.

In this option the planned care site would be located at the existing WGH site, with PMoK

redeveloped for this purpose and an additional new build constructed to provide the additional

required capacity.



timeline.


55


under Option 3.




WGH site 33% 67% - -


Construction of the emergency and specialised care buildings on the greenfield site is assumed to

begin in 2023/24 and complete in 2025/26, allowing the transfer of services from WGH in 2026/27.

Development of the WGH site into a planned care site is then assumed to begin in 2027/28 and

complete in 2029/30, allowing the transfer of services from SACH by 2030/31.

In this option, there would not be an acute hospital on the SACH site, and therefore this land could be

sold. It should be noted, however, that a locality hub would still be provided in this locality, in line with

Your Care, Your Future plans.

3.5.3 Option 5: New build emergency and specialised care site at a greenfield site and redeveloped planned care site at SACH site

In Option 5, the emergency and specialised care site would be located at the greenfield site. As in

Options 1 and 3, planning permission would need to be granted for the greenfield site, which is on the

green belt, all utilities would need to be provided and works are expected to be required at Junction

20 of the M25 to ensure there is no adverse impact to traffic flows arising from the development of a

hospital on this site. Section 3.5.9 outlines the plan for this site under this option.

In this option the planned care site would be located at the existing SACH site, with some existing

buildings redeveloped and some additional new build to provide the required capacity. Section 3.5.13

outlines the plans for the SACH site under this option.



timeline.


under Option 5.




WGH site N/A N/A N/A N/A

SACH site 28% - 27% 45%

Development of the planned care buildings on the SACH site is assumed to begin in advance of

construction works at the greenfield site. Works here are assumed to begin in 2019/20 and complete

in 2022/23, allowing any transfer of services in 2023/24.Construction of the emergency and

specialised care buildings on the greenfield site is assumed to begin in 2023/24 and complete in

2025/26, allowing the transfer of services from WGH in 2026/27.


56

In this option, there would not be an acute hospital on the WGH site, and therefore this land could be



3.5.4 Option 6: New build emergency and specialised care and planned care, both at WGH site

In Option 6, both the emergency and specialised care site and the planned care site would be located

at the existing WGH site. All buildings would be new build. Section 3.5.9 outlines the plans for the

WGH site under this option.

This option would involve some reconfiguration of acute hospital services and so it is anticipated that

a public consultation would need to be held before it could be pursued. This is factored in to the

timeline.


under Option 6.



Greenfield site N/A N/A N/A N/A

WGH site 100% - - -


The emergency and specialised care and planned care buildings would be constructed in parallel. It is

assumed construction works would begin in 2020/21 and would complete in 2023/24, allowing the





3.5.5 Option 7/8: A mixture of new build and redeveloped emergency and specialised care and planned care, both at WGH site

In Option 7/8, both the emergency and specialised care site and the planned care site would be

located at the existing WGH site. Some existing buildings would be redeveloped where possible, but

those which are not fit for purpose would be demolished and additional capacity would be provided

with new build. Section 3.5.9 outlines the plans for the WGH site under this option.

This option would involve some reconfiguration of acute hospital services and so it is anticipated that

a public consultation would need to be held before it could be pursued. This is factored in to the

timeline.


under Option 7/8.

Table 26: Option 7/8: Assumed percentage breakdown of required construction works



WGH site 62% 18% 13% 7%


57



The emergency and specialised care and planned care development works would be conducted in

parallel. It is assumed that construction works would begin in 2020/21 and would be conducted in a

number of phases, completing in 2030/31. It is assumed that services would therefore transfer in

phases: 40% of activity in 2025/26, a further 25% of activity in 2027/28, a further 20% of activity

2030/31 and the remaining 15% in 2031/32.




3.5.6 Option 10: New build emergency and specialised care site at WGH site and redeveloped planned care site at SACH site

In Option 10, the emergency and specialised care site would be located at the existing WGH site. All

buildings on this site would be new build. Section 3.5.9 outlines the plans for the WGH site under this

option.

This option would not involve a significant reconfiguration of acute hospital services and so it is not

anticipated that a public consultation would need to be held before it could be pursued.

The planned care site would be located at the existing SACH site, with some existing buildings

redeveloped and some additional new build to provide the required capacity. Section 3.5.13 outlines

the plans for the SACH site under this option.


under Option 10.




WGH site 100% - - -

SACH site 28% - 27% 45%

Development of the planned care buildings on the SACH site is assumed to begin in advance of

construction works at the WGH site. Works are assumed to begin in 2019/20 and complete in

2022/23, allowing any transfer of services in 2023/24. Construction of the emergency and specialised

care buildings on the WGH site is assumed to begin in 2020/21 and complete in 2023/24, allowing the


3.5.7 Option 12: Redeveloped emergency and specialised care site at WGH site and planned care site at SACH site

In Option 12, the emergency and specialised care site would be located at the existing WGH site.

Some existing buildings would be redeveloped where possible, but those which are not fit for purpose

would be demolished and additional capacity would be provided with new build. Section 3.5.11

outlines the plans for the WGH site under this option.




58

The planned care site would be located at the existing SACH site, with some existing buildings

redeveloped and some additional new build to provide the required capacity. Section 3.5.13 outlines

the plans for the SACH site under this option.


under Option 12.




WGH site 57% 34% 9% -

SACH site 28% - 27% 45%

Development of the planned care buildings on the SACH site is assumed to begin in advance of the

development of the WGH site. Works are assumed to begin in 2019/20 and complete in 2022/23,

allowing any transfer of services in 2023/24. Development of the emergency and specialised care

buildings on the WGH site is assumed to begin in 2020/21 and would be conducted in a number of

phases, completing in 2029/30. It is assumed that services would therefore transfer in phases: 40% of

activity in 2025/26, a further 25% of activity in 2027/28, a further 20% of activity 2029/30 and the

remaining 15% in 2030/31.

3.5.8 Option 13/14: Minimum level of refurbishment and backlog maintenance of emergency and specialised care site at WGH site and planned care site at SACH site

In Option 13/14, the emergency and specialised care site would be located at the existing WGH site

and the planned care site would be located at the existing SACH site. On both sites, the minimum

amount of refurbishment and backlog maintenance would be performed in order to continue the safe

delivery of services. Some new build would also be required to provide the additional required

capacity.




under Option 13/14.

Table 29: Option 13/14: Assumed percentage breakdown of required construction works



WGH site 15% - - 85%

SACH site 15% - - 85%

The emergency and specialised care and planned care development works would be conducted in

parallel. Works are assumed to begin in 2018/19 and complete in 2023/24, allowing any transfer of

services in 2024/25.

3.5.9 New build on greenfield site

In Options 1, 3 and 5 there would be a new build hospital on a greenfield site. Figure 7 shows an

outline plan for the representative greenfield site chosen for these options near Kings Langley.


59

Figure 7: Greenfield site

A detailed design for the greenfield option has not been developed at this stage, but the flexibility

offered by the site means that the hospital could be built to an optimum design, with good access to

local transport links.

3.5.10 New build on WGH site

In Options 6 and 10 there would be a new build hospital on the WGH site. Figure 8 and Table 30

illustrate the outline plan for the site under these options.

Figure 8: New build on WGH site


60

Table 30: New build on WGH site

Location /

building

Area (000’s m2)

Footprint/GIA Current use Proposed future use Planned work

Area 1 6.8/27.2 Brownfield site owned

by WBC.

Long term car park

solution for WGH.

Construction of multi-

storey car park (in

2018/9).

Area 2 25/80-100 WBC owned:

brownfield. WGH area

provides pathology

services and car park.

Clinical: new build for

all services (Option 6)

or emergency /

specialist services

(Option 10).

Off-site solution for

pathology and admin.

Demolition and

subsequent new build.

Area 3 28/54 Current site of WGH. Available for disposal. Disposal.

PMoK

Building

4.6/23.4 Clinical: emergency

department, theatres,

ICU, inpatient wards,

outpatients.

Not required, available

for disposal.

Demolition following

completion of new

build.

WACS

Building

Wing

2.7/10.6 Clinical: women’s and

children’s services.

Not required, available

for disposal.

As PMoK.

AAU 2.2/6.6 Clinical: inpatient beds,

cath lab and support

services

Support transition, then

potential disposal.

Minor refurbishment.

Shrodells

and surge

units

4.7/4.0 Clinical, primarily

inpatient beds.

Support transitional

arrangements, then

potential disposal.

N/A

3.5.11 Redevelopment of WGH site

In Options 7/8 and 12, the WGH site would be redeveloped to continue to provide emergency and

specialised care. Figure 9 and Table 31 illustrate the outline plan for the site under these options,

although Option 7/8 would contain a greater proportion of new build to allow for inclusion of planned

care facility on the WGH, which would probably be housed within PMoK.


61

Figure 9: Redevelopment of WGH site

Table 31: Redevelopment of WGH site

Location /

building

Area (000’s m2)



by WBC.

Long term car park

solution for WGH.


storey car park (in

2018/9).

Area 2 20/80 WGH land: primarily

clinical support, admin

and car parking.

Remainder WBC

owned: brownfield.

Clinical: new build for

major clinical services

less inpatient wards.

Off-site solution for

pathology and admin.

Demolition and

subsequent new build.

PMoK

Building




outpatients.

Clinical: inpatient

wards, theatres.

Major refurbishment.

WACS

Building

Wing



Disposal or conversion

to offices.

Conversion to offices

requires major

refurbishment.



services.

Clinical, inpatient beds.

Capacity to support

transformation.

Minor refurbishment.

Shrodells

and surge

units


inpatient beds.

Support transitional

arrangements, then

potential disposal.

N/A


62

3.5.12 Refurbishment of WGH site

In Option 13/14, the WGH site will be refurbished to continue to provide emergency and specialised

care. Figure 10 and Table 32 illustrate the outline plan for the site under this option.

Figure 10: Refurbishment of WGH site

Table 32: Refurbishment of WGH site

Location /

building

Area (000’s m2)



by WBC.

Long-term car park

solution for WGH.


storey car park (in

2018/9).

Area 2 3/10 WGH surge units

providing inpatient

beds.

Clinical: new build

required to meet

capacity requirements.

Removal of temporary

units and replacement

by new build.

PMoK

Building




outpatients.

No change. Backlog maintenance

plus minor

refurbishment.

WACS

Building

Wing



No change. Backlog maintenance

plus minor

refurbishment.



services.

No change. Minor refurbishment.

Shrodells

and surge

units


inpatient beds.

No change to

Shrodells. Surge units

removed.

Shrodells: backlog

maintenance plus

minor refurbishment


63

3.5.13 Redevelopment of SACH site

In Options 5, 10 and 12 the SACH site would be redeveloped to provide planned care. Figure 11 and

Table 33 illustrate the outline plan for the site under these options.

Figure 11: Redevelopment of SACH

Table 33: Redevelopment of SACH

Location /

building

Area (000’s m2)


Area 1 6.2/10.0 (assumes

decked solution).

Single storey car park. Decked car park. New car park solution.

Area 2 5.2/8.0 (assumes

two storey new

build)

Inpatient wards,

outpatient clinics,

offices, point of

access, catering.

New clinical building

including theatres and

supporting activities.

Demolish Moynihan

building and restaurant

area. New build theatre

complex.

Area 3 8.5/8.0 See Gloucester wing

(below).

Clinical building

housing outpatients,

urgent care centre and

radiology.

Refurbish existing

building.

Area 4 2.6/3.0 See Runcie wing

(below).

Inpatient and day

surgery area.

Refurbish existing

building.

Gloucester

Wing

8.5/8.0 Main clinical building

housing theatres,

outpatients, urgent

care centre, radiology.

Clinical building

housing outpatients,

urgent care centre and

radiology.

Refurbish existing

building.

Moynihan

Wing

2.1/6.0 Inpatient wards,

outpatient clinics,

offices, point of

access, catering.

N/A Existing building to be

demolished to create

space for new theatre

block.


64

Location /

building

Area (000’s m2)


Runcie

Wing

2.6/3.0 Inpatient wards and

outpatient clinics

operated by HCT.

Day surgery and

inpatient wards to

support elective care

model.

Refurbish existing

building.

Value for money

A cost-benefit appraisal of the short-listed options has been conducted in accordance with HMT

Green Book guidance18 to assess the value for money offered by each option. This quantifies in

monetary terms as many of the costs and benefits as possible to generate a future profile of costs and

benefits for each option over the lifetime of the investment. These are then ‘discounted’ to convert

them into ‘present values’ so that they can be compared. The discounted costs and benefits are then

netted off against each other and summed to produce the net present value (NPV). As the different

options will result in creating estate assets with different lifetimes, this is then divided by the ‘present

value of annuity factor’ to calculate the EAV, which show the net benefit per year of owning and

operating the new asset in comparison to the baseline position.

A proportionate approach has been taken for this SOC stage analysis. Relatively detailed activity

modelling has been undertaken in order to estimate the required future capacity for acute hospital

services (as set out in Section 2.4.3) as this has a material impact on the required construction works

and associated costs. Data sources include information readily available from within WHHT from

previous technical feasibility work, a database of hospital developments owned by Turner and

Townsend and publically available sources. Where directly comparable data has not been available,

estimates have been generated by the project team based on professional experience and advice

from cost advisors. To ensure overall cost estimates are realistic, they have been benchmarked

against other similar schemes.

3.6.1 Costs

The following main categories of costs are included in the economic appraisal:

Land costs

Construction costs, including on-costs and project/client risk

Equipment, fees and non-works costs

Transition costs

Ongoing estate running costs

In line with HM Treasury guidance, an adjustment for optimism bias is also included in the cost

estimates, to address the tendency for project appraisers to be over optimistic. The estimates for the

following costs have been increased by 25%, to reflect the current uncertainty around the design of

the scheme, in line with HM Treasury recommended uplifts for standard buildings:

Construction costs, including on-costs and project/client risk

Equipment, fees and non-works costs

The following cost estimates have not been adjusted for optimism bias:

Unusual abnormals (this cost estimate was considered to be a top end estimate, and is tested

using sensitivity analysis)

Transition costs (this has been applied as a % uplift to construction costs)

Land values (sourced from Land Registry database)




65

The sources and underlying assumptions for each cost category are outlined in the following sections.

Detailed data and assumptions are provided in Appendix A.

Land costs

All options involving a greenfield site (Options 1, 3 and 5) will involve the purchase of land. As

described in Section 3.3.1, a site on the western side of Kings Langley close to Junction 20 of the

M25 has been chosen as the representative site for the purposes of this options appraisal. The

estimated value of this land has been based on the national Land Registry database.

Construction and equipment costs

All of the options involve an amount of construction. The estimated costs have been based on an

indicative cost/m2, based on benchmarking received from two live hospital redevelopments, one in

outer London, and the other in the south east of England. The cost/m2 varies depending on the

amount of new build, heavy refurbishment, medium refurbishment and light refurbishment to be done.

Adjustments have also been made to account for abnormals, such as required changes to road

infrastructure, and the provision of a car park.

Transition costs

All options also involve transition costs due to decant activities, double-running of services, disruption

of services and the provision of temporary accommodation. The cost of these activities has been

estimated as a percentage of the estimated capital investment, based on the transition costs incurred

during a similar hospital development scheme.

Ongoing estate running costs

The ongoing estate running costs for WHHT will change as a result of the construction works. These

include:

Energy

Water

Soft facilities management (FM) – Cleaning, catering and portering etc.

Hard FM – Planned and reactive maintenance service to maintain the operational functionality of

the estate.

Lifecycle costs – Phased replacement of infrastructure assets at the end of their life e.g. light

fittings, washbasins, taps, radiators, boilers and lifts.

Capital Maintenance – Through-life upgrades to infrastructure due to changes in technology, major

equipment, models of care etc.; refurbishment of clinical areas, wards and operating theatres;

changes to building use; and upgrades to ventilation systems etc.

Estimates for the new costs have been based on Turner and Townsend’s database of hospital

developments.

3.6.2 Benefits

The following categories of financial benefit are included in the economic appraisal:

Reduced operating costs (i.e. increased efficiencies) supported by the new estate

Avoidance of future high estates running costs due to the current estate deteriorating

Savings as a result of not building standalone locality hubs

Non-financial benefits have not been quantified and monetised as part of the economic appraisal, but

the scores from the non-financial assessment have been combined with the output from the economic

appraisal in order to demonstrate overall value for money.

The sources and underlying assumptions for each financial benefit category are outlined in the

following sections. Detailed data and assumptions are provided in Appendix A.


66

Reduced operating costs

All options will result in improvements to the acute hospital estate. Options that involve new build or

major redevelopment will be designed to improve the layout of the estate, improve the internal design

within departments and include the latest technology to support a digital hospital. These

improvements will result in improved patient flow and increased workforce productivity. It has been

assumed that this will allow WHHT to increase its Cost Improvement Plans (CIPs) significantly once

the building is completed.

WHHT’s CIPs are assumed to deliver annual efficiencies of 4% until 21/22, in line with planning for

the STP period, then dropping to 2.5% until 26/27. The additional efficiencies which would be possible

over and above this have been estimated by the WHHT Finance team for the different building

options as outlined in Table 34. The possible duration of improved CIPs has been tested as a

sensitivity analysis.

Table 34: Efficiency improvements

Build Option Annual Efficiency Improvement above 2.5% CIP

New 3%

Redevelop 2.5%

Do Minimum 0.5%

In addition an assumption has been made that all options would allow WHHT to continue to deliver

ongoing efficiencies at 2.5% (i.e. 0.5% above inflation), rather than 2% if nothing is done. After

2035/36 it is assumed that there is no further growth in activity and therefore efficiency will drop by a

further 0.5% across all options including the baseline. These assumptions are set out fully in

Appendix A.

Avoiding incurring future high estates running costs

As described in the Strategic Case, the current estate is not currently fit for purpose and there is

significant reactive maintenance. If the estate is not significantly improved at some point in the future

then levels of reactive maintenance will continue to rise. The WHHT Estates team have estimated that

if no significant backlog work is undertaken then hard FM costs (around 40% of the estates running

costs) would begin to increase at around 3% above inflation per annum.

Savings as a result of not building standalone locality hubs

As part of the Your Care, Your Future programme, a number of locality hubs are planned across west

Hertfordshire. If there is an acute hospital site in the locality then the locality hub will be combined in

the same building, but if there is not then a standalone locality hub will have to be built. It will be

significantly more expensive to build a standalone hub than it would be to build one as part of an

acute hospital. There will therefore be a wider benefit for the health economy of a reduced cost of

construction for the locality hub for options in which there is an acute hospital site in the localities

where a locality hub is required (Watford and/or St Albans). This saving has been estimated at 20% of

the full cost of building a standalone hub.

3.6.3 Equivalent annual value calculation

The present value of the costs and benefits of each short-listed option have been calculated in

comparison to a baseline position in which there is no capital investment in the estate. In this baseline

position it is assumed:

Service costs for WHHT change in line with growth assumptions and any planned efficiency

savings which are not dependent on capital investment (i.e. the trusts current 5 year financial

plan).


67

Estates running costs increase as a result of no backlog maintenance being addressed.

This approach ensures that only the costs and benefits that can be affected by the decision at hand

are included, in line with HMT Green Book guidance.

Table 35 shows the EAVs for each short-listed option, in comparison to the baseline position. More

detail is provided at Appendix C.

Table 35: Equivalent annual value

Option Appraisal

period

Net Present

Benefits (£m)

Net Present

Costs (£m)

Net Present

Value (£m)

Annuity

Factor

EAV

(£m / year)

1 60 years 668 -552 116 27.0 4.3

3 60 years 662 -551 112 27.0 4.1

5 60 years 652 -553 99 27.0 3.7

6 60 years 739 -495 244 26.8 9.1

7 / 8 60 years 553 -377 176 27.4 6.5

10 60 years 730 -493 237 26.8 8.8

12 60 years 578 -415 162 27.3 5.9

13 / 14 30 years 309 -296 12 25.0 0.5

Options 6 and 10 have the highest EAVs and therefore offer best value for money from a financial

point of view. This is because implementation of these options could be completed earlier than the

other options considered and therefore benefits realisation would begin sooner.

Options 7/8 and 12 have lower EAVs because their implementation would be phased, and so the full

benefits would take longer to realise. The anticipated financial benefits of these options are also lower

than full new build options.

The greenfield options, Options 1, 3 and 5, offer lower value for money than most of the other options

considered. They have the lower EAVs because they require a greater level of upfront investment

than WGH options, but do not offer any additional financial benefits. They would also take longer than

the WGH options to implement, due to the time required to secure planning permission, and provide

the required utilities and access to the site. Benefits realisation would therefore be delayed.

Option 13/14 returns a significantly lower EAV, with the NPV being barely positive. This shows that

there is little value in the Do Minimum option, and in financial terms it is not much better than doing

nothing. It should be noted that the life of Option 13/14 is only 30 years as at that point the PMoK

building would need significant upgrade and therefore a further hospital rebuild or major refurb would

be required.

3.6.4 Combining the EAV with non-financial scores

The EAV only takes account of the financial benefits. The EAVs must be combined with the non-

financial scores for each of the options to give an overall measure of value for money.

Table 36 shows the non-financial score and EAV for each short-listed option. For short-listed options

which have been formed by combining two options from the original long list, the non-financial score

has been calculated as the average of the scores for the original options, or replaced by a directly

calculated figure where possible based on the detailed description of the option.


68

Table 36: Non-financial score and EAV

Option Non-financial score EAV / £m

1 4.2 4.3

3 3.8 4.1

5 3.9 3.7

6 3.9 9.1

7 / 8 3.4 6.5

10 3.8 8.8

12 3.5 5.9

13 / 14 2.3 0.5

The value for money offered by each option is best demonstrated by plotting its EAV against its non-

financial score, as shown in Figure 12. Options providing best overall value for money are those

closest to the top right corner, as these provide the highest EAV and highest non-financial score.

Figure 12: EAV versus non-financial score

This chart shows that Options 6 and 10 offer best overall value for money as they have relatively high

EAVs and high non-financial scores. Options 7/8 and 12 have lower EAVs and lower non-financial

scores. Options 1, 3 and 5 have similar non-financial scores to Options 6 and 10, but much lower

EAVs. Option 13/14 offers worst overall value for money as it has a very low EAV and a very poor

non-financial score.

Non

-Fin

an

cia

l S

co

re

Equivalent Annual Value


69

3.6.5 Sensitivity analysis

Sensitivity analysis has been performed to determine whether the conclusion from the cost-benefit

analysis is robust to changes in some key assumptions. This has been performed against cost drivers

and benefit drivers as follows:

Cost Drivers:

– Build cost (the cost per m2 of the build) varied by adjusting the optimism bias from 25% to 50%

and 0%.

– Cost of unusual abnormals, varied by reducing the base cost estimate by 75% and by 50%.

– Hospital size, varied by altering derogations from 5% to 0% and 10%.

Benefit drivers:

– Reduced operating costs (i.e. level of efficiencies achieved), varied by adjusting length of time

increased CIPs can be realised by two years and four years.

– Avoidance of future high estates running costs, varied by adjusting the rate at which current

hard FM costs increase from 1% to 3%.

– Savings as a result of not building standalone locality hubs.

Table 37 and Table 38 sets out the impact on the EAVs of each short-listed option as a result of

changes to input assumptions within a reasonable range. The base case is shown in blue.

Table 37: Scenario analysis for cost drivers

Option

Build Cost (Optimism bias) Unusual abnormals Hospital size (Derogations)

50% 25% 0% 100% 75% 50% 0% 5% 10%

1 1.2 4.3 7.4 4.3 5.2 6.1 3.1 4.3 5.5

3 1.0 4.1 7.2 4.1 5.0 5.9 2.7 4.1 5.3

5 0.6 3.7 6.7 3.7 4.5 5.4 2.2 3.7 4.9

6 5.7 9.1 12.5 9.1 9.1 9.1 7.8 9.1 10.4

7 / 8 3.9 6.5 9.0 6.5 6.5 6.5 5.4 6.5 7.5

10 5.5 8.8 12.2 8.8 8.8 8.8 7.3 8.8 10.1

12 3.3 5.9 8.6 5.9 5.9 5.9 4.9 5.9 7.3

13 / 14 -1.1 0.5 2.1 0.5 0.5 0.5 -0.5 0.5 1.5

This demonstrates that although varying the assumed cost per m2 of any construction impacts upon

the value for money offered by each option, it does not impact upon the ordering of the options. This

is also true for the assumed hospital size. These assumptions will have to be carefully refined as the

business case process developments to ensure the anticipated value for money can be achieved.

As the cost of ‘unusual abnormals’ is only relevant for the greenfield options, Option 1, 3, 5, these are

the only ones impacted by any change. When the cost estimate is reduced to half that in the base

case, the ordering of Option 1 and Option 12 are reversed. It is thought, however, that the unusual

abnormals could not be so low in reality.


70

Table 38: Scenario analysis for benefit drivers

Option

CIP efficiencies Baseline hard FM Hub savings

2 years 3 years 4 years 2% 3% 4% 0% 20% 40%

1 1.7 4.3 6.7 3.1 4.3 5.5 4.3 4.3 4.3

3 1.5 4.1 6.6 2.9 4.1 5.3 3.9 4.1 4.3

5 1.1 3.7 6.1 2.5 3.7 4.9 3.4 3.7 3.9

6 6.2 9.1 11.7 7.9 9.1 10.3 8.8 9.1 9.4

7 / 8 4.5 6.5 8.2 5.4 6.5 7.6 6.3 6.5 6.7

10 6.0 8.8 11.5 7.6 8.8 10.1 8.3 8.8 9.4

12 3.9 5.9 7.8 4.8 5.9 7.1 5.5 5.9 6.4

13 / 14 0.5 0.5 0.5 -0.4 0.5 1.4 -0.1 0.5 1.0

Again, although varying the assumed CIP efficiencies achieved under each option or the baseline

hard FM assumption impacts upon the value for money offered by each option, it does not impact

upon the ordering of the options. The assumed hub savings would only be incurred in the options

where one or both acute hospital sites is co-located with a locality hub. Options 3, 5, 6 and 7/8 have

one c-location and Options 10, 12 and 13/14 have two. There is no change in the ordering of options

when no savings are assumed, but increasing the assumed savings does begin to impact the

ordering.

3.6.6 Summary from value for money analysis

The value for money analysis, which combines cost-benefit analysis with the non-financial appraisal,

shows that Options 6 and 10 offer best overall value for money. This is because they have the highest

EAVs and also strong non-financial scores. Options 7/8 and 12 have lower EAVs and lower non-

financial scores. Options 1, 3 and 5 have similar non-financial scores to Options 6 and 10, but much

lower EAVs. Option 13/14 offers worst overall value for money as it has a very low EAV and very poor

non-financial score.

This conclusion has been shown to be very robust to changes in key assumptions, but they should

continue to be reviewed and refined to ensure the best overall value for money can be achieved.

Affordability

3.7.1 Required capital investment

Table 39 sets out the capital investment required for each short-listed option, in both 2016/17 prices

and nominal terms (which includes inflation for spend in future years). It also shows the maximum

capital spend expected within a single year. A breakdown of estimated capital spend for each option,

is provided at Appendix D.


71

Table 39: Capital investment

Option Total capital spend

£m (16/17 prices)

Total capital spend

£m (nominal)

Max capital in single year

£m (nominal)

1 802 1,040 351

3 812 1,074 300

5 789 1,020 299

6 644 762 250

7 / 8 534 710 94

10 641 764 238

12 565 736 88

13 / 14 290 343 106

A significant capital investment would be required for all of the options considered. The greenfield

options (Options 1, 3 and 5) require the greatest capital investment because of the costs involved in

providing the required utilities and access to the site. The capital investment required for these

options is over a third higher than the next highest option (Option 10) when the effects of inflation are

taken into account. The ‘big bang’ implementation of these options also means that they would

require the highest capital investment within a single year than any other option.

The options involving a significant amount of new build on the WGH site, Options 6 and 10, require

greater capital investment than the redevelopment options, Options 7/8 and 12, in 16/17 prices, but

this difference is less marked when the effects of inflation are taken into account due to the phased

implementation of the redevelopment options. The redevelopment options would, however, require

the least capital investment within a single year.

Option 13/14 requires the least capital investment but, as discussed above, this investment would not

address the case for change and would result in a much shorter asset lifetime. Significant further

investment would be required after 30 years in order to ensure WHHT could continue to deliver

services safely.

3.7.2 Financial sustainability

Table 40 sets out the impact of each option on WHHT’s long term financial sustainability. It shows the

year in which WHHT will return to surplus under each option, and the change in cumulative deficit

position in comparison to WHHT’s current Long Term Financial Model (LTFM). More detail is provided

at Appendix D.

Table 40: Impact on financial sustainability

Option Year in which WHHT will return to surplus Cumulative deficit before reaching surplus

(from 16/17 onwards) £m

1 2033/34 -392

3 2033/34 -366

5 2031/32 -369

6 2029/30 -330


72

Option Year in which WHHT will return to surplus Cumulative deficit before reaching surplus

(from 16/17 onwards) £m

7 / 8 2033/34 -340

10 2027/28 -310

12 2031/32 -340

13 / 14 2030/31 -297

This analysis shows that with current assumptions, WHHT would return to a surplus position earliest

under Option 10, closely followed by Option 6. This is because these options could be implemented

most quickly. The greenfield options, Options 1, 3 and 5 would take longer because of the time it

would take to provide the required utilities and access to the site, resulting in a longer implementation

period. WHHT would also take longer to return to a surplus position under Options 7/8 and 12

because of the phased implementation necessary for these options. The anticipated financial benefits

of these options are also lower than full new build options.

While Option 13/14 would allow WHHT to return to a surplus position by 2030/31, as mentioned

above, significant further investment would be required after 30 years in order to ensure WHHT could

continue to deliver services safely.

3.7.3 Summary from affordability analysis

The affordability analysis shows that the greenfield options, Options 1, 3 and 5, require the highest

overall capital investment and the highest amount of capital investment within a single year. Although

these options would result in good financial benefits, the long implementation timeframe and high debt

burden means that it would take longer for WHHT to return to a surplus position than for other

options. These options therefore have poor overall affordability.

The options involving new build on the WGH site, Options 6 and 10, require less capital investment

than the greenfield options, but more than the redevelop options. The strong financial benefits and

shorter implementation timeframes mean that these options result in WHHT returning to a surplus

position more quickly than for the other options considered. These options therefore have reasonable

affordability in the short term and have a positive impact on WHHT’s financial sustainability in the long

term.

The options involving redevelopment of the WGH site, Options 7/8 and 12, require less capital

investment than most other options considered, and the least within a single year. The phased

implementation of these options means that inflation has a greater effect however, and WHHT’s

return to a surplus position would be delayed. These options therefore have relatively good short term

affordability, but the impact on WHHT’s financial sustainability is less good in the long term.

The Do Minimum option, Option 13/14 requires relatively little capital investment, and would allow

WHHT to return to a surplus position relatively quickly, but significant further investment would be

required after 30 years in order to ensure WHHT could continue to deliver services safely and so this

option is not considered to be affordable in the long term.

Preferred way forward

As a result of the options appraisal outlined in the previous sections, it is proposed that:

Options 1, 3 and 5 should be ruled out

All greenfield options (Options 1, 3 and 5) should be ruled out on grounds of both affordability and

value for money. In terms of affordability, Section 3.7 shows that the capital investment required for

these options is at least a third higher than all other options considered and the amount of capital


73

investment required within a single year is also much higher than all other options. This is likely to

make these options prohibitively difficult to finance. It is also unlikely that this level of investment

would be financially sustainable for WHHT in the long term; it would significantly delay WHHT’s return

to a surplus position.

Section 3.6 demonstrates that Options 1, 3 and 5 also offer lower value for money than most other

options considered. The additional benefits they bring are not sufficient to justify the extra cost and

additional risk involved.

The preferred option is for acute hospital services to continue to be provided from WHHT’s

existing estate at Watford and St Albans

The options analysis process has shown that Options 6, 7/8, 10 and 12 each have positives and

negatives. Options 6 and 10 offer the best overall value for money and result in a positive impact on

WHHT’s long term financial sustainability, but they have a higher capital requirement than Options 7/8

and 12 and are therefore less affordable in the short term. The non-financial assessment shows,

however, that Options 6 and 7/8 scored particularly poorly against the Strategic alignment criterion.

This is because these options involve all acute hospital services being delivered from the WGH site.

This approach offers less flexibility for the future and has very poor stakeholder support. The Your

Care, Your Future programme has also made commitments to have a local health facility on the

SACH site and there is strong commissioner support from HVCCG for retaining and further

developing planned care services at SACH.

On this basis, given the similarity on overall value for money and affordability of Options 6 and 10,

and also Options 7/8 and 12, it is proposed that the preferred way forward is for the WGH site to

continue to be the location of emergency and specialised care and for the SACH site to continue to be

the location of planned care, i.e. either Option 10 or 12. The amount of surgery to be undertaken on

the SACH site will, however, continue to be reviewed to ensure that best value for money can be

achieved.

Option 13/14 should be carried forward for the purposes of comparison only

As described in Section 3.4.5, the non-financial appraisal of the options has shown that Option 13/14,

the Do Minimum option, would significantly impede patient experience and would bring considerable

deliverability challenges. It is not able to address the case for change and would not deliver the stated

investment objectives for acute transformation. It is therefore proposed that this option is rejected at

this stage, and carried forward to OBC stage for the purposes of comparison only.

A short list of options within the preferred way forward will be assessed in more detail at OBC

stage

At OBC stage more detailed design work will be undertaken to establish the implementation approach

which is best able to balance value for money and affordability. This is likely to balance new build with

redevelopment and refurbishment of existing buildings, aiming to achieve as close to new build as

possible to ensure the best possible patient experience, with early benefits realisation.

Based on the preferred way forward, further analysis will be undertaken on the following short list of

options to identify a preferred option:

Option 10 – New build emergency and specialised care at WGH site and redevelop planned care

at SACH site.

Option 12 – Redevelop emergency and specialised care at WGH site and planned care at SACH

site.

Option 13/14 – Do minimum refurbishment of emergency and specialised care at WGH site and

planned care at SACH site (for comparison only)


74

This Commercial Case sets out the services required to implement the proposed acute transformation and then explores the potential commercial options to source these. It makes recommendations on how the commercial approach should be explored and assessed in more detail at OBC stage.

Required services

A range of services will be required to successfully implement the proposed acute transformation.

These will differ during the different stages of the project’s lifecycle:

Specialist advice – such as financial, legal, technical and project management, to support WHHT

during the business case development and procurement process.

Design – to design the redeveloped estate in support of the preferred option.

Build – to undertake the proposed construction works.

Finance – to fund the proposed works and transition activities.

Maintain – to maintain the estate once redeveloped, including both hard and soft facilities

management services.

Operate – to provide acute hospital services from the redeveloped estate, in line with the clinical

service model agreed under the Your Care, Your Future programme.

WHHT has in-house capability for estates, finance and service planning, but specialist expertise and

additional capacity will be required throughout the implementation stages. WHHT will, therefore, need

to source these, as well as design, build, finance and maintain services from external providers.

The available commercial delivery options for the required services are inextricably linked to the

chosen financing route, and so the two must be considered in tandem.

Sources of finance

4.2.1 Potential sources of finance

Table 41 sets out the potential sources of finance available to WHHT to fund the proposed acute

transformation, and provides a high level assessment of their suitability.

Table 41: Potential sources of finance

Source of finance Suitability

Internally generated cash NHS trusts may retain internally generated cash over year end for

reinvestment in future years, or receive grants or donations for the purpose of

capital investment. This route is highly unlikely to be available to WHHT at the

level required however, as WHHT is currently in a deficit position and the level

of investment required is unlikely to be met through donations.

COMMERCIAL CASE


75

Source of finance Suitability

Capital investment loan

accessed through NHS

Improvement

Capital investment loan applications are subject to a prudential borrowing

assessment, in which the NHS trust must demonstrate the loan is affordable.

Given WHHT’s financial position and the scale of capital investment required, it

is highly unlikely that the repayments associated with this type of financing

would be affordable to WHHT and therefore this route is not likely to be

available.

Private loan NHS trusts are not permitted to take out private loans but another public sector

organisation, such as HCC, could do so on WHHT’s behalf. This route is

unlikely to offer best value for money however because:

The interest rates payable on private loans are relatively high in comparison

to the rate at which the Government can borrow

This approach would not benefit from the risk transfer which is involved in

other private finance mechanisms.

Public Dividend Capital

(PDC)

Where loans are deemed unaffordable, NHS trusts may be given financing in

the form of PDC. Unlike loans, PDC has no fixed repayment period. If PDC is

available, this would be a good financing option for WHHT.

Public Private Partnership

(PPP)

NHS Trusts are able to pursue private finance through a PPP. Private Finance

2 (PF2) is the replacement for Private Finance Initiative (PFI) and is

Government’s preferred PPP model. If PDC is unavailable, this might be a

good financing option for WHHT, although value for money must be proved,

with the higher borrowing costs more than offset by the level of risk transfer

and innovation.

Based on the high level assessment set out above, there are two financing routes available to WHHT:

Public finance, likely to be in the form of PDC

Private finance, likely to be in the form of PF2, subject to value for money considerations.

4.2.2 Availability of finance

The 2015 Spending Review set the level of capital available to the NHS and the recently published

Capital regime, investment and property business case approval guidance for NHS trusts and

foundation trusts19 confirms that while revenue spending is increasing in real terms, capital

expenditure is more constrained, and access to Department of Health (DH) capital financing is more

restricted than in previous years.

Given the current constraints around public sector capital, PDC is highly unlikely to be available for

the level of investment required by WHHT to fund the entire acute transformation. A PPP, in the form

of PF2 and structured to ensure the private sector takes on an appropriate level of risk, is likely to be

required to fund at least some of the necessary capital investment. A mix of funding solutions may be

appropriate, with different sources used for different elements of the transformation programme in

order to align with different risk profiles. For example, while a private sector partner may be happy to

take on design, build and maintenance risks of a new build, it may be difficult to transfer these risks

for a redevelopment of an existing building. In this case, PDC funding may therefore be more

appropriate. The appropriate mix of funding should be chosen on the basis of best value for money.

19 https://improvement.nhs.uk/resources/capital-regime-investment-and-property-business-case-approval-guidance-nhs-trusts-

and-foundation-trusts/


76

Commercial delivery models

The available commercial delivery models for the required services will vary depending on the

financing source chosen. The following sections provide an overview of the commercial models

available.

4.3.1 Standard building contracts

If public finance is being used to fund the capital investment, a normal competitive tendering process

with standard form of building contracts (such as the New Engineering Contract (NEC) or Joint

Contracts Tribunal (JCT) forms) may be adopted. Under this arrangement, WHHT would be able to

appoint a design team before tendering the fully developed scheme to a number of contractors. This

means that WHHT would retain the design risk in the scheme but is able to include time and cost

overrun protection in the contracts.

4.3.2 ProCure22

Procure22 (P22) is the third iteration of a DH procurement framework providing design and

construction services for use by the NHS and social care organisations for a range of works and

services. It can be used to procure suppliers if public finance is being used to fund the capital

investment.

P22 is a framework agreement with six Principal Supply Chain Partners (PSCPs), selected via an

Official Journal of the European Union (OJEU) tender process. The PSCPs have dedicated supply

chains of over 1,200 small-to-medium-size enterprises (SMEs) that can be mobilised very quickly to

offer expert advice, design and construction services. An NHS organisation or joint-venture may

select a PSCP for a project they wish to undertake without having to go through an OJEU

procurement themselves.

P22 is a suitable procurement route for the following types of work:

Service planning or reconfiguration reviews

Major Works Schemes (or refurbishments)

Minor Works programmes, in which each task value does not exceed £1m

Refurbishments

Infrastructure upgrades (roads, plant, etc.) and non-health buildings (car parks, etc.)

Feasibility studies.

One of the advantages of the P22 method of procurement is that design risk can be transferred if

desired, as the PSCP is contracted to provide a suitable design and build solution at an agreed

Guaranteed Maximum Price (GMP).

4.3.3 Private Finance

A private finance model is an arrangement whereby the public sector contracts to purchase services

from the private sector on a long-term basis. Under the contract, the private sector designs, builds

finances and maintains infrastructure to deliver the services required. The private sector party

contracting with the public sector will normally be a special purpose vehicle (SPV). The SPV will use

private finance, usually a mix of equity and debt, to fund the upfront construction costs and from the

start of the operational phase, the SPV will be paid a fee (the unitary charge). This will include

principal and interest payments on the debt, a return to the private sector shareholders and an

amount for the (non-clinical) services delivered.

A private finance model allows NHS trusts to offset many of the risks of and responsibility for

development to private parties. There have been concerns over the long term value for money offered

by this type of arrangement and so the Government has developed PF2 to address these concerns.

PF2 has a revised standard form contract and accompanying guidance. The PF2 contract


77

incorporates changes to financing, procurement, construction and operational phases of the project.

The key differences from PFI include:

A requirement that the competitive tendering phase of projects takes no longer than 18 months.

The Government will look to invest a proportion of the overall equity requirement in the project

(exact levels are currently being reviewed in line with recent announcements). Third party equity

will be invested at a later stage of the procurement process, which acts as a buffer against the risk

borne by lenders.

A greater standardisation of contract documents with draft services output specification template

and pro-forma payment mechanism for accommodation projects.

Changes in the standard contract around risk allocation in a number of key areas, e.g. off-site

contamination, general changes in law occurring during the operational phase, market changes in

insurance costs and utilities consumption.

Soft facilities management services are excluded from the scope of the project, but procuring

authorities are expected to give thought to including provisions to allow some flexibility around

maintenance obligations.

As outlined above, there is a commitment from the Government that no PF2 projects will be allowed

to take longer than 18 months for the procurement phase from the issue of the tender notice to the

appointment of a preferred bidder. The main milestones within a PF2 procurement are set out in

Figure 13.

Figure 13: PF2 procurement process

4.3.4 Strategic estates partnership

In a Strategic Estates Partnership (SEP), WHHT would procure a private sector partner or consortium

to manage large parts of its estate and support its plans for capital development. SEP arrangements

can be designed in different ways, with the partner taking on different roles as appropriate. At one

extreme it could provide all of the design, build, finance and maintain services, at the other it could

just act as an integrator with other organisations performing the construction works and/or

maintenance.

The Prior Information Notice (PIN) gives the market general details of future procurement intentions.

Issuing a tender in the OJEU begins the formal procurement process.

The Pre-Qualifying Questionnaire (PQQ) is used to identify a shortlist of bidding contractors to proceed with in the procurement.

The Invitation to Participate in Dialogue (ITPD) sets out formally the detailed requirements, the commercial conditions and evaluation criteria.

The procuring authority assesses the responses from bidders against the criteria in the ITPD. There may be more than one down selection round.

The procuring authority selects its preferred bidder following the evaluation.

Notification of the outcome of the procurement tender process and the intention to enter into a contract with a preferred contractor.

Signing of commercial and financial contracts.

PIN

OJEU

PQQ

ITPD

Evaluation

Selection

Standstill

Award


78

A SEP may be an appropriate delivery model for the proposed acute transformation as different

financing sources (including both PF2 and PDC) can be used for different elements of the

programme, to align with different risk profiles.

4.3.5 Amendments/extensions to existing contracts

Existing service contracts

Table 42 summarises the service contracts WHHT currently has in place that may be impacted by the

proposed acute transformation.

Table 42: Existing service contracts

Contract Duration Payment mechanism Comment

Soft FM services

(Cleaning, catering,

portering etc.)

Ten year contract to 2021 Fixed for contract

duration

Currently being reviewed

by WHHT

Hard FM (Maintenance) In-house team supported

by 30+ contracts for

specialist services let on

1-3 year basis

In-house team via

payroll. Contracts via

fixed price will supporting

call off capability for

individual tasks

No current plans to

outsource

Capital projects In-house management

team with separate

contracts for each project

As per contract Under review

Car parking Two year contract for

management of car park

and security services let

until mid-2018

Fixed management fee

with profit share

mechanism

Future delivery of service

included with Watford

Health Campus

agreement.

Security Included in car parking

contract

- To be reviewed by

WHHT in 2017

Non-emergency patient

transport

Contract managed by

HVCCG

- No change expected

There may be opportunities for some of these contracts, such as the provision of soft FM services, to

be extended to provide similar services for the estate once it has been redeveloped, if the capital

works had been financed through public funding.

Watford Campus Agreement

The Watford Campus Agreement and supporting Collaborative Agreement provide a framework for

WHHT to engage Kier (the campus development partner) to undertake some, or all, of any future

development on any of WHHT’s sites. As both agreements were entered into following a competitive

OJEU process, Kier could be engaged without a future tendering process. In these circumstances

WHHT would be required to demonstrate that this procurement route provides value for money.

Actions required at OBC stage to determine the appropriate commercial approach

This SOC has considered the potential sources of finances that might be available to fund the

proposed acute transformation and the commercial delivery models that are available under the


79

different financing options. At this stage it is not possible to confirm the most appropriate commercial

approach to source the required services as there is still uncertainty around the exact design of the

preferred option and market appetite to take on risk around any redevelopment works. It is, however,

likely that a combination of public and private finance will be sought and a SEP may therefore be an

appropriate commercial delivery model. For additional services required that fall outside of this

arrangement, existing contracts and relationships may be exploited.

The following actions will be undertaken at OBC stage to confirm the commercial approach which will

offer best value for money:

Engagement with NSHI and DH to understand the likely availability of PDC as well as the

budgetary treatment and appetite around PPP/PF2 arrangements and SEPs.

Soft market testing with potential funders and developers to test risk appetite.

Commercial options, and associated financing routes, will be assessed as part of the Economic

Case within the OBC, to assess which offers the optimum balance of costs, benefits and risk

transfer.


80

This Financial Case sets out the full financial costs of acute transformation.

The Economic Case has confirmed a preferred way forward for the acute transformation, setting out a short list of options to be assessed in more detail at OBC stage. The Commercial Case has discussed the potential financing arrangements which could be exploited. In the outputs presented in this Financial Case, it is assumed that Option 10, as the option within the preferred way forward that offers best value for money, will be pursued. Outputs for Option 12, as an alternative options within the preferred way forward are also included for comparison. It is assumed that the required capital investment will be funded through PDC.

Costs within the Financial Case are based on the same underlying models as the Economic Case but with non-recoverable VAT and inflation included, in line with HMT guidance.

Financial appraisal

5.1.1 Capital investment

Option 10



follows:













Option 12



follows:


FINANCIAL CASE


81












In these breakdowns it has been assumed that all transition costs will be capitalised. In reality,

however, a proportion of these are likely to be revenue costs. This will be confirmed at OBC stage,

once a detailed transition plan has been developed.

The capital investment will be phased over several years, as summarised in Table 43 and Table 44

for Option 10 and Option 12 respectively. This breakdown is aligned with the outline implementation

plan for each option, developed by WHHT’s Estates team. A more detailed breakdown of the capital

costs is provided at Appendix D.


82

Table 43: Upfront capital investment for Option 10

Cost / £m 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 30/31 Total

Redevelopment of WGH site

Construction costs 82.9 97.3 48.6 36.5 265.3

Equipment and fees 2.0 7.3 7.3 7.3 6.7 8.4 28.3 27.7 95.1

Transition costs 3.2 5.2 2.6 1.9 13.0

Optimism bias 22.5 36.0 18.0 13.5 90.1

Sub-total 2.0 7.3 7.3 7.3 115.4 146.9 97.6 79.7 463.5

Redevelopment of SACH site


Equipment and fees 0.3 1.1 1.1 1.2 3.0 3.0 3.2 13.0

Transition costs 0.6 0.6 0.7 2.0

Optimism bias 2.2 8.2 3.3 13.7

Sub-total 0.3 1.1 1.1 3.7 17.9 24.3 22.1 70.6

Total 2.3 8.4 8.4 11.0 133.3 171.3 119.6 79.7 534.0

VAT allowance 0.5 1.7 1.7 2.5 29.0 29.5 26.1 15.9 106.8

Overall total 2.8 10.1 10.1 13.5 162.3 200.7 145.7 95.6 640.8


83

Table 44: Upfront capital investment for Option 12

Cost / £m 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 30/31 Total

Redevelopment of WGH site

Construction costs 34.2 21.6 21.6 21.6 27.0 27.0 21.6 21.6 16.2 16.2 229.0

Equipment and fees 1.8 5.3 5.3 5.3 2.7 2.7 2.7 17.9 3.0 12.4 2.7 10.3 2.5 8.2 82.7

Transition costs 1.1 1.1 1.1 1.1 1.4 1.4 1.1 1.1 0.8 0.8 11.2

Optimism bias 7.8 7.8 7.8 7.8 9.7 9.7 7.8 7.8 5.8 5.8 77.9

Sub-total 1.8 5.3 5.3 5.3 45.9 33.3 33.3 48.4 41.2 50.6 33.3 40.8 25.4 31.1 400.7

Redevelopment of SACH site


Equipment and fees 0.3 1.1 1.1 1.2 3.0 3.0 3.2 13.0

Transition costs 0.6 0.6 0.7 1.9

Optimism bias 2.2 8.2 3.3 13.7

Sub-total 0.3 1.1 1.1 3.6 17.9 24.3 22.1 70.5

Total 2.1 6.4 6.4 8.9 63.7 57.6 55.4 48.4 41.2 50.6 33.3 40.8 25.4 31.1 471.2

VAT allowance 0.4 1.3 1.3 1.8 12.7 11.5 11.1 9.7 8.2 10.1 6.7 8.2 5.1 6.2 94.2

Overall total 2.5 7.7 7.7 10.7 76.5 69.1 66.4 58.1 49.4 60.7 39.9 49.0 30.5 37.3 565.5


84

5.1.2 Revenue implications

As a result of the reduced estate size and improvement in building design, there will be a decrease to

WHHT’s estate running costs. In Option 10, the new annual estates running costs are estimated to be

£14m (at 16/17 prices), in comparison to the current estimated annual spend of £20m. This is built up

as follows:

Energy: £2.5m p.a.

Water: £0.2m p.a.

Hard FM: £5.2mm p.a.

Soft FM: £3.4m p.a.

Lifecycle costs: £2.7m p.a.

The new estate running costs for Option 12 would also be £14m (at 16/17 prices).

These costs are assumed to be incurred from when the redevelopment works are complete in

2024/25. The impact of these changes on WHHT’s overall financial sustainability are explored in

Section 5.3.

The investment in the estate will also allow WHHT to significantly increase its Cost Improvement

Programmes (CIPs). WHHT’s current CIPs are assumed to deliver annual efficiencies of 4% until

21/22, in line with planning for the STP period, but will then drop to 2.5%. Improvements to the estate

are necessary for WHHT to deliver additional annual efficiencies as a result of improvements to the

layout of the estate, the internal design within departments and the latest technology to support a

digital hospital. These improvements will result in improved patient flow and increased workforce

productivity, leading to additional annual efficiencies of 2.5-3% for three years.

Funding sources

The Commercial Case has discussed the potential sources of finance available to WHHT to fund the

capital investment required for the proposed acute transformation. It has concluded that a mix of

public finance, likely to be in the form of PDC, and private finance, likely to be in the form of PF2, is

the most likely financing solution. This will be examined in more detail at OBC stage.

Affordability

5.3.1 Impact on WHHT’s annual net surplus / deficit position

Table 45 shows WHHT’s annual net surplus/deficit position in baseline scenario. Table 46 and Table

47 show the position under Option 10 and Option 12 respectively. More detail is provided at Appendix

D.

In this assessment it is assumed that the capital investment is financed through PDC, and therefore

capital charges of 3.5% are incurred. This is considered to be a conservative position, as private

finance will only be used if able to offer better value for money than public finance as a result of

greater risk transfer.

With current assumptions, it can be seen that pursuing the proposed acute transformation will result in

WHHT achieving a surplus position much earlier than if the investment was not made: in 2027/28

under Option 10 and 2031/32 under Option 12. The long term financial sustainability position of

WHHT is also improved due to the cost savings enabled.


85

Table 45: WHHT’s annual net surplus/deficit position in baseline scenario

£m 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 30/31 31/32

NHS Income 302 293 295 290 282 284 289 295 300 306 309 312 315 318 321 325

Other Income 23 23 23 23 23 23 23 23 23 23 23 23 23 23 23 23

Pay -220 -217 -213 -205 -195 -196 -198 -200 -202 -204 -205 -207 -208 -210 -212 -213

Non-Pay -114 -116 -119 -120 -122 -122 -124 -125 -127 -128 -129 -131 -133 -134 -136 -138

Non-Operating Expenses -12 -12 -13 -14 -15 -15 -15 -15 -16 -16 -15 -15 -15 -15 -15 -15

Non-Operating Income 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Resulting position -21 -29 -26 -25 -27 -26 -24 -22 -20 -18 -17 -17 -18 -18 -18 -18

Table 46: WHHT’s annual net surplus/deficit position for Option 10

£m 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 30/31 31/32

NHS Income 302 293 295 290 282 284 289 295 300 306 309 312 315 318 321 302

Other Income 23 23 23 23 23 23 23 23 23 23 23 23 23 23 23 23

Pay -220 -217 -213 -205 -195 -196 -198 -200 -196 -192 -188 -188 -189 -189 -190 -220

Non-Pay -114 -116 -119 -120 -122 -122 -124 -126 -117 -115 -113 -114 -114 -115 -115 -114



Resulting position -21 -29 -25 -24 -28 -32 -35 -37 -25 -12 -1 2 4 7 9 11


86

Table 47: WHHT’s annual net surplus/deficit position for Option 12

£m 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 30/31 31/32

NHS Income 302 293 295 290 282 284 289 295 300 306 309 312 315 318 321 325

Other Income 23 23 23 23 23 23 23 23 23 23 23 23 23 23 23 23

Pay -220 -217 -213 -205 -195 -196 -198 -200 -202 -199 -200 -197 -198 -195 -197 -197

Non-Pay -114 -116 -119 -120 -122 -122 -124 -126 -128 -127 -129 -127 -129 -128 -119 -119



Resulting position -21 -29 -25 -24 -26 -27 -26 -27 -26 -18 -18 -12 -13 -6 -1 1


87

5.3.2 Sensitivity analysis

The same sensitivity cases tested in the economic analysis have also been tested for the financial

analysis. This excludes:

The cost of unusual abnormals, as these are not relevant for Options 10 and 12.

The savings from co-location with hubs, as this is a purely economic benefit and would not deliver

cash savings to WHHT.

Table 48 and Table 49 summarise the impact of changes in assumptions on the overall affordability

for WHHT under Options 10 and 12.

Table 48: Scenario analysis for cost drivers

Option

Build cost (Optimism bias) Hospital size (Derogations)

50% 25% 0% 0% 5% 10%

10 29/30 27/28 26/27 28/29 27/28 26/27

12 33/34 31/32 30/31 32/33 31/32 30/31

This analysis shows that varying the build cost per m2 has the biggest impact on affordability of the

sensitivity cases assessed. When the optimism bias adjustment is increased from 25% to 50%, the

year in which WHHT is forecast to return to a surplus position is delayed by two years. The assumed

size of the hospital also has a noticeable impact however.

Table 49: Scenario analysis for benefit drivers

Option

CIP Efficiencies Baseline Hard FM

50% 25% 0% 100% 75% 50%

10 29/30 27/28 27/28 27/28 27/28 27/28

12 33/34 31/32 31/32 31/32 31/32 31/32

This analysis shows that varying the assumed CIP efficiencies has the biggest impact on affordability

of the sensitivity cases tested, again with the potential to delay WHHT’s return to a surplus position by

up to two years.

All of these assumptions should be reviewed and refined during the business case development

process to ensure the preferred way forward remains affordable to WHHT.

Conclusion

The Financial Case has set out the full forecast financial costs of the proposed acute transformation.

A significant amount of capital investment is required, but this is phased over a number of years.

The investment will result in operational cost savings for WHHT; estate running costs will be reduced

and additional CIP efficiencies will be unlocked. This means that the preferred way forward will

improve WHHT’s long term financial sustainability and support it in returning to a surplus position.

This will not be possible if nothing is done.


88

This Management Case sets out how the acute element of the Your Care, Your Future programme is being managed and how the proposed transformation will be delivered.

Project management arrangements

6.1.1 Project management structure

Following the approval of this SOC WHHT will mobilise a project team, committing the necessary time

and resources for a project of this size and scale. Figure 14 shows the proposed project management

structure for the OBC stage of the acute transformation.

Figure 14: Project management structure

Helen Brown, WHHT Deputy Chief Executive and Director of Strategy, will be the Senior Responsible

Owner (SRO), supported by:

Kevin Howell, Director of Environment – responsible for technical aspects of the estate design and

procurement activities

A Programme Director – responsible for the detailed design for clinical services

Fran Gertler, Director of Integrated Care – responsible for developing new models of care as part

of the Your Care, Your Future programme

There will be a number of functional workstreams, overseen by these directors:

Clinical Design – responsible for working with clinical specialties to design the optimum clinical

service model for WHHT, to be implemented through the acute transformation

SRO

PMO

Communications

& Engagement

Finance & Activity

Estates

Clinical DesignProcurement

Workforce

Director of Environment Programme Director Director of Integrated Care

Whole system

pathway redesign

Clinical

Specialties

Communications

Finance /

Informatics

HR

MANAGEMENT CASE


89

Whole system pathway redesign – responsible for working with HVCCG and the wider Your

Care, Your Future programme to redesign the new models of care.

Estates – responsible for developing the detailed design of the preferred option

Procurement – responsible for designing the procurement process and contract documentation

Finance & Activity – responsible for working with WHHT Finance and Informatics teams to model

the future demand and required capacity for acute services, as well as the financial implications of

the proposed acute transformation

Workforce – responsible for working with HR to model the workforce implications of the proposed

clinical service model and preparing for any HR implications

Communications & Engagement – responsible for working with WHHT and HVCCG

communications teams to support stakeholder management and communication

The dedicated Project Management Office (PMO) will ensure that the project is managed in

accordance with best practice, using a robust project management methodology, and provide project

coordination and planning capability to support the Programme Director. It will also hold responsibility

for risk and issues management and planning for benefits realisation.

6.1.2 Use of technical advisors

Specialist technical advisors have been used in a timely and cost-effective way to support internal

resources in the development of this SOC:

PA Consulting: Demand and capacity modelling, cost modelling and business case development

Turner and Townsend: Estate cost estimates and expertise

During the OBC stage, further technical support is expected to be required in the following areas:

Financial

Estates

Procurement and legal

Governance

The core programme team, including the workstream leads and head of the PMO, will meet weekly to

discuss progress, manage interdependencies, review risks and issues and make tactical decisions.

An Acute Transformation Board will meet monthly and will be accountable for successful delivery of

the acute transformation within budget and for the realisation of the anticipated benefits. It will be co-

chaired by the clinical sponsor and SRO and attended by:

Director of Environment

Programme Director

Director of Integrated Care

Director of Communications

Chief Financial Officer

Divisional Directors

Head of PMO

The Acute Transformation Board will be accountable to WHHT’s Finance and Investment Committee

and Trust Executive Committee (TEC), which are both accountable to the WHHT Board. It will receive

clinical guidance from WHHT’s Clinical Advisory Group (CAG).

The acute transformation is part of the Your Care, Your Future programme. The Acute Transformation

Board will therefore also report progress to the Your Care, Your Future Programme Executive Group

and the Hertfordshire and west Essex STP, which are both accountable to the boards of all partner

organisations, most notably HVCCG. This reporting structure is shown in Figure 15.


90

Figure 15: Reporting structure

WHHT will keep NHS England and NHS Improvement updated with progress as part of its business

as usual communications.

Project plan and milestones

The main milestones for the acute transformation, along with the dates by which they are anticipated

to be achieved, are outlined in Table 50. It should be noted, however, that these dates may vary

depending on the choice of preferred option confirmed in the OBC.

Table 50: Milestones

Milestone Anticipated date

SOC approved September 2017

Outline planning application submitted January 2018

Outline planning permission obtained June 2018

OBC submitted July 2018

Output specification developed and tender documentation complete September 2018

OBC approved January 2019

FBC submitted Autumn 2019

FBC approved Spring 2019

Construction begins FY 2019/20

Construction ends Option 10: FY 2023/24

Option 12: FY 2029/3020

20 Option 12 would be in implemented in a phased development, with some benefits delivered from 2022/23

Acute Transformation

Board

Your Care, Your Future

Programme Executive Group /

Hertfordshire and West Essex STP

HVCCG Board WHHT Board

WHHT Clinical

Advisory Group

Trust Executive

Committee

Finance & Investment

Committee


91

Once the preferred option has been defined, consideration will be given to whether the proposed

acute transformation should be separated into separate projects with separate business cases. For

example, it may be appropriate to follow separate business case development processes for the

WGH and SACH sites, once the optimum clinical service model has been designed in detail and the

exact split of services to be provided from each site has been agreed. The development of WGH may

be further split into separate projects, with separate business cases for each phase of the proposed

development.

Some enabling works have already been identified that will be required on the WGH site under all

options within the preferred way forward. Once this SOC has gained approval, these will therefore be

implemented subject to their own business case approvals processes. These are:

Pathology services – In line with Carter recommendations, WHHT is currently considering the

future delivery of its pathology services. This SOC assumes that there will be a requirement for

some on-site pathology provision (a ''hot lab'') but that the majority of the pathology services can

be provided from an off-site location. The current facilities and equipment at WGH are not fit for

purpose and will require substantial investment to modernise. WHHT is therefore undertaking a

formal options appraisal process to determine how best to provide the pathology services it needs

to support health care in the 21st century. No decisions have been made regarding the outcome of

this process, but it is likely that any associated capital investment will need to be sourced through

a commercial partnership (there are many ways to do this, including a lease/managed equipment

service, private finance (PF2) or a fully outsourced model). As such the capital costs associated

with modernising pathology are not included within this SOC. Moving pathology services from their

current location on the WGH site, retaining core 'hot lab' functions on-site, will allow this area to be

redeveloped as part of the acute transformation.

Car park – In order to allow maximum flexibility for redevelopment of the WGH site, WHHT is

considering alternative solutions for the provision of car parking spaces, including a multi-storey

solution. Only half of the space currently used for car parking on the site is owned by WHHT and

the remaining area is owned by WBC and is required for the Watford Health Campus

development. The current arrangements are also sub-optimal as the car park is on a steep hill and

far away from clinical services. Urgent implementation of the preferred option is required to meet

Watford Health Campus timescales and to meet operational requirements.

A high level timeline covering the main acute transformation activities over the next four years is

shown in Figure 16. This includes the two enabling projects mentioned above and also the HHH

redevelopment, which is a key dependency for acute transformation. Once the proposed project

management structure has been established, a detailed plan for OBC stage will be developed,

outlining all the activities necessary to identify the preferred option and prepare for procurement.


92

Figure 16: Outline timeline

Outline risk management approach

The programme has a risk register, provided at Appendix E, with risk owners identified and mitigating

actions recorded. Risks are escalated from the Acute Transformation Board to TEC, WHHT’s Board

and other governance groups as appropriate.

Once the proposed project management structure has been established a full risk management plan

will be developed and implemented. Responsibility for risk and issue management will reside with the

PMO.

Outline stakeholder management approach

6.5.1 Stakeholder engagement approach

Stakeholder management and associated communications activity will be important for the successful

implementation of the proposed acute transformation. There is a statutory requirement to involve and

consult patients and other service users in any service change, and this will be vital to ensure that

future acute hospital services are designed in way that works for them.

During the SOC development, WHHT has worked closely with HVCCG and the Your Care, Your

Future programme to involve stakeholders throughout the options appraisal process and to provide

regular communication about progress. Once the proposed project management structure has been

established a full stakeholder management plan will be developed and implemented, specifically

focused on the acute transformation activities. This will identify and categorise stakeholders, both

internal and external, and outline a proposed engagement and communications approach for each.

Responsibility for stakeholder management will reside with the Communications & Engagement

workstream.

2017 2018 2019 2020

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Acute

Transformation

WGH

Car park

Pathology

Hemel

Hempstead

Hub

SOC OBC FBC

Submitted Approved

Submitted Approved

ApprovedSubmitted

Submitted Approved

Submitted Approved

ApprovedSubmitted

Implementation

Car park open

Submitted Approved

Submitted Approved

ApprovedSubmitted

Path

off-site

Submitted Approved

Submitted Approved

ApprovedSubmitted

Key:


93

6.5.2 Public consultation

Although the proposed acute transformation does not constitute service reconfiguration as set out in

NHS England guidance21, it is acknowledged that the wider Your Care Your Future programme will

involve changes to services in order to deliver more care closer to home, and so the four tests of

service reconfiguration have been followed as far as possible:

Strong public and patient engagement

Consistency with current and prospective need for patient choice

Clear, clinical evidence base

Support for proposals from commissioners

It is not anticipated that a formal public consultation will be required for the proposed acute

transformation. This is because a public consultation was held in 2003, following which the then

Primary Care Trusts (PCTs) in Hertfordshire decided to locate inpatient acute and emergency care

services at Watford. In 2007, the PCTs affirmed this decision and, following a further public

consultation, decided to locate a planned care centre at St Albans. These decisions align with the

preferred way forward set out in this SOC and so, given the level of stakeholder involvement in the

development of this SOC, a formal period of public consultation is not required. Hertfordshire County

Council Scrutiny Committee have confirmed their support for the preferred way forward. They noted a

preference for new build solutions, particularly a full new build on the WGH site. However there was

overall support for the recommendation that emergency and specialist services be provided on the

WGH site, with a planned care centre at SACH.

6.5.3 Equalities impact assessment

As public bodies, both HVCCG and WHHT have a statutory and legal responsibility to ensure fair and

equitable treatment of all people. They are therefore required to work to promote equality (as required

by the Equality Act 2010), and to address health inequalities (as required by the Health and Social

Care Act 2012). To ensure this responsibility has been addressed with respect to the proposed acute

transformation, an Equalities Impact Assessment has been undertaken. This analyses the potential

impact of the proposed changes from an equalities perspective generally, and for people with

protected characteristics specifically, and makes recommendations to address any potential adverse

impacts identified. These recommendations will be taken into account as the detailed design for the

preferred option is developed at OBC stage. Depending upon the final design of this option, further

assessment of the equalities impacts may also be helpful at this stage.

Conclusion

This Management Case has set out the project management and governance arrangements which

will be established for the next stage of the business case development process for the proposed

acute transformation. This will ensure the project is managed in line with best practice and successful

implementation can be secured.

21 https://www.england.nhs.uk/wp-content/uploads/2015/10/plan-ass-deliv-serv-chge.pdf


94

ASSUMPTIONS LOG 96

A.1 Demand assumptions 96

A.2 Capacity assumptions 110

A.3 Schedule of Accommodation 113

A.4 Financial assumptions 119

A.5 Estate assumptions 122

NON-FINANCIAL APPRAISAL 137

B.1 Access 137

B.2 Patient experience 139

B.3 Deliverability 142

B.4 Strategic alignment 144

B.5 Summary 147

ECONOMIC APPRAISALS 149

C.1 Introduction 149









FINANCIAL APPRAISALS 158

D.1 Introduction 158

D.2 Capital costs 159








APPENDICES


95


RISK REGISTER 168

ABBREVIATIONS 170


96

This Appendix contains all of the assumptions used in economic and financial analysis contained within this Strategic Outline Case.

A.1 Demand assumptions

This section sets out all of the assumptions used to forecast the future demand for acute services

provided by West Hertfordshire Hospitals Trust (WHHT).

A.1.1 15/16 activity baseline

The last full financial year, FY 15/16, has been used as the baseline year for activity assumptions.

This section outlines the activity undertaken by WHHT in FY 15/16.

The activity is split into specialty groups which are derived from lower level treatment functions as

shown in the table below.

Table 51: Treatment functions which make up each specialty group

Specialty group Treatment function name Treatment function code

A&E Type 1 – Major 901

A&E Type 1 – Minor 902

A&E Type 3 903

A&E Paediatrics 904

Surgical General surgery 100

Surgical Urology 101

Surgical Breast surgery 103

Surgical Colorectal surgery 104

Surgical Upper surgery 106

Surgical Vascular surgery 107

Surgical Spinal service 108

Surgical Trauma orthopaedics 110

Surgical Ear, nose and throat 120

Surgical Ophthalmology 130

Surgical Oral surgery 140

ASSUMPTIONS LOG


97


Surgical Orthodontics 143

Surgical Cardiac surgery 172

Surgical Accident emergency 180

Surgical Anaesthetics 190

Surgical Pain management 191

Surgical Critical medicine 192

Surgical Paediatric urology 211

Surgical Paediatric ophthalmology 216

Surgical Paediatric surgery 217

Paediatrics Paediatric gastroenterology 251

Paediatrics Paediatric endocrinology 252

Paediatrics Paediatric haematology 253

Medical Paediatric dermatology 257

Paediatrics Paediatric medicine 263

Paediatrics Paediatric fibrosis 264

Medical General medicine 300

Medical Gastroenterology 301

Medical Endocrinology 302

Medical Clinical haematology 303

Medical Clinical physiology 304

Medical Hepatology 306

Medical Diabetic medicine 307

Medical Rehabilitation 314

Medical Clinical immunology 316

Medical Cardiology 320

Paediatrics Paediatric cardiology 321

Medical Stroke medicine 328

Medical Transient attack 329


98


Medical Dermatology 330

Medical Respiratory medicine 340

Medical Respiratory physiology 341

Medical Nephrology 361

Medical Medical oncology 370

Medical Neurology 400

Medical Clinical neurophysiology 401

Medical Rheumatology 410

Paediatrics Paediatrics 420

Paediatrics Neonatology 422

Maternity Well babies 424

Medical Geriatric medicine 430

Maternity Obstetrics 501

Gynaecology Gynaecology 502

Gynaecology Gynaecological oncology 503

Maternity Midwife episode 560

Therapies Physiotherapy 650

Surgical Orthotics 655

Therapies Clinical psychology 656

Therapies Orthotics 658

Therapies Clinical oncology (previously radiotherapy) 800

The activity is further split by point of delivery (POD):

Accident and Emergency (A&E)

Elective care (EL)

Day cases (DC)

Non-elective care (NEL)

Outpatients first appointment (OPFA)

Outpatients follow up appointments (OFPU)

Total figures are provided for WHHT, as well as the split across the three sites:

Watford General Hospital (WGH)

St. Albans City Hospital (SACH)


99

Hemel Hempstead Hospital (HHH)

The tables below contain the activity delivered by for the following acute services:

A&E attendances

Elective, day cases and non-elective admissions

Elective, day cases and non-elective beddays

Elective, day cases and non-elective theatre hours

Outpatient contacts

Table 52: Number of A&E attendances for WHHT in 15/16

Treatment

Function POD

Attendances

WGH SACH HHH Total

Type 1 – Major A&E 26,808 - - 26,808

Type 1 – Minor A&E 39,060 - - 39,060

Type 3 A&E - 14,683 34,524 49,207

Paediatrics A&E 22,805 - - 22,805

Total 88,673 14,683 34,524 137,880

Table 53: Number of admissions for WHHT in 15/16

Specialty

Group POD

Admissions

WGH SACH HHH Total

Surgical EL 2,625 2,721 16 5,362

Paediatrics EL 610 - - 610

Medical EL 501 - 10 511

Maternity EL 2 - - 2

Gynaecology EL 910 187 - 1,097

Therapies EL 0 - - -

Surgical DC 4,382 9,512 4,061 17,955

Paediatrics DC 1,360 - - 1,360

Medical DC 12,068 - 4,477 16,545

Maternity DC 1 - - 1

Gynaecology DC 269 1,194 - 1,463

Therapies DC 13 - - 13


100

Specialty

Group POD

Admissions

WGH SACH HHH Total

Surgical NEL 10,361 4 3 10,368

Paediatrics NEL 4,312 1 2 4,315

Medical NEL 24,600 1 12 24,613

Maternity NEL 13,955 62 110 14,127

Gynaecology NEL 972 - - 972

Therapies NEL 1 - - 1

Total 76,942 13,682 8,691 99,315

Table 54: Number of beddays for WHHT in 15/16

Specialty

Group POD

Beddays

WGH SACH HHH Total

Surgical EL 9,828 5,822 76 15,726


Medical EL 2,215 - 57 2,272

Maternity EL 3 - - 3

Gynaecology EL 2,765 315 - 3,080

Therapies EL - - - 0

Surgical DC 807 2,356 389 3,551

Paediatrics DC 206 - - 206

Medical DC 1,905 - 462 2,367

Maternity DC - - - -

Gynaecology DC 92 337 - 429

Therapies DC 1 - - 1

Surgical NEL 40,286 7 42 40,335

Paediatrics NEL 8,954 9 23 8,986

Medical NEL 145,615 119 499 146,233

Maternity NEL 23,162 28 49 23,239


101

Specialty

Group POD

Beddays

WGH SACH HHH Total

Gynaecology NEL 1,839 - - 1,839

Therapies NEL - - - -

Total 237,921 8,993 1,597 248,510

Table 55: Number of theatre hours for WHHT in 15/16

Specialty

Group POD

Theatre hours

WGH SACH HHH Total

Surgical EL 5,333 4,706 - 10,039


Medical EL 11 - - 11

Maternity EL - - - -

Gynaecology EL 1,622 247 - 1,869

Therapies EL - - - -

Surgical DC 1,439 5,729 - 7,168

Paediatrics DC 20 - - 20

Medical DC - - - -

Maternity DC - - - -

Gynaecology DC 145 759 - 905

Therapies DC - - - -

Surgical NEL 4,097 - - 4,097

Paediatrics NEL 73 - - 73

Medical NEL 404 - - 404

Maternity NEL 53 - - 53

Gynaecology NEL 256 - - 256

Therapies NEL - - - -

Total 13,457 11,441 - 24,898


102

Table 56: Number of outpatient contacts for WHHT in 15/16

Specialty

Group POD

Outpatient contacts

WGH SACH HHH Total

Surgical OPFA 33,314 17,647 13,789 64,750

Paediatrics OPFA 2,657 - 1,910 4,567

Medical OPFA 27,560 7,995 15,532 51,087

Maternity OPFA 9,333 3,857 4,660 17,850

Gynaecology OPFA 6,508 2,910 454 9,872

Therapies OPFA 2,138 1,029 578 3,745

Surgical OPFU 62,074 39,953 18,881 120,908

Paediatrics OPFU 5,494 - 3,536 9,030

Medical OPFU 47,589 14,506 33,762 95,857

Maternity OPFU 32,803 11,526 20,202 64,531

Gynaecology OPFU 3,474 3,416 554 7,444

Therapies OPFU 2,032 1,439 1,445 4,916

Total 234,976 104,278 115,303 454,557

A.1.2 Growth assumptions

This section outlines the assumptions used to forecast the change in demand for acute services in

west Hertfordshire over the next 20 years, from the baseline shown above.

Demographic growth

Demographic growth assumptions account for the changes in activity that can be attributed to

population growth. The Herts Valleys Clinical Commissioning Group (HVCCG) forecast has been

used (based on NHS England forecasts), which are broadly consistent with the Office for National

Statistics (ONS) forecast. Only a 10 year forecast is available and so it is assumed that growth in

Years 11-20 is the same as that in Year 10.

Table 57: Demographic growth assumptions

POD 16/17

(Y1)

17/18

(Y2)

18/19

(Y3)

19/20

(Y4)

20/21

(Y5)

21/22

(Y6)

22/23

(Y7)

23/24

(Y8)

24/25

(Y9)

25/26

(Y10)

Year 11+

A&E 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% p.a.

EL 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% p.a.

DC 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% p.a.

NEL 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% p.a.


103

POD 16/17

(Y1)

17/18

(Y2)

18/19

(Y3)

19/20

(Y4)

20/21

(Y5)

21/22

(Y6)

22/23

(Y7)

23/24

(Y8)

24/25

(Y9)

25/26

(Y10)

Year 11+

OPFA 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% p.a.

OPFU 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% p.a.

Non-demographic growth

Non-demographic growth accounts for other factors, such as pressures arising from increased

prevalence of medical conditions, medical advances, technological developments etc. Overall growth

has been assumed from the Indicative Hospital Activity Model (IHAM) figures, provided by NHS

England as part of the NHS planning guidance for 2016/17 – 2020/21. Non-demographic growth has

been calculated by removing demographic growth (Table 57) from the IHAM figures. Only a 10 year

forecast is available and so it is assumed that growth in Years 11-20 is the same as that in Year 10.

To check the reliability of these non-demographic growth figures, they have been compared to actual

non-demographic growth seen by WHHT over the last five years. This comparison showed that these

growth figures are broadly in line with the exception of NEL activity which has seen an annual growth

rate of around 3% as opposed to 1%. The NEL activity will be included in sensitivity analysis.

Table 58: Non-demographic growth applicable to all options

POD 16/17

(Y1)

17/18

(Y2)

18/19

(Y3)

19/20

(Y4)

20/21

(Y5)

21/22

(Y6)

22/23

(Y7)

23/24

(Y8)

24/25

(Y9)

25/26

(Y10)

Year 11+

A&E 1.3% 1.4% 1.5% 1.4% 1.4% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% p.a.

EL 0.9% 0.9% 1.1% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% p.a.

DC 0.9% 0.9% 1.1% 1.0% 1.0% 1.6% 1.6% 1.6% 1.6% 1.6% 1.6% p.a.

NEL 0.9% 1.1% 1.4% 1.2% 1.1% 1.1% 1.1% 1.1% 1.1% 1.1% 1.1% p.a.

OPFA 2.8% 2.8% 3.0% 2.8% 2.8% 2.8% 2.8% 2.8% 2.8% 2.8% 2.8% p.a.

OPFU 2.8% 2.8% 3.0% 2.8% 2.8% 2.8% 2.8% 2.8% 2.8% 2.8% 2.8% p.a.

A.1.3 Your Care, Your Future demand management

Activity reduction

The Your Care, Your Future programme is delivering more care closer to home. HVCGG has forecast

the impact of the interventions planned as part of this programme on acute activity over the next six

years as part of the Hertfordshire and west Essex Sustainability and Transformation Plan (STP)

submission. The forecast activity reduction for each POD is shown below.

Table 59: Planned HVCCG activity reduction assumptions

Speciality Group A&E EL DC NEL OP

Overall 35% 13% 0% 28% 25%

These values have been combined with analysis conducted by HVCCG using Better Care Better

Value data to breakdown the forecast activity reduction by specialty in order to spread activity

reductions across the specialty groups as follows:


104

Table 60: Planned HVCCG activity reduction assumptions

Speciality Group A&E EL DC NEL OPFA OPFU

A&E 35% - - - - -

Surgical - 15% - 10% 30% 35%

Paediatrics - 5% - 20% 30% 40%

Medical - - - 40% 40% 20%

Maternity - - - - - -

Gynaecology - 15% - 15% 35% 5%

Therapies - 100% - 100% 100% 100%

Length of stay reduction

In addition to reducing activity, the Your Care, Your Future programme will also seek to reduce the

average length of stay (LOS), resulting in a lower number of bed days required for each admission.

The LOS reduction targets have been generated using Dr Foster analysis, which generates the

expected LOS for WHHT for each specialty, and assuming that over the next five years WHHT will

achieve that expected LOS (or better if currently achieving that). The expected LOS in Dr Foster is

calculated based upon the national average LOS for patients with the same clinical and demographic

case-mix as WHHT Trust patient population.

Table 61: Planned length of stay reduction assumptions

Speciality Group A&E EL DC NEL OP

Overall - 8.0% - 4.0% -

Table 62: Planned length of stay reduction assumptions

Speciality Group A&E EL DC NEL OPFA OPFU

A&E - - - - - -

Surgical - 7.0% - 3.0% - -

Paediatrics - 0% - 17.0% - -

Medical - 5.0% - 1.0% - -

Maternity - - - 19.0% - -

Gynaecology - 16.0% - 34.0% - -

Therapies - - - - - -


105

Phasing for interventions

The assumed phasing for the implementation of the Your Care, Your Future interventions between FY

16/17 and FY 21/22 has been developed by HVCCG to support the STP submission.

From Year 10 to Year 20, the net activity growth, combining the effects of demographic growth, non-

demographic growth and interventions, is assumed to continue at the same rate as seen in the first

ten years, i.e. increasing at a net rate of approximately 1%.

The following phasing has been applied to all specialty groups and PODs between FY16/17 and

FY25/26.

Table 63: Intervention phasing assumptions for activity reduction and length of stay reduction

16/17

(Y1)

17/18

(Y2)

18/19

(Y3)

19/20

(Y4)

20/21

(Y5)

21/22

(Y6)

22/23

(Y7)

23/24

(Y8)

24/25

(Y9)

5/26

(Y10)

Y11-

Y20

Phasing 10% 10% 20% 30% 10% 5% 5% 5% 5% 100%

Cumulative - 10% 20% 40% 70% 80% 85% 90% 95% 100% 200%

From 35/36 onwards it is assumed there is no growth due to activity. The hospital is being sized for growth for 10 years beyond its completion date.

A.1.4 Activity movement

Activity movements as a result of Your Care, Your Future

Acute services transferring from Hemel Hempstead Hospital

As mentioned above, the Your Care, Your Future programme is delivering more care close to home.

As part of this programme HHH is becoming a local health facility. It is therefore assumed that many

of the acute services currently provided from HHH will transfer from HHH to the emergency and

specialised care site and planned care site. As the majority of these services are planned care and

diagnostics, it is assumed that the majority will transfer to the planned care site. The exact split

assumed is shown below. It is assumed that the transfer of services will take place in FY 20/21, as

currently planned by the HHH project.

Table 64: Percentage of activity transferring from Hemel Hempstead Hospital to the other two sites

Site Financial year % total of HHH acute services

Emergency and specialised care site 20/21 10%

Planned care site 20/21 90%

Total 20/21 100%

Opening of locality hubs

A number of other locality hubs will also open as part of the Your Care, Your Future programme. A

proportion of the current OP activity will therefore transfer from the existing WHHT sites to these hubs.

The OP activity transfer is assumed to split equally between demand reduction and relocation to

hubs. Of the OP activity moved to hubs, 50% is assumed to come from current WGH activity and 50%

from current SACH OP activity.


106

Other planned activity movements

The table below shows other assumptions about the split of activity across the emergency and

specialised site and the planned care site, in line with WHHT’s clinical strategy.

Table 65: Other activity movements and reduction

Planned movement Value Rationale

EL at planned care site

(surgery / gynaecology) 35%

Assumes that a significant amount of inpatient

procedures will take place at the planned care site

DC at planned care site

(surgery / gynaecology) 80%

Assumes that the majority of DC procedures would

take place at the planned care site

OPFA at planned care site 60%

Assumes outpatient appointments would be

supported by diagnostics at the planned care site

OPFU at planned care site 60%

Assumes outpatient appointments would be

supported by diagnostics at the planned care site

Activity changes due to site location or configuration

It is assumed that there would be 0% change in emergency and specialised care catchment area if it

is located at the Greenfield site as opposed to current site.

It is assumed that for any option which has colocation of emergency and specialised care with

planned care on a single site would result in a 5% reduction in planned care activity.

These assumptions will be sensitivity tested to determine the impact if there were to be a reduction.

End state in FY 35/36 (Year 20)

Table 66 overleaf, shows the split of activity across each site for both the baseline position (FY 15/16)

and each of the short-listed options considered within the options appraisal (FY 35/36).

Where the total for each option does not equal 100% for the specialty group and POD, this is due to

movement of activity to locality hubs, demand management and/or activity leaving WHHT due to

changes in the catchment area.

Activity shift – phasing of activity shift across options

Table 67 shows the phasing for the activity shifts for each option based upon the construction profiles

developed by the WHHT estates team. 100% indicates that the end state has been achieved for that

site.


107

Table 66: Split of activity by site for each option in Year 20 (35/36)

As Is 1 3 5 6 7&8 10 12 14

Specialty Group and

POD

WGH

15/16

SACH

15/16

HHH

15/16

GF

35/36

GF

35/36

WGH

35/36

GF

35/36

SACH

35/36

WGH

35/36

WGH

35/36

WGH

35/36

SACH

35/36

WGH

35/36

SACH

35/36

WGH

35/36

WGH

35/36

A&E 100% 0% 0% 100% 65% 35% 65% 35% 100% 100% 65% 35% 65% 35% 65% 35%

Surgical EL 62% 37% 0% 100% 100% 0% 100% 0% 100% 100% 100% 0% 100% 0% 100% 0%

Paediatrics EL 100% 0% 0% 100% 100% 0% 100% 0% 100% 100% 100% 0% 100% 0% 100% 0%

Medical EL 97% 0% 3% 100% 100% 0% 100% 0% 100% 100% 100% 0% 100% 0% 100% 0%

Maternity EL 100% 0% 0% 100% 65% 35% 65% 35% 100% 100% 65% 35% 65% 35% 65% 35%

Gynaecology EL 90% 10% 0% 100% 0% 100% 0% 100% 100% 100% 0% 100% 0% 100% 0% 100%

Surgical DC 23% 66% 11% 100% 100% 0% 100% 0% 100% 100% 100% 0% 100% 0% 100% 0%

Paediatrics DC 100% 0% 0% 100% 100% 0% 100% 0% 100% 100% 100% 0% 100% 0% 100% 0%

Medical DC 80% 0% 20% 100% 100% 0% 100% 0% 100% 100% 100% 0% 100% 0% 100% 0%

Maternity DC 100% 0% 0% 100% 20% 80% 20% 80% 100% 100% 20% 80% 20% 80% 20% 80%

Gynaecology DC 21% 79% 0% 100% 0% 100% 0% 100% 100% 100% 0% 100% 0% 100% 0% 100%

Surgical NEL 100% 0% 0% 100% 100% 0% 100% 0% 100% 100% 100% 0% 100% 0% 100% 0%

Paediatrics NEL 100% 0% 0% 100% 100% 0% 100% 0% 100% 100% 100% 0% 100% 0% 100% 0%

Medical NEL 100% 0% 0% 100% 100% 0% 100% 0% 100% 100% 100% 0% 100% 0% 100% 0%

Maternity NEL 100% 0% 0% 100% 100% 0% 100% 0% 100% 100% 100% 0% 100% 0% 100% 0%


108

As Is 1 3 5 6 7&8 10 12 14

Specialty Group and

POD

WGH

15/16

SACH

15/16

HHH

15/16

GF

35/36

GF

35/36

WGH

35/36

GF

35/36

SACH

35/36

WGH

35/36

WGH

35/36

WGH

35/36

SACH

35/36

WGH

35/36

SACH

35/36

WGH

35/36

WGH

35/36

Gynaecology NEL 100% 0% 0% 100% 100% 0% 100% 0% 100% 100% 100% 0% 100% 0% 100% 0%

Surgical OPFA 51% 27% 21% 60% 28% 42% 28% 42% 60% 60% 28% 42% 28% 42% 28% 42%

Paediatrics OPFA 58% 0% 42% 50% 24% 36% 24% 36% 50% 50% 24% 36% 24% 36% 24% 36%

Medical OPFA 54% 16% 30% 90% 40% 60% 40% 60% 90% 90% 40% 60% 40% 60% 40% 60%

Maternity OPFA 52% 22% 26% 55% 26% 39% 26% 39% 55% 55% 26% 39% 26% 39% 26% 39%

Gynaecology OPFA 66% 29% 5% 90% 40% 60% 40% 60% 90% 90% 40% 60% 40% 60% 40% 60%

Surgical OPFU 51% 33% 16% 50% 24% 36% 24% 36% 50% 50% 24% 36% 24% 36% 24% 36%

Paediatrics OPFU 61% 0% 39% 70% 32% 48% 32% 48% 70% 70% 32% 48% 32% 48% 32% 48%

Medical OPFU 50% 15% 35% 90% 40% 60% 40% 60% 90% 90% 40% 60% 40% 60% 40% 60%

Maternity OPFU 51% 18% 31% 85% 38% 57% 38% 57% 85% 85% 38% 57% 38% 57% 38% 57%

Gynaecology OPFU 47% 46% 7% 90% 40% 60% 40% 60% 90% 90% 40% 60% 40% 60% 40% 60%


109

Table 67: Phasing planned activity shifts for each option

Option Site Care 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 30/31 31/32 32/33 33/34

Option 1

GF Emergency 100% 100% 100% 100% 100% 100% 100%

GF Planned 100% 100% 100% 100% 100% 100% 100%

Option 3 GF Emergency 100% 100% 100% 100% 100% 100% 100%

WGH Planned 100% 100% 100%

Option 5 GF Emergency 100% 100% 100% 100% 100% 100% 100%

SACH Planned 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

Option 6

WGH Emergency 100% 100% 100% 100% 100% 100% 100% 100% 100%

WGH Planned 100% 100% 100% 100% 100% 100% 100% 100% 100%

Option

7&8

WGH Emergency 40% 40% 65% 65% 65% 85% 100% 100%

WGH Planned 40% 40% 65% 65% 65% 85% 100% 100%

Option 10

WGH Emergency 100% 100% 100% 100% 100% 100% 100% 100% 100%

SACH Planned 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

Option 12

WGH Emergency 40% 40% 65% 65% 85% 100% 100% 100%

SACH Planned 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

Option

13&14

WGH Emergency 100% 100% 100% 100% 100% 100% 100% 100% 100%

SACH Planned 100% 100% 100% 100% 100% 100% 100% 100% 100%


110

A.2 Capacity assumptions

This section sets out all of the assumptions used to calculate the capacity required to meet the future

demand for acute services.

A.2.1 Availability assumptions

This section outlines the proportion of time for which outpatient rooms / beds / theatres are assumed

to be available for use. The availability assumptions have been informed by operational staff, based

on information supplied by the informatics team, and are the same for all specialty groups.

Outpatient rooms

Outpatient rooms are assumed to be available for 3 x 3.5 hour sessions each day, for six days a

week. The number of weeks available per year also takes into account downtime for any room

maintenance, and holiday periods. This assumes a higher utilisation of rooms than currently as the

direction of travel is towards seven-day working.

Table 68: Number of hours an outpatient room is available per year

Weekday Hours Weekend Hours Total hours / week Weeks available /

year

Total available

hours / year

52.5 10.5 63 50 3,150

Beds

The assumed availability for elective and non-elective beds is shown in Table 69.

Again these assumptions assume that elective activity will move towards seven-day working.

Table 69: Number of days a bed is available per year

POD Number of week

days available

Number of weekend

days available

Total weeks /

year

Available days /

year

Elective 5 1 50 300

Non-elective 5 2 50 350

Theatres

The assumed availability for theatres is shown in Table 73.

This assumes a move towards seven-day working elective activity including extended hours as per

the theatre Outline Business Case.

Table 70: Total number of theatre hours per year for each POD for theatre planning.

POD

Number of

weekday hours

available

Number of

weekend hours

available

Total

hours /

week

Total

weeks /

year

Total

available

hours / year

Elective 55 10 65 50 3,250

Non-elective 60 24 84 50 4,200


111

A.2.2 Utilisation assumptions

This section outlines the proportion of time for which outpatient rooms / beds / theatres are assumed

to be utilised during their available hours. The utilisation percentage takes into account

room/bed/theatre not ready, staff absent, and downtime/preparation time. The utilisation assumptions

are the same for each specialty group within each POD and have been agreed with operational staff

as well as the informatics team. These assumptions do not vary between configuration options.

Rooms for outpatients activity

Table 71: Average utilisation for appointments for each outpatient POD

POD Average planned weekday

appointment utilisation

Average planned weekend

appointment utilisation

Outpatient first appointment 80% 80%

Outpatient follow up appointment 80% 80%

Beds for elective, day cases and non-elective activity

This assumes utilisation is at the guidance/planning level of 85%. Currently utilisation is higher than

this across the trust in both Elective and Non-Elective wards.

Table 72: Average utilisation for beds for each inpatient and day case POD.

POD

Average planned

weekday bed

utilisation

Average planned

weekend bed

utilisation

Average current

weekday bed

utilisation

Average current

weekend bed

utilisation

Elective 85% 85% 92% 50%

Non-elective 85% 85% 88% 88%

Theatres for elective, day cases and non-elective activity

The utilisation for Non-Elective theatres accounts for the fact that a single theatre capacity needs to

be left available for emergency use.

Table 73: Average utilisation for theatres for each inpatient and day case POD.

POD Average planned weekday

theatre utilisation

Average planned weekend

theatre utilisation

Elective 85% 85%

Non-elective 68% 68%

A.2.3 Capacity assumptions

This section uses the availability and utilisation assumptions to calculate the length of time for which

outpatient rooms / beds / theatres are assumed to be utilised.


112

Number of appointments per outpatient room

To calculate the maximum number of appointments available per year per outpatient room, the total

hours per year that a room is available is multiplied by the utilisation percentage. This figure is then

divided by the number of appointments per hour (minutes / appointment divided by 60 minutes)

assumed when planning the number of required rooms.

Table 74: Total appointments per year for each outpatient room

POD Minutes / appointment Utilised hours / year Total appointments / year

OPFA 25 2,520 6,048

OPFU 20 2,520 7,560

Number of beddays per bed

To calculate the maximum number of beddays available per year per bed, the total number of

available days per year is multiplied by the utilisation percentage.

Table 75: Total number of beddays per year per bed

POD Available days / year Available beddays / year / bed

Elective 300 255

Non-elective 350 298

Number of theatre hours per theatre

To calculate the maximum number of theatre hours available per year per theatre, the total number of

available theatre hours per year is multiplied by the utilisation percentage.

Table 76: Total number of theatre hours per year per theatre

POD Total available hours / year Available theatre hours / year / theatre

Elective 3,250 2,763

Non-elective 4,200 2,835

A.2.4 ‘Did Not Attend’ assumptions

Although the required capacity needs to take into account ‘Did not attends’ (DNAs), it is assumed that

a significant amount of the potential impact will be mitigated by reducing the number of DNAs and

intentionally overbooking for some specialties. Only 25% of the current level of DNAs has therefore

been included in calculating the required capacity.

Table 77: DNA assumptions for outpatient appointments

Specialty Group Current DNA rate

for OPFA

25% applied in

capacity modelling

Current DNA rate

for OPFU

25% applied in

capacity modelling

Surgical 10% 3% 12% 3%

Paediatrics 12% 3% 17% 4%


113

Specialty Group Current DNA rate

for OPFA

25% applied in

capacity modelling

Current DNA rate

for OPFU

25% applied in

capacity modelling

Medical 12% 3% 11% 3%

Maternity 6% 2% 5% 1%

Gynaecology 6% 2% 12% 3%

A.3 Schedule of Accommodation

A high level schedule accommodation has been produced which generates the area (in m2)

requirement for each department and the overall m2 requirement for each site. This schedule of

accommodation was based upon a detailed schedule of accommodation plan developed for WHHT in

2012 which detailed a full room breakdown for every department in a future hospital at the Watford

site. This plan was developed using HBNs and the m2 assumptions from this document were used in

the Capacity model to develop updated m2 requirements given new demand assumptions.

Departments were split into three categories as follows

Demand Driven – Where the size of the department was determined by levels of activity which

could be taken directly from the activity model

Semi Static – Where the size of the department was determined by levels of activity, but that

activity needed to be determined separately from the activity model

Static – Where the size of the department was just determined by a fixed m2 assumptions.

Departments include in the schedule of accommodation are shown below.

Table 78: Departments included in the schedule of accommodation

Demand Driven Semi Static Static

Emergency Department – Adults

Emergency Department – Paediatrics

Medical Wards (Elective)

Surgical Wards (Elective)

Medical Wards (Day Case)

Surgical Wards (Day Case)

Medical Wards (Non Elective)

Surgical Wards (Non Elective)

Obstetrics Wards

Paediatric Wards

Theatre Suite (Emergency Care)

Theatre Suite (Planned Care)

Theatre Suite (Obstetrics &

Gynaecology)

Delivery Suite

Birthing centre

Outpatients – Medical

Outpatients – Surgical

Outpatients – Women & Children’s

Mortuary & Bereavement

Pharmacy

Radiology Department

Clinical Office Requirements

Ambulatory Care Unit

Cath Labs

Coronary Care (CICU)

Critical Care (ICU)

Stroke Unit

Endoscopy Suites

Medical Assessment Unit

Surgical Assessment Unit

Dialysis Unit

Pre-operative assessment

Day Surgery Unit

Vascular Lab

Antenatal

Early Pregnancy Assessment Unit

(EPAU)

Neonatal Unit

Paediatrics outpatient department

(OPD) and day case unit (DCU)

Medical Photography

Pathology Hot Lab

Central Staff Change

Main Entrance

Multi Faith Centre

Bed Store

Clinical Engineering

FM Offices

Kitchen

Laundry

Porters Lodge & Security

Restaurant

Logistics

Admin Offices


114

The tables on the following pages show the gross departmental area assumed in the schedule of

accommodation. They include the following planning assumptions:

A 40% uplift is applied to each department to account for Planning, Engineering and Circulation.

A 30% uplift is applied to the total departmental area to account for estate wide Plant and

Engineering.


115

Table 79: Demand driven assumptions

Gross Departmental Area /

m2

1 3 5 6 7&8 10 12 13&14

GF GF WGH GF SACH WGH WGH WGH SACH WGH SACH WGH SACH

Emergency Department – Adults 1,026 1,026 1,026 1,026 1,026 1,026 1,026 1,026

Emergency Department –

Paediatrics

294 294 294 294 294 294 294 294

Medical Wards (NEL) 10,514 10,514 10,514 10,514 9,710 10,514 9,710 8,770

Surgical Wards (NEL) 7,360 7,360 7,360 7,360 6,797 7,360 6,797 6,139

Medical Wards (EL) 526 526 526 526 486 526 486 438

Surgical Wards (EL) 2,629 1,577 1,051 1,577 1,051 2,629 2,428 1,577 1,051 1,457 971 1,315 877

Medical Wards (DC) 2,061 2,061

2,061

2,061 1,900 2,061

1,900

1,712

Surgical Wards (DC) 3,091 1,030 2,576 1,030 2,576 3,091 2,850 1,030 2,576 950 2,375 856 2,140

Outpatient Facilities - Medical 1,506 740 1,105 740 1,105 1,506 1,506 740 1,105 740 1,105 740 1,105

Outpatient Facilities - Surgical 1,531 763 1,128 763 1,128 1,531 1,531 763 1,128 763 1,128 763 1,128

Outpatient Facilities - W&C 1,656 831 1,200 831 1,200 1,656 1,656 831 1,200 831 1,200 831 1,200

Theatre Suite (Emergency Care) 1,246 1,246

1,246

1,246 1,246 1,246

1,246

1,246

Theatre Suite (Planned Care) 2,758 1,498 2,002 1,498 2,002 2,758 2,758 1,498 2,002 1,498 2,002 1,498 2,002

Delivery Suite 1,036 1,036 1,036 1,036 1,036 1,036 1,036 1,036

Birthing centre 532 532 532 532 532 532 532 532


116


m2

1 3 5 6 7&8 10 12 13&14


Obstetrics Wards 1,523 1,523 1,523 1,523 1,523 1,523 1,523 1,523

Paediatric Wards 1,579 1,579 1,579 1,579 1,579 1,579 1,579 1,579

Theatre Suite (Obs & Gynae) 1,498 1,498 1,498 1,498 1,498 1,498 1,498 1,498

Table 80: Semi-static assumptions


m2

1 3 5 6 7&8 10 12 13&14


Mortuary & Bereavement 525 525

525

525 525 525

525

525

Pharmacy 1,050 700 350 700 350 1,050 1,050 700 350 1,050 350 700 350

Radiology Dept (OP) 4,130 3,080 1,584 3,080 1,584 4,130 4,130 3,080 1,584 3,080 1,584 3,080 1,584

Clinical Office Requirements 1,960 1,960 490 1,960 490 1,960 1,960 1,960 490 1,960 490 1,960 490

Ambulatory Care Unit (Medical

Day Unit)

946 946 946 946 946 946 946 946

Cath Labs 560 560 560 560 560 560 560 560

Coronary Care (CICU) 134 134 134 134 134 134 134 134

Critical Care (ICU) 860 860 860 860 860 860 860 860

Stroke Unit 134 134 134 134 134 134 134 134


117


m2

1 3 5 6 7&8 10 12 13&14


Endoscopy Suites 1,750 1,050 1,050 1,050 1,050 1,750 1,750 1,050 1,050 1,050 1,050 1,050 1,050

Medical Assessment Unit 566 566 566 566 566 566 566 566

Surgical Assessment Unit (pre

surgery NEL)

566 566 566 566 566 566 566 566

Dialysis Unit 742 742 742 742 742 742 742 742

Pre-operative assessment (EL) 280 280 280 280 280 280 280 280

Day Surgery Unit 504 504 504 504 504 504 504 504

Vascular Lab 175 175 175 175 175 175 175 175

Antenatal 840 840 840 840 840 840 840 840

EPAU 175 175 175 175 175 175 175 175

Neonatal Unit 1,282 1,282 1,282 1,282 1,282 1,282 1,282 1,282

Paeds OPD & DCU 280 280 280 280 280 280 280 280


118

Table 81: Static assumptions


m2

1 3 5 6 7&8 10 12 13&14


Medical Photography 220 220 220 220 220 220 220 220

Pathology Hot Lab 400 400 400 400 400 400 400 400

Central Staff Change 750 750 750 750 750 750 750 750

Main Entrance 1,238 1,238 350 1,238 350 1,238 1,238 1,238 350 1,238 350 1,238 350

Multi Faith Centre 180 180 180 180 180 180 180 180

Bed Store 100 100 50 100 50 100 100 100 50 100 50 100 50

Clinical Engineering 261 261 100 261 100 261 261 261 100 261 100 261 100

FM Offices 110 110 110 110 110 110 110 110

Kitchen 991 600 300 600 300 991 991 600 300 600 300 600 300

Laundry 30 30 30 30 30 30 30 30 30 30 30 30 30

Porters Lodge & Security 105 105 50 105 50 105 105 105 50 105 50 105 50

Restaurant 735 600 300 600 300 735 735 600 300 600 300 600 300

Logistics 338 338 338 338 338 338 338 338

Admin Offices 2,000 1,500 500 1,500 500 2,000 2,000 1,500 500 1,500 500 1,500 500


119

A.4 Financial assumptions

This section outlines the assumptions used to forecast changes to WHHT’s costs under each option.

A.4.1 Global assumptions

The following global assumptions are made in the economic and financial analysis, applicable to all

options.

Table 82: Financial and economic analysis assumptions

Assumption Value Source / comment

Discount rate Y1-30 3.5% HMT Green Book (applied in economic analysis only)

Discount rate Y31+ 3.0% HMT Green Book (applied in economic analysis only)

VAT on construction costs 20%

VAT is assumed not to be recoverable (applied in

financial analysis only)

A.4.2 Cost classification assumptions

The last full financial year, FY 15/16, has been used as the baseline year for cost assumptions. Each

cost from WHHT’s General Ledger has been mapped to one of three cost classifications:

Variable

Semi-fixed

Fixed

The cost classification determines the extent to which the cost of a service changes as a result of

changes in relevant activity. For example, drug costs are mainly classed as variable, which is 100%

elastic, because if activity demand increases by 10% the cost of drugs also increases by 10%

(excluding inflation) as more drugs are required to meet the demand. An example of a fixed cost is the

Trust’s finance function; if the number of admissions or bed days increases, it is assumed that the

cost of the finance function would stay the same (zero elasticity) and only increase by inflation.

Table 83: Cost classification assumptions

Cost Classification Elasticity Source / comment

Variable 100%

Semi-fixed 100% Normally c.70% but as there are CIP efficiencies this is 100%.

Fixed 0% Overall, c.35% of all the costs have been classified as fixed

A.4.3 Inflation assumptions

Cost inflation assumptions

Costs are assumed to increase due to inflation as shown in the table below. This is based on the

economic assumptions 2016/17 to 2020/21, published by NHS Improvement on 23 March 2016. For

Years 6+, costs are assumed to increase by the same rate as the average % for the first five years,

except for litigation costs which return to a 2% inflation.


120

Table 84: Cost inflation assumptions

Cost Category 16/17 (Y1) 17/18 (Y2) 18/19 (Y3) 19/20 (Y4) 20/21 (Y5) Year 6 – 30

Pay and Pensions 3.3% 2.0% 1.6% 1.6% 2.9% 2.3% p.a.

Drugs 4.5% 4.6% 3.6% 4.1% 4.1% 4.1% p.a.

Litigation 11.7% 17.5% 17.5% 17.5% 17.5% 2.0% p.a.

Other operating costs 1.7% 1.8% 2.1% 1.9% 2.0% 2.0% p.a.

All operating costs 3.6% 2.8% 2.5% 2.5% 3.4% 2.3% p.a.

Tariff inflation assumptions

Income is assumed to increase due to tariff inflation as shown in the table below. The underlying rate

of increase is based on the economic assumptions 2016/17 to 2020/21, published by NHS

Improvement on 23 March 2016. For Years 6+, tariff inflation is set to offset the annual cost pressure

less a 2.0% Cost Improvement Programme (CIP) efficiency. Since operating cost pressures are

modelled to be 2.3% from Year 6 onwards, this sets the tariff inflator at 0.3% from 21/22 onwards.

Clinical negligence uplift to tariff is assumed to cease from Year 6 onwards.

Table 85: Income inflation assumptions

Income inflation 16/17 (Y1) 17/18 (Y2) 18/19 (Y3) 19/20 (Y4) 20/21 (Y5) Year 6 – 30

Underlying inflation 1.10% 0.30% 0.00% 0.00% 0.90% 0.30% p.a.

Clinical negligence 0.70% 0.53% 0.53% 0.53% 0.53% 0.00% p.a.

Net income inflation 1.80% 0.83% 0.53% 0.53% 1.43% 0.30% p.a.

A.4.4 Efficiency assumptions

Cost Improvement Programme efficiency assumptions

WHHT has cost reduction assumptions for Years 1-5 in its Long Term Financial Model (LTFM). These

are assumed at 4.0% per year, with 0.5% gained from additional contribution due to activity growth

over the fixed cost base, and 3.5% from pure cost reduction.

For Years 6-10 CIP efficiencies are assumed to drop to 2.5%, then down to 2.0% from Year 11-20,

dropping to 1.5% from year 21-30 due to no activity growth. These assumptions do not vary by option,

and are not contingent on any investment in WHHT’s estate.

Table 86: CIP efficiency assumptions

Cost category 16/17

(Y1)

17/18

(Y2)

18/19

(Y3)

19/20

(Y4)

20/21

(Y5)

Y6 – 10

(p.a.)

Y11 – 20

(p.a.)

Y21– 30

(p.a.)

Pay and

Pensions

4.2% 3.20% 3.2% 3.2% 3.2% 2.1% 1.6% 1.6%

Drugs 5.1% 4.1% 4.1% 4.1% 4.1% 3.9% 3.4% 3.4%

Litigation 4.2% 3.2% 3.2% 3.2% 3.2% 1.8% 1.3% 1.3%


121

Cost category 16/17

(Y1)

17/18

(Y2)

18/19

(Y3)

19/20

(Y4)

20/21

(Y5)

Y6 – 10

(p.a.)

Y11 – 20

(p.a.)

Y21– 30

(p.a.)

FM costs 0% 0% 0% 0% 0% 0% 0%. 0%.

Other

operating costs

4.2% 3.2% 3.2% 3.2% 3.2% 1.8% 1.3%. 1.3%.

All operating

costs*

4.5% 3.5% 3.5% 3.5% 3.5% 2.0% 1.5% 1.5%

Full operating

costs**

5.0% 4.0% 4.0% 4.0% 4.0% 2.5% 2.0% 1.5%

* Year 1-5 “All operating costs” have been taken from the LTFM. This has been tested to ensure it aligns with the

longer term affordability picture produced by the SOC

** The final stated operating cost efficiencies include contribution due to activity growth over 35% fixed cost base.

This additional contribution stops after Year 20 (35/36) due to halting activity growth in the model in order to right

size the hospital.

Additional cost savings as a result of investment

All options will result in improvements to the acute hospital estate. The following assumptions have

been assumed in terms of an increase in CIP efficiencies for each option.

Table 87: Efficiency improvements above CIP

Option Annual efficiency Improvement above CIP

baseline (Y1-Y3 after site open)

Annual efficiency Improvement above CIP

baseline (Y4+ after site open)

1 3.0% 0.5%

3 3.0% 0.5%

5 3.0% 0.5%

6 3.0% 0.5%

7&8 2.5% 0.5%

10 3.0% 0.5%

12 2.5% 0.5%

13&14 0.5% 0.5%

This gives the following CIP profiles across all options.

Table 88: CIP profiles

Option Y1-5 Y6-10 Site Open (1-3) Y11-20 Y21-30

1 4% 2.5% 5.0% 2.5% 2.0%

3 4% 2.5% 5.0% 2.5% 2.0%


122

Option Y1-5 Y6-10 Site Open (1-3) Y11-20 Y21-30

5 4% 2.5% 5.0% 2.5% 2.0%

6 4% 2.5% 5.0% 2.5% 2.0%

7&8 4% 2.5% 4.5% 2.5% 2.0%

10 4% 2.5% 5.0% 2.5% 2.0%

12 4% 2.5% 4.5% 2.5% 2.0%

13&14 4% 2.5% 2.5% 2.5% 2.0%

baseline 4% 2.5% 0% 2.0% 1.5%

The phasing of the efficiency improvements are assumed to match the introduction of the new

emergency and specialised care site, as shown in Table 89.

Table 89: Phasing for the reduction in staff costs as a result of new build or redevelopment

Option 23/24

(Y8)

24/25

(Y9)

25/26

(Y10)

26/27

(Y11)

27/28

(Y12)

8/29

(Y13)

29/30

(Y14)

30/31

(Y15)

31/32

(Y16)

32/33

(Y17)

33/34

(Y18)

Option 1 100% 100% 100%

Option 3 100% 100% 100%

Option 5 100% 100% 100%

Option 6 100% 100% 100%

Option 7&8 100% 100% 100%

Option 10 100% 100% 100%

Option 12 100% 100% 100%

Option 13&14 100% 100% 100%

A.5 Estate assumptions

The estate costs and definitions have been developed by the WHHT Estates team and external

advisors.

A.5.1 Estate building definitions

‘New Build’ is defined as the construction of an entirely new building. New Build costs have been

assumed to be similar at both the greenfield site in Kings Langley and the existing WGH site. Any

differences between these two sites have been captured as abnormal costs.

‘Redevelopment’ includes a spectrum of construction works, including some new build. Three different

levels of refurbishment have been considered:

Heavy refurbishment

Medium refurbishment

Light refurbishment


123

These three levels of refurbishment are summarised in the following tables:

Table 90: Requirement assumptions for the different types of refurbishment

Refurbishment type Heavy refurbishment Medium refurbishment Light refurbishment

External structure Assumes existing

external structures are

suitable and do not

require rebuilt or any

modifications

Assumes existing


suitable and do not


modifications

Assumes existing


suitable and do not


modifications

Internal structure Assumes internal

structures require major

changes e.g. removal of

internal walls / full

reconfiguration of existing

layout

Assumes internal

structures require limited

changes i.e. stud walls,

bricking up windows.

Assumes internal

structures in place are

suitable and do not

require reconfiguration

Furniture, Fixtures and

Equipment

Assumes replacement of

all Group 1 items (items

(including terminal

outlets) which are

supplied and fixed within

the terms of the building

contract).



(including terminal

outlets) which are



contract).



(including terminal

outlets) which are



contract).

Mechanical and

Electrical (including IT

infrastructure)

Full replacement Assumes no replacement

of mechanical and

electrical plant but

replacement of

distribution

No works

Finishes Assume extensive new

internal finishes

Assume limited internal

finishes

Assume limited internal

finishes

Example scenario Major change (i.e.

administrative to acute

clinical) with structural

alterations and complete

internal refurbishment.

Change of room use (i.e.

administrative to

consulting room) with

very minor structural

alternations and

superficial internal

refurbishment.

Superficial internal

refurbishment (i.e.

refresh of administrative

space)

A.5.2 Estate build requirements for each option

The table below shows the breakdown of new build, heavy refurbishment, medium refurbishment and

light refurbishment assumed at each site within each option. These assumptions are based on a

review of the buildings available on each site and the works required to allow them to be used in the

way assumed for each option. See Sections 3.5.9 to 3.5.13 for the outline plans for each site under

each option.


124

Table 91: Build requirements at each site for each option

Option Site New Build Heavy

Refurbishment

Medium

Refurbishment

Light

Refurbishment

1 Greenfield 100% - - -

WGH - - - -

SACH - - - -


WGH 33% 67% - -

SACH - - - -


WGH - - - -

SACH 28% - 27% 45%

6 Greenfield - - - -

WGH 100% - - -

SACH - - - -

7&8 Greenfield - - - -

WGH 62% 18% 13% 7%

SACH - - - -


WGH 100% - - -

SACH 28% - 27% 45%


WGH 57% 34% 9% -

SACH 28% - 27% 45%

13&14 Greenfield - - - -

WGH 15% - - 85%

SACH 28% - - 72%

Derogations

Whilst the current WHHT estate was compliant to the relevant standards at the time of construction, it

does not comply with current standards as lain down in Health Building Notes (HBN) or Health

Technical Memoranda (HTM). This SOC has been developed on the basis of:


125

New Build: Full compliance to HBN and HTM requirements.

Redevelopment: Compliance with HTM requirements with some derogations to HBN size

requirements where required to fit the existing buildings. A detailed design with a list of all

proposed derogations will be developed at OBC stage.

Refurbishment: For light refurbishment the overriding principle remains compliance with

standards in place at time of occupation, unless legislation requires adoption of alternative

standard. Where a building is subject to major refurbishment it will be undertaken to current

standards wherever possible. When the building design/layout does not allow full compliance,

derogations will be sought and identified in the OBC.

During the development of the SOC a decision was made, following consultation with stakeholders

(including clinicians), to apply an overall 5% reduction to the total size of the hospital when marked

against the current HBN requirement. This was to be delivered primarily through a reduction in ward

and single bedroom size and followed visits to comparator sites. A detailed design with a list of all

proposed derogations will be developed at OBC stage.

Where options involve refurbishment or redevelopment within existing buildings the mix of single

rooms, four bedded wards, and six bedded wards has been varied to reflect the best solution

available within the building envelope.

A.5.3 Estate construction capital costs

This section sets out the forecast estates construction capital costs for all options.

Estimated typical cost per m2 for each refurbishment type

All estate construction costs are based on indicative cost/m2. This has been based on current

benchmarking received from two live hospital redevelopments, one in outer London, and the other in

the south east of England. Legal / boundary / finance costs have all been excluded from these

estimates and have been captured separately where necessary.

The table below sets out the overall cost/m2 for each refurbishment type.

Table 92: Estimated typical cost per m2 for each refurbishment type

Cost category New Build Heavy

Refurbishment

Medium

Refurbishment

Light

Refurbishment

NETT (final) works cost 3,300 2,500 2,000 1,000

Typical abnormals 330 0 0 0

Client risk 330 250 500 200

Total Construction Cost 3,960 2,750 2,500 1,200

Non-work costs 165 125 100 50

Equipment 660 500 200 100

Fees 594 450 360 180

Total Out-turn Costs 5,379 3,825 3,160 1,530

Optimism Bias 1,345 956 790 383

VAT 1,345 956 790 383


126

Cost category New Build Heavy

Refurbishment

Medium

Refurbishment

Light

Refurbishment

Total Cost 8,069 5,738 4,740 2,295

The following sections outline the assumptions underpinning these figures. All percentage allowances

are applied to the NETT (final) works costs in Table 93.

NETT (final works)

The NETT (final) works cost includes the construction cost, IT Active Equipment, BREEAM (Building

Research Establishment Environmental Assessment Method) Health, preliminaries, overhead and

profit only. Costs shown are in FY 16/17 prices.

Table 93: NETT (final) works cost per m2 for different refurbishment types

Refurbishment type Cost (£/m2) Rationale

New Build 3,300 Determined from comparative trust reconfiguration projects

Heavy Refurbishment 2,500 Determined from comparative trust reconfiguration projects

Medium Refurbishment 2,000 Determined from comparative trust reconfiguration projects

Light Refurbishment 1,000 Determined from comparative trust reconfiguration projects

Typical abnormals

The allowance for typical abnormals covers any demolition works, services diversions, services

infrastructure works, incoming services, road infrastructure works, but excludes any unusual

abnormals works such as an energy centre or a multi-storey car park which are captured separately.

Table 94: Typical abnormal percentage allowances for each refurbishment type

Refurbishment type Allowance Rationale

New Build 10%

To cover incoming services, services diversions and upgrade to

existing services and road infrastructure (excludes car park).

Heavy Refurbishment -

Excluded as no site abnormals would generally arise during an

internal refurb. Client risk added to account for any scope gaps.

Medium Refurbishment -



Light Refurbishment -



Unusual abnormals

Allowances have been made for the additional infrastructure required at the greenfield site only. Costs

shown are in FY 16/17 prices.


127

Table 95: Unusual abnormals which would occur on the Greenfield site

Assumption Allowance Rationale

Energy centre

£50,000,000

New energy plant required to power the hospital, already present

at WGH and SACH sites (spread over three years). Based on

similar requirements on comparator projects.

Road junction

alternation £30,000,000

Allowance for improvements to the surrounding road network

(spread over four years). Based on comparator projects in or

around the M25 road network.

Additional utilities

£15,000,000

Additional infrastructure required to connect utilities to the hospital

on the Greenfield site (spread over two years). Based on

professional opinion.

The car par for the greenfield site has also been included as an Unusual Abnormal. See section

A.5.6.

Client risk and contingency

Adjustment has also been made for client risk and contingency cover.

Table 96: Client risk and contingency percentage allowances for each refurbishment type


New Build 10% Professional opinion, comparator projects and WHHT estates

Heavy Refurbishment 10% Professional opinion, comparator projects and WHHT estates

Medium Refurbishment 25% Professional opinion, comparator projects and WHHT estates

Light Refurbishment 20% Professional opinion, comparator projects and WHHT estates

Non-work costs

An allowance has been included for non-works to cover planning, building control, IT infrastructure

and equipment, Section 278, Section 106, telecoms, surveys etc. but excludes any decanting or

temporary accommodation requirements.

Table 97: Non-work percentage allowances for each refurbishment type







128

Equipment

An allowance has been made for buying new equipment or transferring any existing to the new site,

depending on the nature of the works involved.

Table 98: Equipment percentage allowances for each refurbishment type


New Build 20% Assumes no transfer of existing equipment (WHHT estates)

Heavy Refurbishment 20% Assumes no transfer of existing equipment (WHHT estates)

Medium Refurbishment 10% Assumes at least 50% transfer of equipment (WHHT estates)

Light Refurbishment 10% Assumes at least 50% transfer of equipment (WWHT estates)

Fees

An allowance has been made for fees to cover all external professional fees, and capitalisation of the

direct Trust project team only, but excludes the capitalisation of the wider Trust estates and clinical

teams etc.

Table 99: Fees percentage allowances for each refurbishment type






Optimism Bias

An allowance of 25% has been made for optimism bias, on the basis that the project is at Strategic

Outline Case (SOC) stage. An optimism bias workshop should be held during OBC stage once further

details of the site and the project become available to agree the level of optimism bias adjustment for

each option.

Table 100: Optimism Bias percentage allowances for each refurbishment type


New Build 25% NHS guidance for SOC stage estates projects is a maximum

adjustment of 30%. 25% has been chosen, in line with HMT

guidance for standard building projects. Heavy Refurbishment 25%

Medium Refurbishment 25%

Light Refurbishment 25%


129

A.5.4 Transition costs

Transition costs have been assumed to be a fixed percentage of the total build cost (including

abnormal costs, on-costs, equipment, fees, and optimism bias, but excluding unusual abnormals,

capital maintenance and land receipts). This fixed percentage is 2.9% and has been benchmarked

against similar schemes. Transition costs are applied in the same profile as the main construction

cost.

A.5.5 Non-clinical administration

Some of the corporate staff who are not required to work on a hospital site are assumed to be located

in a separate location, in line with Carter recommendations to reduce the ratio of clinical to non-

clinical space. Table 101 sets out the amount of space required for non-clinical administration

accommodation on and off the hospital sites.

Table 101: Size of offices for non-clinical administration staff on and off the hospital sites

Location Area (m2) Comments

Hospital site 2,000 Maintain some capacity on site for medical education and admin

services which require colocation

Off-site 5,000 Assume the majority of Finance, HR, Communications and

Estates can be located in a nearby commercial property.

Total 7,000

The rent for the off-site office is assumed to be £200/m2 which has been benchmarked from

commercial properties in the Watford area from Rightmove.

A.5.6 Required car parking spaces

A sustainable car parking solution is being implemented at both the WGH and SACH sites as part of

WHHT’s interim estates strategy. The cost of building a car park is therefore only included for

greenfield options. It has been assumed that a new multi-storey car park will be required at a cost of

£15,000 per parking space. The number of spaces required assumes an increase from the current

total number of 1,800 due to increased activity levels by 35/36 and the shortage of parking on both of

the existing sites. This estimate excludes 200 space required for hubs at any hub location.

Table 102: Estimated number of required car park spaces and total cost per option

Option Number of spaces required on greenfield site Cost

Option 1 2,300 £34.5m

Option 3 2,000 £30m

Option 5 2,000 £30m

A.5.7 Land Values

For the majority of the options, new land will need to be bought or existing land sold. The figures

below show the amount of land available, the amount to be bought/sold. Land values were taken from

the Land Registry database.

Any receipts from selling land from the HHH site have been excluded as this is subject to a separate

business case.


130

Table 103: Total sellable area / to buy for each site

Site Total size of site

(ha)

Area unable to be

sold/bought (ha)

Locality hub

requirement (ha)

Total available to

be bought / sold

WGH 7.32 0.00 0.00 7.32

SACH 5.06 1.12 0.00 3.94

GF (to purchase) 6.80 0.00 0.00 6.80

Table 104: Total value to be sold / purchased

Site Total available to

be bought / sold Land value / ha

Discount for

brownfield Value

WGH 7.32 £3,425,000 25% £18.8m

SACH 3.94 £6,680,000 25% £19.7m

GF (to purchase) 6.80 £3,885,000 0% £26.4m

The table below shows the assumed timings for any land bought / sold for each option. It is assumed

that 80% of the greenfield land required for Option 1 will be required for Options 3 and 5 as the

planned care site will not be co-located.

Table 105: Timings for when the designated land is sold / purchased for each option

Option Site Sold / purchased Value Financial year

Option 1 GF Purchased £26,418,000 21/22

WGH Sold £18,803,250 27/28

SACH Sold £19,739,400 27/28


WGH Sold £12,598,178 30/31

SACH Sold £19,739,400 27/28


WGH Sold £18,803,250 23/24

SACH - - -

Option 6 GF - - -

WGH Purchased £18,803,250 19/20

WGH Sold £18,803,250 24/25

SACH Sold £19,739,400 24/25


131

Option Site Sold / purchased Value Financial year

Option 7&8 GF - - -

WGH - - -

SACH Sold £19,739,400 26/27

Option 10 GF - - -

WGH - - -

SACH - - -

Option 12 GF - - -

WGH - - -

SACH - - -

Option 13&14 GF - - -

WGH - - -

SACH - - -

A.5.8 Stand-alone locality hub savings

As part of the Your Care, Your Future programme, a number of locality hubs are planned across west

Hertfordshire. If there is an acute hospital site in the locality then the locality hub will be combined in

the building, but if there is not then a standalone locality hub will have to be built. Options in which

there is an acute hospital site in the localities where a locality hub is required (Watford and/or St

Albans) will therefore lead to wider benefits for the health economy of a reduced cost of construction

for the locality hub.

It is assumed that the cost to build each standalone hub will be around £45m, based on the estimated

cost of the Hemel Hempstead health facility. If, however, construction was done as part of a larger

hospital construction then those costs would be lower by around 20%, so a £9m saving. These

assumed savings have been considered in the Economic case, but not included as part of the

Financial Case.

Table 106: Cost savings as a result of not having to build standalone locality hubs

Option Standalone hubs required Total cost saving

Option 1 2 -

Option 3 1 £9m

Option 5 1 £9m

Option 6 1 £9m

Option 7&8 1 £9m

Option 10 - £18m


132

Option Standalone hubs required Total cost saving

Option 12 - £18m

Option 13&14 - £18m

A.5.9 Timings for each option

The table below shows the timeline start and finish of construction for each option, along with the first

year the site has 100% of the designated activity.

Table 107: Construction start and finish along with 100% of the designated activity for each option

Option Emergency and specialised care site Planned care site

Construction

Begins

Construction

Ends

Activity

Shift

Construction

Begins

Construction

Ends

Activity

Shift

Option 1 23/24 25/26 26/27 23/24 25/26 26/27

Option 3 23/24 25/26 26/27 27/28 29/30 30/31

Option 5 23/24 25/26 26/27 19/20 22/23 23/24

Option 6 20/21 23/24 24/25 20/21 23/24 24/25

Option 7&8 20/21 30/31 31/3222 20/21 30/31 31/3223

Option 10 20/21 23/24 24/25 19/20 22/23 23/24

Option 12 20/21 29/30 30/3124 19/20 22/23 23/24

Option 13&14 18/19 23/24 24/25 18/19 23/24 24/25

A.5.10 Estate running costs

Forecast estate running costs following any refurbishment have been calculated using benchmarks

taken from Turner and Townsend’s database for hospitals (36 records). The rate is based on

comparable projects and adjusted for a 30-year study period. The benchmarks represent midrange

estimates of what the whole life costs might be for the project and are subject to a range of accuracy

of ±50%. Once a greater understanding is developed of how the assets will be operated and

maintained, these benchmarks and the level of confidence can be refined.

It is assumed that the life cycle costs commence upon completion of the new build / refurbishment

works, and not in parallel.

The hard facilities management (FM) element of the estates running costs (c 40%) is assumed to

increase at a straight line 5% per year before inflation if nothing is done to improve the estate.

22 Emergency Care for Option 7&8 is phased – 40% of activity 25/26, 65% of activity 27/28, 85% of activity 30/31, 100% in

31/32.

23 Follows the same phasing as Emergency Care.

24 Emergency Care for Option 12 is phased – 40% of activity 25/26, 65% of activity 27/28, 85% of activity 29/30, 100% in 30/31.


133

Life cycle costs

The following assumptions have been made when estimating the ongoing lifecycle costs:

The life cycle cost (LCC) benchmark rates have been annualised to provide a fixed, representative

life cycle cost per annum.

All work associated with building, redevelopment, refurbishment and backlog maintenance are

assumed included as capital expenditure and are not reflected in the LCC benchmark rates.

The LCC benchmark rates for refurbishment works do not allow to improve the condition of the

assets following completion of the refurbishment works, but to maintain the assets at their

conditions and functions as they are following completion of the refurbishment works.

The life cycle replacement benchmarks assume that replacements will follow estimated service

lives to the components as detailed by Chartered Institution of Building Services Engineers

(CIBSE), Building Cost Information Service, part of the Royal Institution of Chartered Surveyors,

(BCIS), the Building Services Research and Information Association (BSRIA) and manufacturers

guidance. As the design progresses and, a better understanding of components is developed

specific variations to reference service lives will need to be taken into account into the life cycle

cost estimates.

Life cycle assumptions and replacements assume that day to day maintenance is carried out in

accordance with manufacturers and system recommendations and Services and Facilities Group

(SFG20) methodologies.

LCC benchmark rates for refurbishment works also assume best practice following completion of

the works and have been adjusted upwards to reflect the assets' conditions at the start of the study

period, based on the level of capital works completed. These rates are not reflective of the Trust's

current LCC expenditure profiles.

In general, the benchmarks will reflect the cost of providing services and would normally exclude

management fees, profits, company overheads, etc. The benchmarks will generally assume a mix

of in – house and outsourced services, but will reflect an efficient service delivery.

Table 108: Life cycle costs per new build and refurbishment option

Life cycle cost New Build

(£/m2/year)

Heavy

Refurbishment

(£/m2/year)

Medium

Refurbishment

(£/m2/year)

Light

Refurbishment

(£/m2/year)

Major Acute /

Specialised Services 25.69 25.69 26.21 28.87

Planned Surgery Hub 32.11 32.11 32.77 36.08

Energy costs

The following assumptions have been made when estimating the ongoing energy costs:

The new build energy benchmark rate is based on CIBSE Guide F (Good Practice) electricity and

gas consumption guidelines for new buildings. The benchmark rate includes a risk adjustment of

25%. The rate is also in line with benchmark rates for hospitals provided by the BCIS.

The rate for heavy refurbishment is based on the new build rate, but includes a 10% uplift to reflect

that the structural elements, which will be retained are not likely to have the same thermal qualities

than new material.

The medium refurbishment rate is based on existing energy costs for WGH and SACH and has

been reduced by 5% to reflect energy savings achievable due to improved plant efficiency.


134

The light refurbishment rate is based on existing energy costs for WGH and SACH and has been

reduced by 2.5% to reflect energy savings achievable due to improved plant efficiency.

The rates for acute/specialised services and the surgery facilities are assumed to be the same.

Table 109: Energy costs per new build and refurbishment option

Energy cost New Build

(£/m2/year)

Heavy

Refurbishment

(£/m2/year)

Medium

Refurbishment

(£/m2/year)

Light

Refurbishment

(£/m2/year)

Major Acute /



Water costs

The following assumptions have been made when estimating the ongoing water costs:

The new build water benchmark rate is based on the existing water and waste water costs for

HHH, increased by 25% to adjust for the underutilisation of the facilities.

The rate for heavy refurbishment is based on the new build rate, but includes a 10% uplift to reflect

that there are likely to be some inefficiencies retained in the refurbished system, compared to a

new system.

The medium refurbishment rate is based on existing water and waste water costs for SACH as this

rate is higher than the actual rate for HHH and lower than WGH and seen as a realistic target for

water and waste water costs.

The light refurbishment rate is based on the rate for medium refurbishment including an uplift of

25% to reflect that there are likely to be greater water efficiencies with the light touch works, but

that the systems will not be as efficient as refurbished systems.

The rates for acute/specialised services and the surgery facilities are assumed to be the same.

Table 110: Water costs per new build and refurbishment option

Water cost New Build

(£/m2/year)

Heavy

Refurbishment

(£/m2/year)

Medium

Refurbishment

(£/m2/year)

Light

Refurbishment

(£/m2/year)

Major Acute /



Hard facilities management and cleaning costs

The following assumptions have been made when estimating the ongoing hard FM costs:

Hard FM is the management of building management systems, such as boiler hearing, air

conditioning etc.; energy and water management and building and fabric maintenance, both

planned and reactive.

No data is available to differentiate between major acute and planned surgery hub uses.


135

It is assumed that a heavy refurbishment is back to shell and core and see little difference between

new build and heavy refurbishment for the purposes of this document, a medium refurbishment is

minor plant replacements and a Light Touch is cosmetic finishes.

The Estates Return Information Collection (ERIC) data returns for HHH show an average of

£35.71/m2/year for Estates services and £20.74/m2/year for cleaning services. These figures

appear to be too low. The ERIC data returns for WGH show £135.77/m2/year for estates services

and £52.25/m2/year for cleaning services. These figures appear to be too high.

The ERIC data returns show an average of £74.54/m2/year for estates services for Hospitals

located in the Home Counties and an average of £42.03/m2/year for cleaning services for

Hospitals located in the Home Counties. These figures have been used for the new build and

heavy refurbishment allowances.

Turner & Townsend data shows an average of £47.09/m2/year for estates services for hospitals

nationally and an average of £31.55/m2/year for cleaning services for hospitals nationally.

No allowances made for empty, mothballed or low use areas.

Table 111: Hard facilities management and cleaning costs per new build and refurbishment option

Hard facilities

management and

cleaning cost

New Build

(£/m2/year)

Heavy

Refurbishment

(£/m2/year)

Medium

Refurbishment

(£/m2/year)

Light

Refurbishment

(£/m2/year)

Hard FM 47.09 47.09 74.54 74.54

Soft FM 31.55 31.55 42.03 42.03

Scheme lifetime and Capital maintenance

Each scheme is assumed to have a life of 60 years beyond completion of the major works, except for

Option 13&14 which is assumed to have a life of 30 years due to PMOK needing to be refreshed.

Capital maintenance is the additional major work required after the main refurbishment for sites in

order to ensure they can last for 60 years.

Assumptions are that:

The Acute Assessment Unit (AAU) at WGH would need to have a light refurb every 10 years if it is

not built new.

Any light refurbishment of SACH would need to be repeated every 15 years.

The Do Minimum option would need ongoing capital maintenance equivalent to refreshing 25% of

light refurbishment every five years.

In order to be viable for a 60 year lifecycle, all options would need to have new build and heavy

refurb work refreshed after 30 years with light maintenance

Table 112: Options which have capital maintenance at each site, amount and frequency

Site Options Light Refurb Proportion

refreshed

Frequency

WGH (AAU) 7&8 and 12 6,500m2 (AAU) 50% Every five years

SACH 5, 10 and 12 8,500m2 (45%) 50% Every eight years

Both sites 13&14 74,000m2 (80%) 25% Every five years


136

Site Options Light Refurb Proportion

refreshed

Frequency

All sites All except 13&14

All new build and

heavy refurb

100% Once after 30

years


137

This Appendix describes the assessment of the long list of options against the non-financial evaluation criteria:

Access

Patient experience

Deliverability

Strategic alignment

B.1 Access

The long list of options was assessed against the Access criterion by the Access and Patient

Experience panel held on 19th August 2016.

The Access criterion was used to assess the extent to which each option would impact (positively or

negatively) on travel times. Travel time analysis was therefore conducted to inform the scoring. This

calculated average travel times for journeys between lower super output areas (LSOAs) in the Herts

Valleys area and their nearest hospital. An LSOA is a geographic area with a population size of

around 1,500 and there is an LSOA for every postcode in England and Wales. Because each LSOA is

of a similar population size, the average travel time across all LSOAs is weighted by population

density.

The data underpinning the travel time analysis presented at the original Access and Patient

Experience was later found to have anomalies. The analysis was therefore re-run with new data and

all Access and Patient Experience panel members were given the opportunity to revise their scores

based on this revised analysis. A summary of the outputs from the revised analysis is provided in

Table 113 for emergency and specialised care and Table 114 for planned care. The full report

detailing the analysis, as well as sensitivity cases tested, can be found on HVCCG’s website.

Table 113: Average travel time in minutes for emergency and specialised care

Transport method Greenfield site WGH site

Road travel 14.3 16.2

Public transport 46.7 50.3

It can be seen that average travel times for the greenfield site and the WGH site are similar, but are

slightly shorter for both road travel and public transport when the emergency and specialised care site

is located at the greenfield site than when it is located at the WGH site.

Table 114: Average travel time in minutes for planned care

Transport method Greenfield Watford St Albans

Road travel 14.0 15.8 16.6

Public transport 45.8 49.3 46.3

NON-FINANCIAL APPRAISAL


138

Again, travel times are similar for all sites. For road travel, average travel times are shortest when

planned care is located at the greenfield site, followed by the WGH site and then the SACH site. For

public transport, average travel times are shortest when planned care is located at the greenfield site,

followed by the SACH site and then the WGH site.

The long list of options do not all vary by location, Access and Patient Experience panel members

were therefore asked to assess the available locations for both emergency and specialised care and

planned care, and then the scores were applied to the relevant options in the long list. Options were

scored from 1 to 5 using the definitions outlined in Table 115.

Table 115: Access scoring criteria

Score Definition

1 Travel times for patients, visitors and staff are unacceptable.

2 Travel times for patients, visitors and staff are tolerable.

3 Travel times for patients, visitors and staff are acceptable.

4 Travel times for patients, visitors and staff are good.

5 Travel times for patients, visitors and staff are optimised.

The scores from the Access and Patient Experience panel are shown in Table 116 and the full report

from the panel, detailing the discussion points, can be found on HVCCG’s website.

Table 116: Raw access scores

Average score Greenfield Watford St Albans

Emergency and specialised care 3.5 3.5 N/A

Planned care 3.4 3.6 2.8

To determine an overall score for each of the long-listed options, combining raw scores for

emergency and specialised care with raw scores for planned care, they have been weighted

according to the level of activity at each site, and associated number of visits, as shown in Table 117.

Table 117: Weightings for Access scores

Visits /

episode

2015/6

Activity

Emergency

Care

Planned

Care

Assumptions

A&E 1 136,260 100% 0% All A&E on emergency site

Non-elective 4 54,396 100% 0% 3 visits per stay (1 per day)

Elective 2 7,582 20% 80% 1 visit per stay

Day case 1 37,337 0% 100% All on planned care site

Outpatient 1 454,558 35% 35% 30% re-provided

Total visits 515,972 208,564

Weighting 71% 29%


139

Applying these weightings to the scores in Table 118 results in the overall scores for the long-listed

options.

Table 118: Final Access scores

# Emergency and specialised care site Planned care site Access score















All options have very similar overall scores, with a range from 3.3 to 3.6. This is because average

travel times are very similar for all sites considered. Options 2 and 3, which both involve providing

emergency and specialised care from a greenfield site and planned care from the WGH site, got the

highest scores. These were closely followed by Options 1, 6, 7 and 8 which involve providing care

from either a combination of a greenfield site and the WGH site, or entirely from the WGH site.

Options in which planned care is provided from the SACH site scored lowest.

B.2 Patient experience

The long list of options were also assessed against the Patient experience criterion by the Access and

Patient Experience panel held on 19th August 2016.

The Patient experience criterion was used to assess the extent to which the option would be likely to

meet building regulations, provide flexibility for the future and ease of maintenance. The following

assumptions were provided to Access and Patient Experience panel members to inform their scoring.


140

Table 119: Patient experience information

Build option Features

New build

(100% new

build)

The estate will be optimised for purpose, and will exactly match clinicians’ needs (including

service adjacencies and spatial arrangements).

Quality of environment will be optimal with views and daylight maximised in the build – and

will improve the look and feel for patients and staff.

Clinical, environmental & sustainability standards met – and easier to maintain.

Provides 50% single rooms and four bed bays, all with en suite bathrooms

Providing the best range of facilities including a multi-storey care park in ideal location, and

lift numbers.

Redevelop

(Up to 50%

new build)

The estate will be partly optimised for purpose as current building layouts constrain options.

Quality of environment will be almost as good as new build, though layout, views and

daylight constrained by “fixed points” (e.g. lifts, staircases).

Clinical, environmental & sustainability standards met in part– maintenance and running

costs will be more intensive.

With new build capacity, could provide 50% single rooms and four bed bays.

Provides improved facilities, though constrained by fixed points (entrances, other

development work).

Refurbish

(up to 20%

new build)

The estate will be not be optimised for purpose, as service adjacencies and spatial

arrangements will largely remain unchanged.

Small increases in capacity may be possible for example through the use of additional

‘portakabin’ modular buildings

Quality of environment will improve with redecoration, with the aim of creating a better look

and feel for the estate. Improvements will be largely cosmetic, with limited opportunity to

improve the layout and location of clinical services and wards, or to improve the external

environment.

Clinical, environmental and sustainability standards unchanged – though facilities will

operate more reliably.

Maintains current six bed bays.

Very little improvement to facilities such as car parks and lifts.

Backlog

maintenance

(0% new

build)

The estate will be not be optimised for purpose, as service adjacencies and spatial

arrangements remain unchanged. No increase in capacity.

Quality of environment will improve with redecoration, though much will be “back room”

works not visible to the public.

Clinical, environmental and sustainability standards unchanged – though facilities will

operate more reliably.

Maintains current six bed bays.

No improvement to facilities such as car parks and lifts.

The long list of options do not all vary by build type, Access and Patient Experience panel members

were therefore asked to assess each type, and then the scores were applied to the relevant options in

the long list.

Options were scored from 1 to 5 using the following definitions outlined in

Table 120.


141

Table 120: Patient experience scoring criteria

Score Definition

1 The hospital estate is not able to meet most building regulations but will fall significantly short of

most NHS space and technical standards, provides no flexibility to meet changing requirements,

and is very difficult to maintain.

2 The hospital estate is able to meet some current building regulations but will fall short of most

NHS space and technical standards, provides very limited flexibility to meet changing

requirements, and is difficult to maintain.

3 The hospital estate is able to meet most current building regulations but will fall short of some

NHS space and technical standards, provides limited flexibility to meet changing requirements,

and is adequate to maintain.

4 The hospital estate is mostly able to meet building regulations and most NHS space and

technical standards, provides some flexibility to meet changing requirements, and is easy to

maintain.

5 The hospital estate is able to meet or exceed all building regulations and NHS space and

technical standards, provides excellent flexibility to meet changing requirements, and is very

easy to maintain.

The scores from the Access and Patient Experience panel are shown in Table 121 and the full report

from the panel, detailing the discussion points, can be found on HVCCG’s website.

Table 121: Raw Patient experience scores

Build option Score

New build (100% new build) 5.0

Redevelop (Up to 50% new build) 3.1

Refurbish (up to 20% new build) 2.0

Backlog maintenance (0% new build) 1.1

As would be expected, the closer the option is to complete new build, the higher the score achieved.

In order to combine the raw scores for emergency and specialised care with the raw scores for

planned care to determine an overall score for each of the long-listed options, they have been

weighted according to the estimated space required for each site, as set out in Table 122.

Table 122: Weightings for Patient experience scores

Site Area required Weighting

Emergency and specialised care site 70,000 m2 78%

Planned care site 20,000 m2 22%

Applying these weightings for emergency and specialised care and planned care to the scores in

Table 121 results in the overall scores for the long-listed options detailed in Table 123.


142

Table 123: Final Patient experience scores

# Emergency and specialised care site Planned care site Patient experience score















The overall scores vary significantly between options. Options involving 100% new build, Options 1, 2,

4, 6 and 9, were scored the most highly. Options involving just backlog maintenance or a simple

refurbishment, Options 14 and 13, were scored the least highly.

These scores demonstrate that the closer to new build quality achieved, the better the panel felt the

patient experience would be. The low scores for options 13 and 14 show that panel members believe

that they would not be able to offer the quality of facilities required to meet patient experience

expectations.

B.3 Deliverability

The Deliverability Panel was held on 26th August 2016 and considered four separate sub-criteria:

Site Suitability – The extent to which the option will enable the accommodation of all necessary

clinical and support services without site-linked constraints (e.g. space, geography, topography,

planning).

Implementation approach – The complexity of implementation, and the extent to which this is likely

to impact on business continuity.

Timescales – The extent to which the option can be implemented rapidly following approval of the

OBC, and whether benefits can be delivered in a phased way or will only be fully realised on

completion.

Delivery risk – The extent to which the option is likely to be successfully implemented.

An overview of the options for both the emergency and specialised care site and the planned care site

was provided to panel members to inform their scoring. This information can be found on HVCCG’s

website.


143

Panel members were asked to score each long-listed option against the sub-criteria using the

definitions outlined in Table 124.

Table 124: Deliverability scoring criteria

Score Site suitability Implementation Timescales Delivery risk

1 The sites in question are

unable to accommodate all

of the required clinical and

non-clinical services

(including car parks etc.) due

to space, geographical,

topographical or other

restrictions.

The implementation

of the option will be

very complex and is

highly likely to have

a significant impact

on service

continuity.

Implementation following

OBC approval (including

gaining planning

permission) will take six

to ten years to complete

with benefits only

realised on completion.

Implementation

has low

likelihood of

success.

2 The sites in question can

accommodate all of the

required clinical and non-

clinical services (including

car parks etc.), but the

choice of layout is

significantly limited by space,

geographical, topographical

or other restrictions.

The implementation


complex and is

likely to have a

significant impact

on service

continuity.



gaining planning

permission) will take six

to ten years to complete

with benefits phased over

this period

Implementation

has some

likelihood of

success.





car parks etc.), but the

choice of layout is somewhat

limited by space,



The implementation


fairly complex and

is likely to have

some impact on

service continuity.



gaining planning

permission) will take

three to six years to

complete with benefits

only realised on

completion.

Implementation

has reasonable

likelihood of

success.





car parks etc.), but there are

some space, geographical,

topographical or other

restrictions to take account

of when planning the layout

The implementation


straightforward and

is unlikely to have a

noticeable impact

on service

continuity.



gaining planning

permission) will take

three to six years to


phased over this period

Implementation

has good

likelihood of

success.


comfortably accommodate

all of the required clinical and

non-clinical services

(including car parks etc.),

with no relevant space,



The implementation


simple and is very

unlikely likely to

have any impact on

service continuity.



gaining planning

permission) will take one

to three years to


phased over this period.

Implementation

has excellent

likelihood of

success.


144

The average scores for each of the long-listed options against the four sub-criteria are provided in

Table 125.

Table 125: Deliverability scores

Option Site suitability Implementation Timescales Delivery risk Overall

1 4.6 4.5 2.9 3.0 3.8

2 3.1 3.5 2.9 2.8 3.1

3 2.7 2.7 2.6 2.6 2.7

4 2.9 3.1 3.2 2.9 3.0

5 2.9 2.8 3.1 3.0 3.0

6 4.1 4.1 3.8 3.3 3.8

7 3.9 2.7 2.6 2.7 2.8

8 3.0 2.8 2.9 3.1 3.0

9 3.0 3.1 3.1 3.0 3.1

10 2.4 2.5 2.9 2.8 2.7

11 2.8 3.0 3.1 3.2 3.0

12 2.8 2.4 2.8 3.0 2.8

13 2.2 1.7 2.2 3.0 2.3

14 1.1 1.3 1.6 1.9 1.5

Options 1 and 6, which both involve a complete new build on a single site, score relatively well across

all Deliverability sub-criteria. This is because these options were seen as the most straight-forward.

There was not a large degree of variance between options, however, with most options receiving

similar overall scores. Options involving a simple refurbishment or just backlog maintenance (Options

13 and 14) were the exception and scored lowest across all sub-criteria. This is because they would

take a very long time to complete and begin to deliver benefits, they would result in risks to business

continuity and there is likely to be stakeholder resistance against this options as they would be seen

as sub-optimal.

These scores demonstrate that all options have some positives and some negatives in terms of

deliverability. Options 13 and 14 have the biggest deliverability issues, however, making it more

difficult to secure successful implementation and realise the anticipated benefits.

B.4 Strategic alignment

The Strategic alignment criterion was scored by Helen Brown, WHHT Deputy Chief Executive and

Director of Strategy, and David Evans, HVCCG Programme Director for Your Care, Your Future, as

representatives of the main stakeholder organisations involved in the acute transformation, and best

able to judge overall strategic alignment.

The criterion was used to assess the extent to which the option:

Aligns with relevant local and national strategies (including the Hertfordshire and west Essex STP,

WHHT’s clinical and estates strategies and Watford Health Campus plans).


145

Addresses the case for change, is able to deliver the agreed acute transformation investment

objectives and provide flexibility for the future.

Has broad stakeholder support across the range of stakeholders and the likelihood that the option

will withstand challenge.

The long-listed options were assessed against these three points in order to inform the overall scores.

In performing this assessment, the following factors were taken into account:

Table 126: Strategic alignment contributory factors

Area Definition

Alignment with

relevant local and

national strategies

To align with Hertfordshire and west Essex STP, the option must provide fit for

purpose estate with sufficient capacity to provide required centralised acute hospital

services safely.

To align with WHHT’s Clinical Strategy, the option must support WHHT in providing

the very best care, strengthen core services and provide specialist care as

appropriate.

To align with Watford Health Campus plans, the option must provide a significant

amount of acute health care services on the WGH site.

Addresses case for

change and

provides flexibility

for the future

To address the case for change for acute transformation, the option must deliver all of

the investment objectives (described in Section 2.3), most notably a fit for purpose

estate in optimum locations. The options should also provide sufficient future flexibility

to adapt to changing requirements over time.

Stakeholder support

and likelihood of

withstanding

challenge

The options with the most stakeholder support involve either a greenfield site, or a

split site solution with planned care provided from St Albans City Hospital site. All

stakeholder groups would like a new build solution, or as close to this as possible

(more details below).

To provide flexibility for the future, the option should allow further expansion of the

estate, with most flexibility provided by a split site solution.

The following feedback was received from stakeholder groups to inform this assessment:

Dacorum Borough Council and stakeholders

– Strong preference for central greenfield site

– Oppose WGH site as location for emergency and specialised care

– Accept SACH site as location for planned care

St Albans Borough Council and stakeholders

– Preference for central greenfield site for emergency and specialised care

– Will accept WGH site for emergency and specialised care as long as appropriate investment in

estate (strong preference for new build)

– Strong preference for planned care at SACH site

Watford Borough Council and stakeholders

– Preference for emergency and specialised care at WGH site

– Accept planned care at SACH site

Hertfordshire County Council Scrutiny Committee

– Overall supportive of WGH site for emergency and specialised care and SACH for planned

care

– Strong preference for new build

The long-listed options were scored from 1 to 5 against the Strategic alignment criterion using the

definitions outlined in Table 127.


146

Table 127: Strategic alignment scoring criteria

Score Definition

1 The option does not align with relevant local and national strategies, does not address the case for

change and cannot deliver the agreed investment objectives, and has low likelihood of

withstanding challenge.

2 The option partially aligns with relevant local and national strategies, begins to address the case

for change and partially delivers some of the agreed investment objectives, and has some

likelihood of withstanding challenge.

3 The option mostly aligns with relevant local and national strategies, mostly addresses the case for

change and delivers most of the agreed investment objectives, and has reasonable likelihood of

withstanding challenge.

4 The option aligns with relevant local and national strategies, addresses the case for change and

delivers all of the agreed investment objectives, and has good likelihood of withstanding challenge.

5 The option fully aligns with relevant local and national strategies, fully addresses the case for

change and delivers the agreed investment objectives, and has good likelihood of withstanding

challenge.

The scores for each of the long-listed options against each area, as well as the overall average, are

provided in Table 128.

Table 128: Strategic alignment scores

Option Strategies Case for change Stakeholder support Average

1 5 5 4 4.7

2 5 5 3 4.3

3 5 5 3 4.3

4 5 5 4 4.7

5 5 5 4 4.7

6 5 3 2 3.3

7 5 4 1 3.3

8 5 2 1 2.7

9 5 5 4 4.7

10 5 5 4 4.7

11 5 5 3 4.3

12 5 5 3 4.3

13 4 3 1 2.7

14 2 1 1 1.3


147

The options achieving the best scores are those that involve significant new build elements, as these

are most likely to provide a fit for purpose estate with sufficient capacity to provide required

centralised acute hospital services safely. Those that involve a split site solution also score well, as

these offer most flexibility for the future with space for further expansion. Options 13 and 14 score

very poorly due to their inability to properly address the case for change and lack of stakeholder

support. Options 6, 7 and 8 also score relatively poorly, due to the lack of flexibility for the future and

lack of stakeholder support for a single hospital site solution in Watford. These options would be less

likely to withstand challenge for these reasons.

B.5 Summary

B.5.1 Overall non-financial scores

Table 129 shows the overall non-financial scores for the long list of options when each of the four

non-financial criteria are weighted equally.

Table 129: Non-financial scores25



Strategic

Alignment Overall

Rank for

overall score

1 3.5 5.0 3.8 4.7 4.2 1

2 3.6 5.0 3.1 4.3 4.0 4

3 3.6 4.6 2.7 4.3 3.8 8

4 3.3 5.0 3.0 4.7 4.0 2

5 3.3 4.6 3.0 4.7 3.9 6

6 3.5 5.0 3.8 3.3 3.9 5

7 3.5 4.6 2.8 3.3 3.5 10

8 3.5 3.6 3.0 2.7 3.2 12

9 3.3 5.0 3.1 4.7 4.0 3

10 3.3 4.6 2.7 4.7 3.8 7

11 3.3 3.6 3.0 4.3 3.5 9

12 3.3 3.1 2.8 4.3 3.4 11

13 3.3 2.0 2.3 2.7 2.6 13

14 3.3 1.1 1.5 1.3 1.8 14

This shows that ranking of the options is largely driven by the build type. The options with the highest

overall scores are those that involve a large proportion of new build, and those with the lowest overall

scores are those that involve the least amount of works. This is largely driven by the improved patient

experience possible with a new build solution, but also the greater deliverability.

25 The overall score is calculated as the average of all the non-rounded non-financial scores


148

B.5.2 Sensitivity testing

To test the sensitivity of the ranking to the weighting of each of the criteria, each criterion was in turn

given three times the weighting of other criteria. The outputs from this analysis are shown in Table

130.

Table 130: Sensitivity testing of non-financial scores

#

Rank when criterion is weighted three times higher than others

Access Patient Experience Deliverability Strategic Alignment

1 1 1 1 1

2 2 4 5 6

3 6 8 8 7

4 3 2 4 2

5 7 6 6 4

6 4 5 2 9

7 9 9 10 11

8 12 11 12 12

9 5 3 3 3

10 8 7 7 5

11 10 10 9 8

12 11 12 11 10

13 13 13 13 13

14 14 14 14 14

This analysis demonstrates that weighting the criteria would not have a significant impact on the

ranking of the options. Although there is some movement in the rankings when criteria are weighted,

Option 1 is always the top ranked option and Options 13 and 14 are always the bottom two ranked

options. The options making up the top five ranked options are also consistent, although the ordering

is changed slightly.


149

This Appendix contains economic appraisals for all short-listed options, outlining costs, benefits and resulting EAV.

C.1 Introduction

A cost-benefit appraisal of the short-listed options has been conducted in accordance with HM

Treasury Green Book guidance26 to assess the value for money offered by each option. This

quantifies in monetary terms as many of the costs and benefits as possible to generate a future profile

of costs and benefits for each option over the lifetime of the investment. These are then ‘discounted’

to convert them into ‘present values’ so that they can be compared. The discounted costs and

benefits are then netted off against each other and summed to produce the net present value (NPV).

As the different options will result in creating estate assets with different lifetimes, this is then divided

by the ‘present value of annuity factor’ to calculate the Equivalent Annual Value (EAV), which show

the net benefit per year of owning and operating the new asset in comparison to the baseline position.

The following sections provide the NPV and EAV calculations for each short-listed option. The NPVs

are structured as the net position between the baseline forecast (i.e. no estate change) and the option

being considered:

Service costs are forecast to reduce in each option in comparison to the baseline position and so

these cost savings are treated as benefits.

There are no capital estate costs in the baseline position, and so the costs presented for each

option are the total forecast costs for implementation.

The appraisal period for all options is assumed to start in 16/17. For Options 1, 3, 5, 6, 7/8, 10 and 12

the appraisal period runs until 60 years from the completion of the build, to align with the useful

lifetime of the asset created. For Option 13&14 the appraisal timeframe is 30 years from the

completion of the work because the Princess Michael of Kent (PMoK) building would need a major

refurbishment or rebuild at this point. Because different appraisal periods have been used, the NPVs

are normalised as an EAV.

Due to difficulties in accurately forecasting costs and savings into the future, all annual costs and

savings have been flat-lined after Year 30.

The calculation of the NPVs exclude NHS income, Non-operating costs and income, VAT, and impact

of catchment area change as these are not anticipated to vary between options from a national

perspective and therefore do not impact the calculation of the NPVs.


ECONOMIC APPRAISALS



150

C.2 Option 1 Equivalent Annual Value Breakdown

Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12 Y13 Y14 Y15 Y16 Y17 Y18 Y19 Y20 Y21 Y22 Y23 Y24 Y25 Y26 Y27 Y28 Y29 Y30

16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 30/31 31/32 32/33 33/34 34/35 35/36 36/37 37/38 38/39 39/40 40/41 41/42 42/43 43/44 44/45 45/46

Efficiency Increase 6.9 13.3 19.4 20.1 20.8 21.5 22.2 22.8 23.4 24.0 24.5 25.0 25.5 25.9 26.3 26.6 27.0 27.3 27.6 27.9

Hard FM Savings 9.3 9.5 9.7 9.9 10.1 10.3 10.5 10.6 10.8 11.0 11.2 11.4 11.6 11.7 11.9 12.1 12.3 12.5 12.7 12.8

Hub Savings

Build and On Cost -2.4 -4.4 -4.4 -4.4 -4.4 -30.8 -35.7 -147.5 -159.8 -177.7 -10.6 38.5

Optimism Bias -32.3 -43.0 -32.3

Transition Costs -4.6 -6.2 -4.6

Capital Maintenance

-2.4 -4.4 -4.4 -4.4 -4.4 -30.8 -35.7 -184.4 -209.0 -214.6 5.7 61.4 29.1 30.0 30.9 31.8 32.6 33.4 34.3 35.1 35.7 36.4 37.0 37.6 38.2 38.7 39.3 39.8 40.3 40.8

1.00 0.97 0.93 0.90 0.87 0.84 0.81 0.79 0.76 0.73 0.71 0.68 0.66 0.64 0.62 0.60 0.58 0.56 0.54 0.52 0.50 0.49 0.47 0.45 0.44 0.42 0.41 0.40 0.38 0.37

-2.4 -4.2 -4.1 -3.9 -3.8 -25.9 -29.0 -144.9 -158.7 -157.4 4.0 42.1 19.3 19.2 19.1 19.0 18.8 18.6 18.4 18.2 18.0 17.7 17.4 17.0 16.7 16.4 16.1 15.7 15.4 15.0

Y31 Y32 Y33 Y34 Y35 Y36 Y37 Y38 Y39 Y40 Y41 Y42 Y43 Y44 Y45 Y46 Y47 Y48 Y49 Y50 Y51 Y52 Y53 Y54 Y55 Y56 Y57 Y58 Y59 Y60 Y61 Y62 Y63 Y64 Y65 Y66 Y67 Y68 Y69 Y70 Y71 Y72 Y73 Y74 Y75

46/47 47/48 48/49 49/50 50/51 51/52 52/53 53/54 54/55 55/56 56/57 57/58 58/59 59/60 60/61 61/62 62/63 63/64 64/65 65/66 66/67 67/68 68/69 69/70 70/71 71/72 72/73 73/74 74/75 75/76 76/77 77/78 78/79 79/80 80/81 81/82 82/83 83/84 84/85

Efficiency Increase 27.9 27.9 27.9 27.9 27.9 27.9 27.9 27.9 27.9 27.9 27.9 27.9 27.9 27.9 27.9 27.9 27.9 27.9 27.9 27.9 27.9 27.9 27.9 27.9 27.9 27.9 27.9 27.9 27.9 27.9 27.9 27.9 27.9 27.9 27.9 27.9 27.9 27.9 27.9

Hard FM Savings 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8

Hub Savings

Build and On Cost

Optimism Bias

Transition Costs

Capital Maintenance -122.4

40.8 40.8 40.8 40.8 40.8 40.8 40.8 40.8 40.8 40.8 -81.6 40.8 40.8 40.8 40.8 40.8 40.8 40.8 40.8 40.8 40.8 40.8 40.8 40.8 40.8 40.8 40.8 40.8 40.8 40.8 40.8 40.8 40.8 40.8 40.8 40.8 40.8 40.8 40.8

0.36 0.34 0.33 0.32 0.31 0.30 0.29 0.28 0.27 0.26 0.25 0.24 0.24 0.23 0.22 0.21 0.21 0.20 0.19 0.19 0.18 0.17 0.17 0.16 0.16 0.15 0.15 0.14 0.14 0.13 0.13 0.12 0.12 0.11 0.11 0.11 0.10 0.10 0.10

14.5 14.0 13.6 13.1 12.7 12.2 11.8 11.4 11.0 10.7 -20.6 9.9 9.6 9.3 9.0 8.7 8.4 8.1 7.8 7.6 7.3 7.1 6.8 6.6 6.4 6.1 5.9 5.7 5.5 5.4 5.2 5.0 4.8 4.7 4.5 4.4 4.2 4.1 3.9

Option 1

Option 1

Benefits

Net Position

Discount Factor

Present Value

Costs

Benefits

Net Position

Discount Factor

Present Value

Costs


151



16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 30/31 31/32 32/33 33/34 34/35 35/36 36/37 37/38 38/39 39/40 40/41 41/42 42/43 43/44 44/45 45/46


Hard FM Savings 8.7 8.9 9.1 9.3 9.5 9.7 9.9 10.0 10.2 10.4 10.6 10.8 11.0 11.1 11.3 11.5 11.7 11.9 12.1 12.2

Hub Savings 9.0

Build and On Cost -2.4 -4.1 -4.1 -4.1 -4.1 -25.3 -32.9 -130.4 -139.5 -152.5 -11.3 1.0 -37.0 -15.0 12.6

Optimism Bias -27.0 -36.0 -27.0 -3.1 -11.7 -4.7

Transition Costs -3.9 -5.2 -3.9 -0.4 -1.7 -0.7

Capital Maintenance

-2.4 -4.1 -4.1 -4.1 -4.1 -25.3 -32.9 -161.3 -180.7 -183.4 4.2 19.7 -21.9 9.1 51.9 31.2 32.0 32.8 33.7 34.5 35.1 35.8 36.4 37.0 37.6 38.2 38.7 39.2 39.7 40.2

1.00 0.97 0.93 0.90 0.87 0.84 0.81 0.79 0.76 0.73 0.71 0.68 0.66 0.64 0.62 0.60 0.58 0.56 0.54 0.52 0.50 0.49 0.47 0.45 0.44 0.42 0.41 0.40 0.38 0.37

-2.4 -4.0 -3.9 -3.7 -3.6 -21.3 -26.8 -126.8 -137.3 -134.5 3.0 13.5 -14.5 5.8 32.1 18.6 18.5 18.3 18.1 17.9 17.7 17.4 17.1 16.8 16.5 16.1 15.8 15.5 15.1 14.8


46/47 47/48 48/49 49/50 50/51 51/52 52/53 53/54 54/55 55/56 56/57 57/58 58/59 59/60 60/61 61/62 62/63 63/64 64/65 65/66 66/67 67/68 68/69 69/70 70/71 71/72 72/73 73/74 74/75 75/76 76/77 77/78 78/79 79/80 80/81 81/82 82/83 83/84 84/85


Hard FM Savings 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2

Hub Savings

Build and On Cost

Optimism Bias

Transition Costs


40.2 40.2 40.2 40.2 40.2 40.2 40.2 40.2 40.2 40.2 -89.9 40.2 40.2 40.2 40.2 40.2 40.2 40.2 40.2 40.2 40.2 40.2 40.2 40.2 40.2 40.2 40.2 40.2 40.2 40.2 40.2 40.2 40.2 40.2 40.2 40.2 40.2 40.2 40.2

0.36 0.34 0.33 0.32 0.31 0.30 0.29 0.28 0.27 0.26 0.25 0.24 0.24 0.23 0.22 0.21 0.21 0.20 0.19 0.19 0.18 0.17 0.17 0.16 0.16 0.15 0.15 0.14 0.14 0.13 0.13 0.12 0.12 0.11 0.11 0.11 0.10 0.10 0.10

14.3 13.8 13.4 12.9 12.5 12.0 11.6 11.2 10.9 10.5 -22.7 9.8 9.5 9.1 8.8 8.5 8.3 8.0 7.7 7.4 7.2 6.9 6.7 6.5 6.3 6.1 5.9 5.7 5.5 5.3 5.1 4.9 4.8 4.6 4.4 4.3 4.1 4.0 3.9

Option 3

Option 3

Benefits

Net Position

Discount Factor

Present Value

Costs

Benefits

Net Position

Discount Factor

Present Value

Costs


152



16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 30/31 31/32 32/33 33/34 34/35 35/36 36/37 37/38 38/39 39/40 40/41 41/42 42/43 43/44 44/45 45/46


Hard FM Savings -0.6 -0.5 -0.5 8.2 8.3 8.5 8.7 8.9 9.1 9.3 9.5 9.6 9.8 10.0 10.2 10.4 10.6 10.7 10.9 11.1 11.3 11.5 11.7

Hub Savings 9.0

Build and On Cost -2.3 -4.8 -4.8 -7.3 -18.7 -40.3 -50.5 -111.1 -139.0 -152.0 -8.8

Optimism Bias -2.2 -8.2 -3.3 -27.0 -36.0 -27.0

Transition Costs 0.0 -0.6 -0.6 -0.7 -3.9 -5.2 -3.9 0.1

Capital Maintenance -6.2 -6.2 -6.2

-2.3 -4.8 -4.8 -7.3 -21.5 -49.1 -54.5 -133.6 -180.8 -183.4 6.2 21.7 27.9 28.8 23.5 30.6 31.4 32.3 33.1 33.9 34.5 29.0 35.8 36.4 37.0 37.6 38.1 38.6 39.1 33.5

1.00 0.97 0.93 0.90 0.87 0.84 0.81 0.79 0.76 0.73 0.71 0.68 0.66 0.64 0.62 0.60 0.58 0.56 0.54 0.52 0.50 0.49 0.47 0.45 0.44 0.42 0.41 0.40 0.38 0.37

-2.3 -4.6 -4.5 -6.6 -18.7 -41.4 -44.3 -105.0 -137.3 -134.6 4.4 14.8 18.5 18.4 14.5 18.3 18.1 18.0 17.8 17.6 17.4 14.1 16.8 16.5 16.2 15.9 15.6 15.3 14.9 12.3


46/47 47/48 48/49 49/50 50/51 51/52 52/53 53/54 54/55 55/56 56/57 57/58 58/59 59/60 60/61 61/62 62/63 63/64 64/65 65/66 66/67 67/68 68/69 69/70 70/71 71/72 72/73 73/74 74/75 75/76 76/77 77/78 78/79 79/80 80/81 81/82 82/83 83/84 84/85


Hard FM Savings 11.7 11.7 11.7 11.7 11.7 11.7 11.7 11.7 11.7 11.7 11.7 11.7 11.7 11.7 11.7 11.7 11.7 11.7 11.7 11.7 11.7 11.7 11.7 11.7 11.7 11.7 11.7 11.7 11.7 11.7 11.7 11.7 11.7 11.7 11.7 11.7 11.7 11.7 11.7

Hub Savings

Build and On Cost

Optimism Bias

Transition Costs

Capital Maintenance -6.2 -110.2 -6.2 -6.2 -6.2 -6.2

39.6 39.6 39.6 39.6 39.6 39.6 33.4 39.6 39.6 39.6 -70.6 39.6 39.6 39.6 33.4 39.6 39.6 39.6 39.6 39.6 39.6 33.4 39.6 39.6 39.6 39.6 39.6 39.6 39.6 33.4 39.6 39.6 39.6 39.6 39.6 39.6 33.4 39.6 39.6

0.36 0.34 0.33 0.32 0.31 0.30 0.29 0.28 0.27 0.26 0.25 0.24 0.24 0.23 0.22 0.21 0.21 0.20 0.19 0.19 0.18 0.17 0.17 0.16 0.16 0.15 0.15 0.14 0.14 0.13 0.13 0.12 0.12 0.11 0.11 0.11 0.10 0.10 0.10

14.1 13.6 13.2 12.7 12.3 11.9 9.7 11.1 10.7 10.3 -17.8 9.7 9.3 9.0 7.3 8.4 8.1 7.9 7.6 7.3 7.1 5.8 6.6 6.4 6.2 6.0 5.8 5.6 5.4 4.4 5.0 4.9 4.7 4.5 4.4 4.2 3.4 3.9 3.8

Option 5

Option 5

Benefits

Net Position

Discount Factor

Present Value

Costs

Benefits

Net Position

Discount Factor

Present Value

Costs


153



16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 30/31 31/32 32/33 33/34 34/35 35/36 36/37 37/38 38/39 39/40 40/41 41/42 42/43 43/44 44/45 45/46

Efficiency Increase 7.1 13.8 20.1 20.8 21.5 22.2 22.8 23.5 24.1 24.7 25.3 25.9 26.3 26.8 27.2 27.6 27.9 28.3 28.6 28.9 29.2 29.4

Hard FM Savings 9.0 9.2 9.3 9.5 9.7 9.9 10.1 10.3 10.5 10.6 10.8 11.0 11.2 11.4 11.6 11.7 11.9 12.1 12.3 12.5 12.7 12.8

Hub Savings 9.0

Build and On Cost -2.4 -8.7 -8.7 -27.5 -107.1 -126.2 -110.4 -58.2 38.5

Optimism Bias -26.9 -43.0 -21.5 -16.1

Transition Costs -3.9 -6.2 -3.1 -2.3

Capital Maintenance

-2.4 -8.7 -8.7 -27.5 -137.8 -175.4 -135.0 -76.7 63.6 23.0 29.4 30.3 31.2 32.1 32.9 33.7 34.6 35.3 36.1 36.9 37.5 38.1 38.7 39.3 39.8 40.4 40.9 41.3 41.8 42.2

1.00 0.97 0.93 0.90 0.87 0.84 0.81 0.79 0.76 0.73 0.71 0.68 0.66 0.64 0.62 0.60 0.58 0.56 0.54 0.52 0.50 0.49 0.47 0.45 0.44 0.42 0.41 0.40 0.38 0.37

-2.4 -8.4 -8.1 -24.8 -120.1 -147.7 -109.8 -60.3 48.3 16.9 20.8 20.8 20.7 20.5 20.3 20.1 19.9 19.7 19.4 19.2 18.9 18.5 18.2 17.8 17.4 17.1 16.7 16.3 16.0 15.6


46/47 47/48 48/49 49/50 50/51 51/52 52/53 53/54 54/55 55/56 56/57 57/58 58/59 59/60 60/61 61/62 62/63 63/64 64/65 65/66 66/67 67/68 68/69 69/70 70/71 71/72 72/73 73/74 74/75 75/76 76/77 77/78 78/79 79/80 80/81 81/82 82/83 83/84 84/85


Hard FM Savings 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8

Hub Savings

Build and On Cost

Optimism Bias

Transition Costs


42.2 42.2 42.2 42.2 42.2 42.2 42.2 42.2 -80.2 42.2 42.2 42.2 42.2 42.2 42.2 42.2 42.2 42.2 42.2 42.2 42.2 42.2 42.2 42.2 42.2 42.2 42.2 42.2 42.2 42.2 42.2 42.2 42.2 42.2 42.2 42.2 42.2 42.2 42.2

0.36 0.34 0.33 0.32 0.31 0.30 0.29 0.28 0.27 0.26 0.25 0.24 0.24 0.23 0.22 0.21 0.21 0.20 0.19 0.19 0.18 0.17 0.17 0.16 0.16 0.15 0.15 0.14 0.14 0.13 0.13 0.12 0.12 0.11 0.11 0.11 0.10 0.10 0.10

15.1 14.5 14.1 13.6 13.1 12.7 12.2 11.8 -21.7 11.0 10.7 10.3 10.0 9.6 9.3 9.0 8.7 8.4 8.1 7.8 7.6 7.3 7.1 6.8 6.6 6.4 6.2 5.9 5.7 5.6 5.4 5.2 5.0 4.8 4.7 4.5 4.4 4.2 4.1

Option 6

Option 6

Benefits

Net Position

Discount Factor

Present Value

Costs

Benefits

Net Position

Discount Factor

Present Value

Costs


154

C.6 Option 7&8 Equivalent Annual Value Breakdown


16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 30/31 31/32 32/33 33/34 34/35 35/36 36/37 37/38 38/39 39/40 40/41 41/42 42/43 43/44 44/45 45/46


Hard FM Savings 0.5 0.5 1.1 1.1 1.6 9.6 9.8 10.0 10.2 10.4 10.5 10.7 10.9 11.1 11.3 11.5 11.7 11.8 12.0 12.2

Hub Savings 9.0

Build and On Cost -2.0 -7.4 -7.4 -7.4 -41.2 -29.9 -27.5 -44.3 -34.0 -44.5 0.9 -18.8 -27.2 -21.0 -27.3

Optimism Bias -9.0 -9.0 -9.0 -9.0 -11.2 -11.2 -6.0 -6.0 -6.0 -6.7 -6.7

Transition Costs -1.3 -1.3 -1.3 -1.3 -1.6 -1.6 -0.9 -0.9 -0.9 -1.0 -1.0


-2.0 -7.4 -7.4 -7.4 -51.5 -40.2 -37.8 -54.6 -46.8 -57.3 0.3 -19.5 -22.0 -16.8 -17.6 34.2 26.2 27.1 28.0 24.7 29.7 30.5 31.2 31.9 28.4 33.3 33.9 34.5 35.1 31.4

1.00 0.97 0.93 0.90 0.87 0.84 0.81 0.79 0.76 0.73 0.71 0.68 0.66 0.64 0.62 0.60 0.58 0.56 0.54 0.52 0.50 0.49 0.47 0.45 0.44 0.42 0.41 0.40 0.38 0.37

-2.0 -7.1 -6.9 -6.6 -44.9 -33.8 -30.7 -42.9 -35.6 -42.1 0.2 -13.3 -14.6 -10.7 -10.9 20.4 15.1 15.1 15.1 12.8 14.9 14.8 14.6 14.5 12.4 14.1 13.9 13.6 13.4 11.6


46/47 47/48 48/49 49/50 50/51 51/52 52/53 53/54 54/55 55/56 56/57 57/58 58/59 59/60 60/61 61/62 62/63 63/64 64/65 65/66 66/67 67/68 68/69 69/70 70/71 71/72 72/73 73/74 74/75 75/76 76/77 77/78 78/79 79/80 80/81 81/82 82/83 83/84 84/85


Hard FM Savings 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2

Hub Savings

Build and On Cost

Optimism Bias

Transition Costs

Capital Maintenance -4.2 -4.2 -4.2 -96.7 -4.2 -4.2 -4.2 -4.2

35.7 35.7 35.7 35.7 31.4 35.7 35.7 35.7 35.7 31.4 35.7 35.7 35.7 35.7 31.4 -61.0 35.7 35.7 35.7 31.4 35.7 35.7 35.7 35.7 31.4 35.7 35.7 35.7 35.7 31.4 35.7 35.7 35.7 35.7 31.4 35.7 35.7 35.7 35.7

0.36 0.34 0.33 0.32 0.31 0.30 0.29 0.28 0.27 0.26 0.25 0.24 0.24 0.23 0.22 0.21 0.21 0.20 0.19 0.19 0.18 0.17 0.17 0.16 0.16 0.15 0.15 0.14 0.14 0.13 0.13 0.12 0.12 0.11 0.11 0.11 0.10 0.10 0.10

12.7 12.3 11.9 11.5 9.8 10.7 10.3 10.0 9.6 8.2 9.0 8.7 8.4 8.1 6.9 -13.0 7.3 7.1 6.8 5.8 6.4 6.2 6.0 5.8 4.9 5.4 5.2 5.0 4.8 4.1 4.5 4.4 4.2 4.1 3.5 3.8 3.7 3.6 3.4

Option 7&8

Option 7&8

Benefits

Net Position

Discount Factor

Present Value

Costs

Benefits

Net Position

Discount Factor

Present Value

Costs


155



16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 30/31 31/32 32/33 33/34 34/35 35/36 36/37 37/38 38/39 39/40 40/41 41/42 42/43 43/44 44/45 45/46


Hard FM Savings -0.6 8.2 8.4 8.6 8.8 9.0 9.1 9.3 9.5 9.7 9.9 10.1 10.3 10.4 10.6 10.8 11.0 11.2 11.4 11.5 11.7 11.9 12.1

Hub Savings 9.0 9.0

Build and On Cost -2.3 -8.4 -8.4 -10.9 -104.7 -121.2 -95.0 -64.2

Optimism Bias -24.7 -44.3 -21.3 -13.5

Transition Costs 0.0 -3.8 -5.8 -3.3 -1.9 0.1


-2.3 -8.4 -8.4 -11.0 -133.3 -171.3 -119.6 -71.2 24.3 22.2 28.7 29.6 30.5 31.3 26.0 33.0 33.8 34.6 35.4 36.1 36.8 31.2 38.0 38.5 39.1 39.6 40.1 40.6 41.1 35.4

1.00 0.97 0.93 0.90 0.87 0.84 0.81 0.79 0.76 0.73 0.71 0.68 0.66 0.64 0.62 0.60 0.58 0.56 0.54 0.52 0.50 0.49 0.47 0.45 0.44 0.42 0.41 0.40 0.38 0.37

-2.3 -8.1 -7.9 -9.9 -116.2 -144.2 -97.3 -56.0 18.5 16.3 20.3 20.3 20.2 20.0 16.0 19.7 19.5 19.3 19.0 18.8 18.5 15.1 17.8 17.5 17.1 16.8 16.4 16.0 15.7 13.0


46/47 47/48 48/49 49/50 50/51 51/52 52/53 53/54 54/55 55/56 56/57 57/58 58/59 59/60 60/61 61/62 62/63 63/64 64/65 65/66 66/67 67/68 68/69 69/70 70/71 71/72 72/73 73/74 74/75 75/76 76/77 77/78 78/79 79/80 80/81 81/82 82/83 83/84 84/85


Hard FM Savings 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1 12.1

Hub Savings

Build and On Cost

Optimism Bias

Transition Costs

Capital Maintenance -6.2 -110.2 -6.2 -6.2 -6.2 -6.2

41.5 41.5 41.5 41.5 41.5 41.5 35.3 41.5 -68.7 41.5 41.5 41.5 41.5 41.5 35.3 41.5 41.5 41.5 41.5 41.5 41.5 35.3 41.5 41.5 41.5 41.5 41.5 41.5 41.5 35.3 41.5 41.5 41.5 41.5 41.5 41.5 35.3 41.5 41.5

0.36 0.34 0.33 0.32 0.31 0.30 0.29 0.28 0.27 0.26 0.25 0.24 0.24 0.23 0.22 0.21 0.21 0.20 0.19 0.19 0.18 0.17 0.17 0.16 0.16 0.15 0.15 0.14 0.14 0.13 0.13 0.12 0.12 0.11 0.11 0.11 0.10 0.10 0.10

14.8 14.3 13.8 13.3 12.9 12.4 10.2 11.6 -18.6 10.8 10.5 10.1 9.8 9.5 7.8 8.8 8.5 8.2 8.0 7.7 7.4 6.1 6.9 6.7 6.5 6.3 6.0 5.8 5.6 4.6 5.3 5.1 4.9 4.8 4.6 4.4 3.6 4.1 4.0

Option 10

Option 10

Benefits

Net Position

Discount Factor

Present Value

Costs

Benefits

Net Position

Discount Factor

Present Value

Costs


156



16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 30/31 31/32 32/33 33/34 34/35 35/36 36/37 37/38 38/39 39/40 40/41 41/42 42/43 43/44 44/45 45/46

Efficiency Increase 5.8 5.8 11.2 11.0 16.1 15.8 16.6 17.4 18.1 18.8 19.5 20.1 20.6 21.2 21.7 22.2 22.6 23.1 23.5 23.9 24.2

Hard FM Savings -0.6 -0.9 -0.4 -0.6 -0.2 -0.3 0.2 9.0 9.2 9.4 9.6 9.7 9.9 10.1 10.3 10.5 10.7 10.8 11.0 11.2 11.4 11.6 11.8

Hub Savings 9.0 9.0

Build and On Cost -2.1 -6.4 -6.4 -8.9 -52.0 -39.9 -42.4 -39.5 -30.0 -39.5 -24.4 -31.9 -18.7 -24.4

Optimism Bias -10.0 -16.0 -11.1 -7.8 -9.7 -9.7 -7.8 -7.8 -5.8 -5.8

Transition Costs 0.0 -1.7 -1.7 -1.9 -1.1 -1.4 -1.4 -1.1 -1.1 -0.8 -0.8 0.1

Capital Maintenance -6.2 -4.1 -6.2 -4.1 -10.3

-2.1 -6.4 -6.4 -8.9 -63.7 -57.6 -55.4 -40.0 -42.1 -45.2 -28.2 -29.8 -14.7 -14.8 27.6 25.8 26.7 27.6 28.5 25.3 30.2 24.7 31.6 32.3 28.9 33.6 34.3 34.9 35.4 25.8

1.00 0.97 0.93 0.90 0.87 0.84 0.81 0.79 0.76 0.73 0.71 0.68 0.66 0.64 0.62 0.60 0.58 0.56 0.54 0.52 0.50 0.49 0.47 0.45 0.44 0.42 0.41 0.40 0.38 0.37

-2.1 -6.2 -6.0 -8.1 -55.6 -48.5 -45.0 -31.4 -31.9 -33.2 -20.0 -20.4 -9.7 -9.5 17.1 15.4 15.4 15.4 15.4 13.2 15.2 12.0 14.8 14.7 12.7 14.2 14.0 13.8 13.5 9.5


46/47 47/48 48/49 49/50 50/51 51/52 52/53 53/54 54/55 55/56 56/57 57/58 58/59 59/60 60/61 61/62 62/63 63/64 64/65 65/66 66/67 67/68 68/69 69/70 70/71 71/72 72/73 73/74 74/75 75/76 76/77 77/78 78/79 79/80 80/81 81/82 82/83 83/84 84/85


Hard FM Savings 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8

Hub Savings

Build and On Cost

Optimism Bias

Transition Costs

Capital Maintenance -4.1 -6.2 -4.1 -111.3 -4.1 -6.2 -4.1 -10.3 -4.1 -6.2

36.0 36.0 36.0 36.0 31.9 36.0 29.8 36.0 36.0 31.9 36.0 36.0 36.0 36.0 -75.3 36.0 36.0 36.0 36.0 31.9 36.0 29.8 36.0 36.0 31.9 36.0 36.0 36.0 36.0 25.7 36.0 36.0 36.0 36.0 31.9 36.0 29.8 36.0 36.0

0.36 0.34 0.33 0.32 0.31 0.30 0.29 0.28 0.27 0.26 0.25 0.24 0.24 0.23 0.22 0.21 0.21 0.20 0.19 0.19 0.18 0.17 0.17 0.16 0.16 0.15 0.15 0.14 0.14 0.13 0.13 0.12 0.12 0.11 0.11 0.11 0.10 0.10 0.10

12.8 12.4 12.0 11.6 9.9 10.8 8.6 10.1 9.7 8.3 9.1 8.8 8.5 8.2 -16.6 7.7 7.4 7.1 6.9 5.9 6.4 5.2 6.0 5.8 5.0 5.4 5.2 5.1 4.9 3.4 4.6 4.4 4.3 4.1 3.5 3.8 3.1 3.6 3.5

Option 12

Option 12

Benefits

Net Position

Discount Factor

Present Value

Costs

Benefits

Net Position

Discount Factor

Present Value

Costs


157

C.9 Option 13&14 Equivalent Annual Value Breakdown


16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 30/31 31/32 32/33 33/34 34/35 35/36 36/37 37/38 38/39 39/40 40/41 41/42 42/43 43/44 44/45 45/46


Hard FM Savings 5.9 6.1 6.3 6.5 6.7 6.8 7.0 7.2 7.4 7.6 7.8 7.9 8.1 8.3 8.5 8.7 8.9 9.0 9.2 9.4 9.6 9.8

Hub Savings 18.0

Build and On Cost -3.1 -7.3 -19.4 -19.4 -17.3 -15.1 -63.3 -44.6

Optimism Bias -9.1 -9.1 -6.8 -6.8 -6.8 -6.8

Transition Costs -0.8 -0.8 -0.6 -0.6 -2.0 -2.0

Capital Maintenance -24.6 -24.6 -24.6 -24.6 -24.6

-3.1 -7.3 -29.3 -29.3 -24.7 -22.5 -72.0 -77.9 25.1 8.4 9.7 11.0 -12.4 13.3 14.5 15.6 16.7 -6.8 18.8 19.8 20.7 21.6 -2.1 23.3 24.1 24.9 25.7 1.8 27.1 27.8

1.00 0.97 0.93 0.90 0.87 0.84 0.81 0.79 0.76 0.73 0.71 0.68 0.66 0.64 0.62 0.60 0.58 0.56 0.54 0.52 0.50 0.49 0.47 0.45 0.44 0.42 0.41 0.40 0.38 0.37

-3.1 -7.0 -27.4 -26.4 -21.5 -18.9 -58.6 -61.2 19.1 6.2 6.9 7.5 -8.2 8.5 9.0 9.3 9.6 -3.8 10.1 10.3 10.4 10.5 -1.0 10.6 10.6 10.5 10.5 0.7 10.4 10.3


46/47 47/48 48/49 49/50 50/51 51/52 52/53 53/54 54/55 55/56 56/57 57/58 58/59 59/60 60/61 61/62 62/63 63/64 64/65 65/66 66/67 67/68 68/69 69/70 70/71 71/72 72/73 73/74 74/75 75/76 76/77 77/78 78/79 79/80 80/81 81/82 82/83 83/84 84/85


Hard FM Savings 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8

Hub Savings

Build and On Cost

Optimism Bias

Transition Costs

Capital Maintenance -24.6 -24.6 -22.2 -24.6 -24.6 -24.6 -24.6 -24.6 -24.6

27.8 27.8 3.2 27.8 27.8 27.8 27.8 3.2 5.6 27.8 27.8 27.8 3.2 27.8 27.8 27.8 27.8 3.2 27.8 27.8 27.8 27.8 3.2 27.8 27.8 27.8 27.8 3.2 27.8 27.8 27.8 27.8 3.2 27.8 27.8 27.8 27.8 3.2 27.8

0.36 0.34 0.33 0.32 0.31 0.30 0.29 0.28 0.27 0.26 0.25 0.24 0.24 0.23 0.22 0.21 0.21 0.20 0.19 0.19 0.18 0.17 0.17 0.16 0.16 0.15 0.15 0.14 0.14 0.13 0.13 0.12 0.12 0.11 0.11 0.11 0.10 0.10 0.10

9.9 9.6 1.1 8.9 8.6 8.3 8.1 0.9 1.5 7.3 7.0 6.8 0.8 6.3 6.1 5.9 5.7 0.6 5.3 5.2 5.0 4.8 0.5 4.5 4.3 4.2 4.1 0.5 3.8 3.7 3.5 3.4 0.4 3.2 3.1 3.0 2.9 0.3 2.7

Option 13&14

Option 13&14

Benefits

Net Position

Discount Factor

Present Value

Costs

Benefits

Net Position

Discount Factor

Present Value

Costs


158

This Appendix contains financial appraisals for the short-listed options, outlining capital and revenue investment required.

D.1 Introduction

The following sections outline the build-up of the capital costs for all options and then present the long

term affordability position for West Hertfordshire Hospitals Trust (WHHT) under each option.

Affordability is calculated by forecasting the income and expenditure position of WHHT over the next

30 years for each option:

Operating income and costs are forecast using forecast changes to activity, including demographic

growth, non-demographic growth and Your Care, Your Future interventions, as well as cost

inflation, efficiencies, and tariff inflation. Non-operating costs and income are included.

Capital charges are modelled assuming that all capital funding is provided via Public Dividend

Capital (PDC), which attracts a charge of 3.5% of the assets net book value. The capital profile for

Years 1-5 is assumed to follow the plan in the Hertfordshire and west Essex Sustainability and

Transformation Plan (STP).

Depreciation is calculated based upon the capital profile of estates and equipment investment.

FINANCIAL APPRAISALS


159

D.2 Capital costs

Table 131 shows the build-up of capital costs for each short-listed option.

Table 131: Build-up of capital costs

Opt 1 Opt 3 Opt 5 Opt 6 Opt 7&8 Opt 10 Opt 12 Opt 13&14

1 NETT Works Costs 264 271 256 264 223 256 229 115

2 Typical Abnormals 26 24 24 26 16 24 14 5

3 Client / Project Risk 26 27 28 26 26 28 27 18

4 = (1+2+3) Total Construction Cost 317 322 307 317 265 307 271 138

5 Non-work costs 13 14 13 13 11 13 11 6

6 Equipment 53 54 49 53 42 49 43 24

7 Fees 48 49 46 48 40 46 41 21

8 = (4+5+6+7) Total Out-turn Costs 430 438 415 430 359 415 366 189

9 Optimism Bias 108 110 104 108 90 104 92 45

10 Unusual Abnormals 125 122 122 0 0 0 0 0

11 Transition Costs 15 16 15 15 13 15 13 7

12 = (8+9+10+11) Total (exc VAT) 678 686 656 553 461 534 471 242

13 VAT 136 137 131 111 92 107 94 48

14 Land Sales/Gain -12 -11 2 -20 -20 0 0 0

15 = (12+13+14) Total 802 812 790 644 534 641 566 290

23/24 23/24 23/24 20/21 20/21 20/21 20/21 18/19

7 7 7 4 4 4 4 2

1,020 1,033 1,005 739 613 735 649 311

Construction Start

Number of Years Build cost inflation at 3.5%

Total inflated to start


160

D.3 Option 1 Affordability

Y0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12 Y13 Y14 Y15 Y16 Y17 Y18 Y19 Y20 Y21 Y22 Y23 Y24 Y25 Y26 Y27 Y28 Y29 Y30

Sub-Category 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 30/31 31/32 32/33 33/34 34/35 35/36 36/37 37/38 38/39 39/40 40/41 41/42 42/43 43/44 44/45 45/46

NHS Revenue 266.6 289.9 292.5 295.2 290.2 281.5 283.6 289.1 294.7 300.5 306.4 300.5 303.2 306.1 309.1 312.3 315.6 319.1 322.8 326.6 330.6 331.6 332.6 333.6 334.6 335.6 336.6 337.6 338.6 339.6 340.7

Other Revenue 31.7 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8

Additional Income .0 12.0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Total Income 298.3 324.9 315.6 318.2 313.2 304.6 306.7 312.1 317.8 323.5 329.4 323.3 326.0 328.9 331.9 335.0 338.4 341.9 345.5 349.4 353.4 354.4 355.4 356.4 357.4 358.4 359.4 360.4 361.4 362.4 363.4

Nursing Costs -68.6 -72.2 -71.2 -70.1 -67.4 -64.3 -64.5 -65.3 -66.1 -67.0 -67.9 -65.5 -64.2 -62.9 -63.2 -63.5 -63.9 -64.3 -64.7 -65.1 -65.6 -65.7 -65.8 -65.9 -66.0 -66.1 -66.3 -66.4 -66.5 -66.6 -66.7

Consultant Costs -33.9 -35.4 -34.7 -34.0 -32.4 -30.4 -30.4 -30.7 -31.1 -31.5 -31.8 -30.5 -29.8 -29.0 -29.1 -29.1 -29.2 -29.2 -29.3 -29.4 -29.5 -29.6 -29.6 -29.7 -29.7 -29.8 -29.8 -29.9 -29.9 -30.0 -30.0

Other Clinical Costs -21.4 -21.6 -21.1 -20.7 -19.6 -18.4 -18.3 -18.5 -18.7 -18.9 -19.0 -18.3 -17.8 -17.4 -17.4 -17.4 -17.4 -17.4 -17.4 -17.4 -17.5 -17.5 -17.5 -17.5 -17.6 -17.6 -17.6 -17.6 -17.7 -17.7 -17.7

Scientific, Therapeutic & Technical -23.0 -23.2 -22.8 -22.3 -21.3 -20.0 -20.0 -20.3 -20.5 -20.8 -21.0 -20.2 -19.8 -19.4 -19.5 -19.6 -19.7 -19.8 -19.9 -20.1 -20.2 -20.2 -20.3 -20.3 -20.3 -20.4 -20.4 -20.4 -20.5 -20.5 -20.5

Non-Clinical Costs -67.8 -67.8 -66.8 -65.7 -63.9 -62.3 -62.4 -62.8 -63.2 -63.6 -64.1 -61.7 -60.3 -59.0 -59.1 -59.3 -59.4 -59.6 -59.8 -60.0 -60.2 -60.3 -60.4 -60.5 -60.6 -60.7 -60.8 -60.9 -61.0 -61.1 -61.2

Total Pay -214.7 -220.2 -216.6 -212.8 -204.6 -195.5 -195.6 -197.6 -199.6 -201.7 -203.8 -196.2 -191.9 -187.7 -188.2 -188.8 -189.5 -190.3 -191.1 -192.0 -193.0 -193.3 -193.6 -193.9 -194.2 -194.6 -194.9 -195.2 -195.5 -195.8 -196.2

.0 .0 .0

Ambulance .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Clinical Supplies -29.9 -29.9 -29.4 -29.2 -28.3 -27.0 -27.1 -27.5 -27.9 -28.3 -28.8 -27.7 -27.3 -26.8 -27.0 -27.2 -27.4 -27.7 -27.9 -28.2 -28.5 -28.5 -28.6 -28.6 -28.7 -28.7 -28.7 -28.8 -28.8 -28.9 -28.9

Drugs -16.9 -17.3 -17.3 -17.1 -16.5 -15.6 -15.6 -15.7 -15.9 -16.1 -16.3 -15.6 -15.2 -14.9 -14.9 -14.9 -15.0 -15.0 -15.1 -15.1 -15.2 -15.2 -15.2 -15.2 -15.3 -15.3 -15.3 -15.3 -15.3 -15.3 -15.3

Establishment costs -3.8 -3.7 -3.6 -3.6 -3.6 -3.5 -3.5 -3.5 -3.5 -3.5 -3.5 -3.4 -3.3 -3.3 -3.3 -3.3 -3.3 -3.3 -3.3 -3.3 -3.3 -3.3 -3.3 -3.3 -3.3 -3.3 -3.3 -3.3 -3.3 -3.4 -3.4

General Supplies -4.1 -4.2 -4.2 -4.2 -4.2 -4.2 -4.2 -4.2 -4.3 -4.3 -4.3 -4.2 -4.2 -4.2 -4.2 -4.2 -4.3 -4.3 -4.3 -4.3 -4.4 -4.4 -4.4 -4.4 -4.4 -4.4 -4.4 -4.4 -4.4 -4.4 -4.4

Premises and Fixed Plant -10.0 -11.5 -11.4 -11.3 -11.1 -11.0 -11.0 -11.1 -11.1 -11.1 -11.1 -10.8 -10.6 -10.4 -10.4 -10.4 -10.4 -10.4 -10.4 -10.5 -10.5 -10.5 -10.5 -10.5 -10.5 -10.5 -10.6 -10.6 -10.6 -10.6 -10.6

Estates running costs -19.2 -19.7 -20.2 -20.7 -21.2 -21.9 -22.5 -23.1 -23.8 -24.5 -25.2 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Estates running costs after development .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 -15.8 -15.9 -16.0 -16.1 -16.2 -16.3 -16.4 -16.5 -16.6 -16.7 -16.9 -17.0 -17.1 -17.2 -17.3 -17.4 -17.6 -17.7 -17.8 -17.9

Estates for Admin offsite .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 -1.2 -1.2 -1.3 -1.3 -1.3 -1.3 -1.4 -1.4 -1.4 -1.5 -1.5 -1.5 -1.5 -1.6 -1.6 -1.6 -1.7 -1.7 -1.7 -1.8

CNST -14.4 -16.2 -18.4 -20.9 -23.8 -27.1 -27.1 -27.2 -27.2 -27.3 -27.3 -26.3 -25.7 -25.1 -25.2 -25.2 -25.3 -25.3 -25.4 -25.4 -25.5 -25.5 -25.6 -25.6 -25.6 -25.7 -25.7 -25.8 -25.8 -25.9 -25.9

Other non-pay -15.0 -11.8 -11.7 -11.6 -11.5 -11.3 -11.4 -11.4 -11.4 -11.4 -11.4 -11.1 -10.9 -10.7 -10.7 -10.7 -10.7 -10.7 -10.7 -10.7 -10.8 -10.8 -10.8 -10.8 -10.8 -10.8 -10.8 -10.9 -10.9 -10.9 -10.9

Total Non-Pay -113.2 -114.3 -116.2 -118.6 -120.2 -121.6 -122.4 -123.8 -125.1 -126.5 -127.9 -116.1 -114.3 -112.5 -113.0 -113.5 -114.0 -114.5 -115.0 -115.6 -116.2 -116.5 -116.8 -117.1 -117.4 -117.7 -118.0 -118.2 -118.5 -118.8 -119.1

Depreciation -7.5 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -16.1 -16.1 -16.1 -16.1 -16.1 -16.1 -16.1 -16.1 -16.1 -16.1 -16.1 -16.1 -16.1 -16.1 -16.1 -16.1 -16.1 -16.1 -16.1 -16.1

Donated asset depreciation -.1 -.1 -.1 -.1 -.1 -.1 -.1 -.1 -.1 -.1 -.1 -.1 -.1 -.1 -.1 -.1 -.1 -.1 -.1 -.1 -.1 -.1 -.1 -.1 -.1 -.1 -.1 -.1 -.1 -.1 -.1

Impairment of Fixed Assets .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Dividends Payable -3.2 -2.4 -2.4 -2.6 -2.9 -2.8 -2.9 -3.6 -7.8 -15.9 -24.8 -29.0 -27.4 -25.4 -24.2 -23.2 -22.4 -21.6 -21.0 -20.5 -20.0 -19.7 -19.4 -19.2 -18.9 -18.7 -18.5 -18.4 -18.2 -18.1 -18.0

Interest Payable -.9 -1.5 -1.5 -1.5 -1.5 -1.5 -1.5 -1.5 -1.5 -1.5 -1.5 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Total Non-Operating Expenses -11.7 -11.7 -11.7 -11.9 -12.1 -12.1 -12.2 -12.9 -17.1 -25.1 -34.0 -45.3 -43.7 -41.7 -40.5 -39.5 -38.7 -37.9 -37.3 -36.7 -36.3 -36.0 -35.7 -35.4 -35.2 -35.0 -34.8 -34.7 -34.5 -34.4 -34.3

Interest Receivable .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Total Non-Operating Income .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Net -Surplus / Defecit -41.3 -21.2 -28.9 -25.1 -23.7 -24.5 -23.5 -22.0 -24.0 -29.8 -36.3 -34.3 -23.8 -13.0 -9.8 -6.7 -3.7 -.8 2.2 5.1 8.0 8.7 9.3 10.0 10.6 11.2 11.8 12.3 12.9 13.4 13.9

Operating Surplus / Defecit -29.6 -9.6 -17.2 -13.2 -11.6 -12.5 -11.3 -9.2 -7.0 -4.7 -2.3 11.0 19.8 28.6 30.6 32.7 34.9 37.1 39.4 41.8 44.2 44.6 45.0 45.4 45.8 46.2 46.6 46.9 47.3 47.7 48.1

Running Costs -19.2 -19.7 -20.2 -20.7 -21.2 -21.9 -22.5 -23.1 -23.8 -24.5 -25.2 -17.0 -17.1 -17.2 -17.4 -17.5 -17.6 -17.8 -17.9 -18.1 -18.2 -18.3 -18.5 -18.6 -18.8 -18.9 -19.1 -19.2 -19.4 -19.5 -19.7

Greenfield new build .0 .0 .0 .0 .0 .0 .0 .0 -133.0 -183.6 -142.5 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Brownfield new build .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Heavy refurbishment .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Medium refurbishment .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Light refurbishment .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Capital Maintenance .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Additional Infrastructure Required .0 .0 .0 .0 .0 .0 .0 -23.4 -16.1 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Unusual Abnormal Costs .0 .0 .0 .0 .0 .0 .0 -22.9 -60.3 -50.6 -62.1 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

On-Costs .0 -2.9 -5.4 -5.6 -5.8 -6.0 -6.2 -6.4 -15.7 -18.4 -85.9 -17.9 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Land Purchase/Sales .0 .0 .0 .0 .0 .0 -31.4 .0 .0 .0 .0 .0 56.3 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Optimisim Bias .0 .0 .0 .0 .0 .0 .0 .0 -49.3 -68.0 -52.8 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Total Capital Costs .0 -2.9 -5.4 -5.6 -5.8 -6.0 -37.6 -52.7 -274.4 -320.5 -343.3 -17.9 56.3 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Total Transition Costs .0 .0 .0 .0 .0 .0 .0 .0 -7.1 -9.7 -7.6 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0


161



Sub-Category 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 30/31 31/32 32/33 33/34 34/35 35/36 36/37 37/38 38/39 39/40 40/41 41/42 42/43 43/44 44/45 45/46

NHS Revenue 266.6 289.9 292.5 295.2 290.2 281.5 283.6 289.1 294.7 300.5 306.4 309.1 311.9 314.9 318.1 321.4 324.9 328.5 332.3 336.3 340.5 341.5 342.6 343.6 344.6 345.7 346.7 347.7 348.8 349.8 350.9

Other Revenue 31.7 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1


Total Income 298.3 324.9 315.6 318.2 313.2 304.6 306.7 312.1 317.8 323.5 329.4 332.1 335.0 338.0 341.1 344.4 347.9 351.6 355.4 359.4 363.6 364.6 365.6 366.7 367.7 368.7 369.8 370.8 371.8 372.9 373.9

Nursing Costs -68.6 -72.2 -71.2 -70.1 -67.4 -64.3 -64.5 -65.3 -66.1 -67.0 -67.9 -66.5 -65.1 -63.9 -64.2 -64.5 -64.9 -65.3 -65.7 -66.2 -66.7 -66.8 -66.9 -67.0 -67.1 -67.2 -67.3 -67.4 -67.6 -67.7 -67.8





Total Pay -214.7 -220.2 -216.6 -212.8 -204.6 -195.5 -195.6 -197.6 -199.6 -201.7 -203.8 -199.3 -194.9 -190.7 -191.3 -191.9 -192.6 -193.4 -194.3 -195.2 -196.2 -196.6 -196.9 -197.2 -197.5 -197.9 -198.2 -198.5 -198.8 -199.2 -199.5

Ambulance .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0


Drugs -16.9 -17.3 -17.3 -17.1 -16.5 -15.6 -15.6 -15.7 -15.9 -16.1 -16.3 -15.9 -15.5 -15.1 -15.2 -15.2 -15.3 -15.3 -15.4 -15.4 -15.5 -15.5 -15.5 -15.6 -15.6 -15.6 -15.6 -15.6 -15.6 -15.6 -15.6




Estates running costs -19.2 -19.7 -20.2 -20.7 -21.2 -21.9 -22.5 -23.1 -23.8 -24.5 -25.2 -3.0 -3.0 -3.0 -3.1 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Estates running costs after development .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 -13.2 -13.3 -13.4 -13.5 -17.1 -17.2 -17.3 -17.4 -17.5 -17.7 -17.8 -17.9 -18.0 -18.2 -18.3 -18.4 -18.5 -18.6 -18.8 -18.9

Estates for Admin offsite .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 -1.2 -1.2 -1.3 -1.3 -1.3 -1.3 -1.4 -1.4 -1.4 -1.5 -1.5 -1.5 -1.5 -1.6 -1.6 -1.6 -1.7 -1.7 -1.7 -1.8

CNST -14.4 -16.2 -18.4 -20.9 -23.8 -27.1 -27.1 -27.2 -27.2 -27.3 -27.3 -26.7 -26.1 -25.4 -25.5 -25.5 -25.6 -25.6 -25.7 -25.7 -25.8 -25.8 -25.9 -25.9 -26.0 -26.0 -26.1 -26.1 -26.1 -26.2 -26.2

Other non-pay -15.0 -11.8 -11.7 -11.6 -11.5 -11.3 -11.4 -11.4 -11.4 -11.4 -11.4 -11.2 -11.0 -10.8 -10.8 -10.8 -10.8 -10.9 -10.9 -10.9 -10.9 -10.9 -10.9 -10.9 -10.9 -11.0 -11.0 -11.0 -11.0 -11.0 -11.0

Total Non-Pay -113.2 -114.3 -116.2 -118.6 -120.2 -121.6 -122.4 -123.8 -125.1 -126.5 -127.9 -118.1 -116.2 -114.4 -114.9 -115.9 -116.4 -116.9 -117.5 -118.1 -118.7 -119.0 -119.3 -119.6 -119.9 -120.2 -120.5 -120.8 -121.1 -121.4 -121.7

Depreciation -7.5 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -16.6 -16.6 -16.6 -16.6 -16.6 -16.6 -16.6 -16.6 -16.6 -16.6 -16.6 -16.6 -16.6 -16.6 -16.6 -16.6 -16.6 -16.6 -16.6 -16.6










Running Costs -19.2 -19.7 -20.2 -20.7 -21.2 -21.9 -22.5 -23.1 -23.8 -24.5 -25.2 -17.4 -17.5 -17.6 -17.8 -18.4 -18.5 -18.7 -18.8 -19.0 -19.1 -19.3 -19.4 -19.6 -19.7 -19.9 -20.0 -20.2 -20.4 -20.5 -20.7


Brownfield new build .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 -9.4 -23.5 -6.1 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Heavy refurbishment .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 -5.8 -36.1 -18.7 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0




Additional Infrastructure Required .0 .0 .0 .0 .0 .0 .0 -19.6 -13.5 .0 .0 -3.3 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0


On-Costs .0 -2.9 -5.1 -5.3 -5.5 -5.7 -5.9 -6.1 -13.9 -16.2 -72.8 -15.8 -17.6 -7.6 -3.4 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Land Purchase/Sales .0 .0 .0 .0 .0 .0 -25.1 .0 .0 .0 .0 .0 28.8 .0 .0 20.4 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Optimisim Bias .0 .0 .0 .0 .0 .0 .0 .0 -41.3 -56.9 -44.2 .0 -5.5 -21.2 -8.8 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Total Capital Costs .0 -2.9 -5.1 -5.3 -5.5 -5.7 -31.0 -48.5 -240.4 -277.4 -293.5 -19.1 -9.5 -88.4 -36.9 20.4 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Total Transition Costs .0 .0 .0 .0 .0 .0 .0 .0 -5.9 -8.1 -6.3 .0 -.8 -3.0 -1.3 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0


162



Sub-Category 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 30/31 31/32 32/33 33/34 34/35 35/36 36/37 37/38 38/39 39/40 40/41 41/42 42/43 43/44 44/45 45/46

NHS Revenue 266.6 289.9 292.5 295.2 290.2 281.5 283.6 289.1 294.7 300.5 306.4 309.1 311.9 314.9 318.1 321.4 324.9 328.5 332.3 336.3 340.5 341.5 342.6 343.6 344.6 345.7 346.7 347.7 348.8 349.8 350.9

Other Revenue 31.7 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1


Total Income 298.3 324.9 315.6 318.2 313.2 304.6 306.7 312.1 317.8 323.5 329.4 332.1 335.0 338.0 341.1 344.4 347.9 351.6 355.4 359.4 363.6 364.6 365.6 366.7 367.7 368.7 369.8 370.8 371.8 372.9 373.9

Nursing Costs -68.6 -72.2 -71.2 -70.1 -67.4 -64.3 -64.5 -65.3 -66.1 -67.0 -67.9 -66.5 -65.1 -63.9 -64.2 -64.5 -64.9 -65.3 -65.7 -66.2 -66.7 -66.8 -66.9 -67.0 -67.1 -67.2 -67.3 -67.4 -67.6 -67.7 -67.8





Total Pay -214.7 -220.2 -216.6 -212.8 -204.6 -195.5 -195.6 -197.6 -199.6 -201.7 -203.8 -199.3 -194.9 -190.7 -191.3 -191.9 -192.6 -193.4 -194.3 -195.2 -196.2 -196.6 -196.9 -197.2 -197.5 -197.9 -198.2 -198.5 -198.8 -199.2 -199.5

Ambulance .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0


Drugs -16.9 -17.3 -17.3 -17.1 -16.5 -15.6 -15.6 -15.7 -15.9 -16.1 -16.3 -15.9 -15.5 -15.1 -15.2 -15.2 -15.3 -15.3 -15.4 -15.4 -15.5 -15.5 -15.5 -15.6 -15.6 -15.6 -15.6 -15.6 -15.6 -15.6 -15.6




Estates running costs -19.2 -19.7 -20.2 -20.7 -21.2 -21.9 -22.5 -23.1 -19.9 -20.5 -21.1 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Estates running costs after development .0 .0 .0 .0 .0 .0 .0 .0 -4.1 -4.2 -4.2 -17.5 -17.6 -17.7 -17.8 -17.9 -18.1 -18.2 -18.3 -18.4 -18.6 -18.7 -18.8 -18.9 -19.1 -19.2 -19.3 -19.5 -19.6 -19.7 -19.9

Estates for Admin offsite .0 .0 .0 .0 .0 .0 .0 .0 -1.1 -1.2 -1.2 -1.2 -1.2 -1.3 -1.3 -1.3 -1.3 -1.4 -1.4 -1.4 -1.5 -1.5 -1.5 -1.5 -1.6 -1.6 -1.6 -1.7 -1.7 -1.7 -1.8

CNST -14.4 -16.2 -18.4 -20.9 -23.8 -27.1 -27.1 -27.2 -27.2 -27.3 -27.3 -26.7 -26.1 -25.4 -25.5 -25.5 -25.6 -25.6 -25.7 -25.7 -25.8 -25.8 -25.9 -25.9 -26.0 -26.0 -26.1 -26.1 -26.1 -26.2 -26.2

Other non-pay -15.0 -11.8 -11.7 -11.6 -11.5 -11.3 -11.4 -11.4 -11.4 -11.4 -11.4 -11.2 -11.0 -10.8 -10.8 -10.8 -10.8 -10.9 -10.9 -10.9 -10.9 -10.9 -10.9 -10.9 -10.9 -11.0 -11.0 -11.0 -11.0 -11.0 -11.0

Total Non-Pay -113.2 -114.3 -116.2 -118.6 -120.2 -121.6 -122.4 -123.8 -126.4 -127.8 -129.2 -119.4 -117.5 -115.7 -116.2 -116.7 -117.3 -117.8 -118.4 -119.0 -119.6 -119.9 -120.2 -120.5 -120.8 -121.1 -121.4 -121.7 -122.1 -122.4 -122.7

Depreciation -7.5 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -15.0 -15.0 -15.0 -15.0 -15.0 -15.0 -15.0 -15.0 -15.0 -15.0 -15.0 -15.0 -15.0 -15.0 -15.0 -15.0 -15.0 -15.0 -15.0 -15.0








Net -Surplus / Defecit -41.3 -21.2 -28.9 -25.1 -23.7 -25.0 -24.6 -24.0 -26.7 -31.0 -36.1 -28.3 -18.2 -8.0 -5.0 -2.2 .5 3.4 6.2 9.0 11.8 12.4 12.7 13.0 13.4 13.9 14.3 14.8 15.2 15.6 15.7


Running Costs -19.2 -19.7 -20.2 -20.7 -21.2 -21.9 -22.5 -23.1 -25.1 -25.8 -26.5 -18.7 -18.8 -19.0 -19.1 -19.3 -19.4 -19.6 -19.7 -19.9 -20.0 -20.2 -20.3 -20.5 -20.6 -20.8 -21.0 -21.1 -21.3 -21.5 -21.6


Brownfield new build .0 .0 .0 .0 -.5 -7.6 -8.1 -10.0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0


Medium refurbishment .0 .0 .0 .0 -.3 -5.0 -5.4 -6.6 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Light refurbishment .0 .0 .0 .0 -.3 -4.0 -4.3 -5.3 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Capital Maintenance .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 -12.0 .0 .0 .0 .0 .0 .0 -15.3 .0 .0 .0 .0 .0 .0 .0 -20.2

Additional Infrastructure Required .0 .0 .0 .0 -2.2 .0 .0 -19.6 -13.5 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0


On-Costs .0 -2.8 -5.9 -6.2 -6.4 -9.2 -9.5 -10.1 -13.2 -15.4 -72.0 -15.0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Land Purchase/Sales .0 .0 .0 .0 .0 .0 -25.1 .0 23.9 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Optimisim Bias .0 .0 .0 .0 .0 -3.0 -11.7 -4.9 -41.3 -56.9 -44.2 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Total Capital Costs .0 -2.8 -5.9 -6.2 -9.7 -28.8 -64.1 -79.3 -215.7 -276.6 -292.7 -15.0 .0 .0 .0 -12.0 .0 .0 .0 .0 .0 .0 -15.3 .0 .0 .0 .0 .0 .0 .0 -20.2

Total Transition Costs .0 .0 .0 .0 -.1 -.8 -.9 -1.1 -5.9 -8.1 -6.3 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0


163



Sub-Category 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 30/31 31/32 32/33 33/34 34/35 35/36 36/37 37/38 38/39 39/40 40/41 41/42 42/43 43/44 44/45 45/46

NHS Revenue 266.6 289.9 292.5 295.2 290.2 281.5 283.6 289.1 294.7 292.2 297.9 300.5 303.2 306.1 309.1 312.3 315.6 319.1 322.8 326.6 330.6 331.6 332.6 333.6 334.6 335.6 336.6 337.6 338.6 339.6 340.7

Other Revenue 31.7 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8


Total Income 298.3 324.9 315.6 318.2 313.2 304.6 306.7 312.1 317.8 315.0 320.7 323.3 326.0 328.9 331.9 335.0 338.4 341.9 345.5 349.4 353.4 354.4 355.4 356.4 357.4 358.4 359.4 360.4 361.4 362.4 363.4

Nursing Costs -68.6 -72.2 -71.2 -70.1 -67.4 -64.3 -64.5 -65.3 -66.1 -64.1 -63.0 -61.7 -62.0 -62.3 -62.6 -62.9 -63.3 -63.6 -64.0 -64.5 -64.9 -65.1 -65.2 -65.3 -65.4 -65.5 -65.6 -65.7 -65.8 -65.9 -66.0





Total Pay -214.7 -220.2 -216.6 -212.8 -204.6 -195.5 -195.6 -197.6 -199.6 -192.9 -189.3 -185.0 -185.4 -185.8 -186.4 -187.0 -187.6 -188.4 -189.2 -190.1 -191.1 -191.4 -191.7 -192.0 -192.3 -192.6 -192.9 -193.3 -193.6 -193.9 -194.2

Ambulance .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0


Drugs -16.9 -17.3 -17.3 -17.1 -16.5 -15.6 -15.6 -15.7 -15.9 -15.3 -15.0 -14.7 -14.7 -14.7 -14.7 -14.8 -14.8 -14.9 -14.9 -15.0 -15.1 -15.1 -15.1 -15.1 -15.1 -15.1 -15.1 -15.1 -15.1 -15.1 -15.2




Estates running costs -19.2 -19.7 -20.2 -20.7 -21.2 -21.9 -22.5 -23.1 -23.8 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Estates running costs after development .0 .0 .0 .0 .0 .0 .0 .0 .0 -15.3 -15.6 -15.8 -15.9 -16.0 -16.1 -16.2 -16.3 -16.4 -16.5 -16.6 -16.7 -16.9 -17.0 -17.1 -17.2 -17.3 -17.4 -17.6 -17.7 -17.8 -17.9

Estates for Admin offsite .0 .0 .0 .0 .0 .0 .0 .0 .0 -1.2 -1.2 -1.2 -1.2 -1.3 -1.3 -1.3 -1.3 -1.4 -1.4 -1.4 -1.5 -1.5 -1.5 -1.5 -1.6 -1.6 -1.6 -1.7 -1.7 -1.7 -1.8

CNST -14.4 -16.2 -18.4 -20.9 -23.8 -27.1 -27.1 -27.2 -27.2 -26.1 -25.4 -24.8 -24.8 -24.9 -24.9 -25.0 -25.0 -25.1 -25.1 -25.2 -25.2 -25.2 -25.3 -25.3 -25.4 -25.4 -25.5 -25.5 -25.6 -25.6 -25.7

Other non-pay -15.0 -11.8 -11.7 -11.6 -11.5 -11.3 -11.4 -11.4 -11.4 -11.0 -10.8 -10.6 -10.6 -10.6 -10.6 -10.6 -10.6 -10.6 -10.6 -10.7 -10.7 -10.7 -10.7 -10.7 -10.7 -10.7 -10.8 -10.8 -10.8 -10.8 -10.8

Total Non-Pay -113.2 -114.3 -116.2 -118.6 -120.2 -121.6 -122.4 -123.8 -125.1 -114.2 -112.6 -110.8 -111.2 -111.6 -112.1 -112.6 -113.1 -113.6 -114.1 -114.7 -115.3 -115.6 -115.9 -116.2 -116.4 -116.7 -117.0 -117.3 -117.6 -117.9 -118.2

Depreciation -7.5 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -14.9 -14.9 -14.9 -14.9 -14.9 -14.9 -14.9 -14.9 -14.9 -14.9 -14.9 -14.9 -14.9 -14.9 -14.9 -14.9 -14.9 -14.9 -14.9 -14.9 -14.9 -14.9








Net -Surplus / Defecit -41.3 -21.2 -29.0 -25.3 -24.3 -28.1 -32.5 -35.9 -37.2 -29.6 -16.8 -5.6 -2.7 -.1 2.5 5.1 7.6 10.1 12.7 15.2 17.7 18.0 18.3 18.6 18.8 19.1 19.4 19.6 19.8 20.1 20.3

Operating Surplus / Defecit -29.6 -9.6 -17.2 -13.2 -11.6 -12.5 -11.3 -9.2 -7.0 7.9 18.9 27.5 29.4 31.4 33.4 35.5 37.6 39.9 42.2 44.6 47.0 47.4 47.8 48.2 48.6 49.0 49.4 49.8 50.2 50.6 51.0

Running Costs -19.2 -19.7 -20.2 -20.7 -21.2 -21.9 -22.5 -23.1 -23.8 -16.5 -16.8 -17.0 -17.1 -17.2 -17.4 -17.5 -17.6 -17.8 -17.9 -18.1 -18.2 -18.3 -18.5 -18.6 -18.8 -18.9 -19.1 -19.2 -19.4 -19.5 -19.7

Greenfield new build .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Brownfield new build .0 .0 .0 .0 .0 -100.0 -165.6 -85.7 -66.5 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0





Additional Infrastructure Required .0 .0 .0 .0 .0 -36.4 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Unusual Abnormal Costs .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

On-Costs .0 -2.9 -10.8 -11.2 -11.6 -11.1 -14.3 -77.1 -22.4 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Land Purchase/Sales .0 .0 .0 .0 -20.8 .0 .0 .0 .0 50.8 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Optimisim Bias .0 .0 .0 .0 .0 -37.0 -61.3 -31.7 -24.6 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Total Capital Costs .0 -2.9 -10.8 -11.2 -32.4 -184.4 -241.2 -194.5 -113.5 50.8 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Total Transition Costs .0 .0 .0 .0 .0 -5.3 -8.8 -4.6 -3.5 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0


164

D.7 Option 7&8 Affordability


Sub-Category 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 30/31 31/32 32/33 33/34 34/35 35/36 36/37 37/38 38/39 39/40 40/41 41/42 42/43 43/44 44/45 45/46

NHS Revenue 266.6 289.9 292.5 295.2 290.2 281.5 283.6 289.1 294.7 300.5 306.4 309.1 311.9 314.9 318.1 321.4 315.6 319.1 322.8 326.6 330.6 331.6 332.6 333.6 334.6 335.6 336.6 337.6 338.6 339.6 340.7

Other Revenue 31.7 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8 22.8


Total Income 298.3 324.9 315.6 318.2 313.2 304.6 306.7 312.1 317.8 323.5 329.4 332.1 335.0 338.0 341.1 344.4 338.4 341.9 345.5 349.4 353.4 354.4 355.4 356.4 357.4 358.4 359.4 360.4 361.4 362.4 363.4

Nursing Costs -68.6 -72.2 -71.2 -70.1 -67.4 -64.3 -64.5 -65.3 -66.1 -67.0 -67.9 -66.8 -67.4 -66.4 -67.1 -66.1 -65.8 -66.2 -66.6 -67.1 -67.6 -67.7 -67.8 -67.9 -68.0 -68.1 -68.2 -68.3 -68.5 -68.6 -68.7





Total Pay -214.7 -220.2 -216.6 -212.8 -204.6 -195.5 -195.6 -197.6 -199.6 -201.7 -203.8 -200.3 -201.7 -198.3 -199.9 -196.7 -195.1 -195.9 -196.8 -197.7 -198.7 -199.0 -199.3 -199.7 -200.0 -200.3 -200.7 -201.0 -201.3 -201.7 -202.0

Ambulance .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0


Drugs -16.9 -17.3 -17.3 -17.1 -16.5 -15.6 -15.6 -15.7 -15.9 -16.1 -16.3 -16.0 -16.1 -15.8 -15.9 -15.6 -15.4 -15.5 -15.5 -15.6 -15.7 -15.7 -15.7 -15.7 -15.7 -15.7 -15.7 -15.8 -15.8 -15.8 -15.8




Estates running costs -19.2 -19.7 -20.2 -20.7 -21.2 -21.9 -22.5 -23.1 -23.8 -24.5 -25.2 -25.3 -26.0 -26.1 -26.9 -27.0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Estates running costs after development .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 -17.3 -17.4 -17.5 -17.6 -17.7 -17.8 -18.0 -18.1 -18.2 -18.3 -18.5 -18.6 -18.7 -18.8 -19.0

Estates for Admin offsite .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 -1.3 -1.4 -1.4 -1.4 -1.5 -1.5 -1.5 -1.5 -1.6 -1.6 -1.6 -1.7 -1.7 -1.7 -1.8

CNST -14.4 -16.2 -18.4 -20.9 -23.8 -27.1 -27.1 -27.2 -27.2 -27.3 -27.3 -26.8 -27.0 -26.5 -26.7 -26.2 -26.1 -26.1 -26.1 -26.2 -26.2 -26.3 -26.3 -26.4 -26.4 -26.5 -26.5 -26.6 -26.6 -26.7 -26.7

Other non-pay -15.0 -11.8 -11.7 -11.6 -11.5 -11.3 -11.4 -11.4 -11.4 -11.4 -11.4 -11.3 -11.3 -11.2 -11.2 -11.0 -11.0 -11.0 -11.0 -11.0 -11.0 -11.0 -11.1 -11.1 -11.1 -11.1 -11.1 -11.1 -11.1 -11.2 -11.2

Total Non-Pay -113.2 -114.3 -116.2 -118.6 -120.2 -121.6 -122.4 -123.8 -125.1 -126.5 -127.9 -126.5 -128.0 -126.5 -128.1 -126.7 -117.6 -118.2 -118.7 -119.3 -119.9 -120.2 -120.5 -120.8 -121.1 -121.4 -121.7 -122.0 -122.4 -122.7 -123.0

Depreciation -7.5 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -11.3 -11.3 -11.3 -11.3 -11.3 -11.3 -11.3 -11.3 -11.3 -11.3 -11.3 -11.3 -11.3 -11.3 -11.3










Running Costs -19.2 -19.7 -20.2 -20.7 -21.2 -21.9 -22.5 -23.1 -23.8 -24.5 -25.2 -25.3 -26.0 -26.1 -26.9 -27.0 -18.6 -18.7 -18.9 -19.0 -19.2 -19.3 -19.5 -19.6 -19.8 -19.9 -20.1 -20.3 -20.4 -20.6 -20.7


Brownfield new build .0 .0 .0 .0 .0 -24.5 -25.3 -26.2 -27.1 -35.1 -36.3 -20.1 -20.8 -21.5 -25.0 -25.9 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Heavy refurbishment .0 .0 .0 .0 .0 -5.4 -5.6 -5.8 -6.0 -7.7 -8.0 -4.4 -4.6 -4.7 -5.5 -5.7 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Medium refurbishment .0 .0 .0 .0 .0 -3.5 -3.7 -3.8 -3.9 -5.1 -5.2 -2.9 -3.0 -3.1 -3.6 -3.7 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Light refurbishment .0 .0 .0 .0 .0 -.9 -.9 -1.0 -1.0 -1.3 -1.4 -.7 -.8 -.8 -.9 -1.0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Capital Maintenance .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 -9.8 .0 .0 .0 .0 -11.6 .0 .0 .0 .0 -13.8

Additional Infrastructure Required .0 .0 .0 .0 .0 -18.9 -3.5 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0


On-Costs .0 -2.4 -9.2 -9.5 -9.8 -3.5 -3.7 -3.8 -29.6 -4.5 -21.9 -3.7 -3.9 -19.2 -4.3 -16.7 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Land Purchase/Sales .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 27.8 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Optimisim Bias .0 .0 .0 .0 .0 -12.4 -12.8 -13.2 -13.7 -17.7 -18.3 -10.1 -10.5 -10.8 -12.6 -13.1 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Total Capital Costs .0 -2.4 -9.2 -9.5 -9.8 -69.1 -55.4 -53.8 -81.4 -71.5 -91.1 -14.1 -43.4 -60.2 -52.0 -66.1 .0 .0 .0 .0 -9.8 .0 .0 .0 .0 -11.6 .0 .0 .0 .0 -13.8

Total Transition Costs .0 .0 .0 .0 .0 -1.8 -1.8 -1.9 -1.9 -2.5 -2.6 -1.4 -1.5 -1.5 -1.8 -1.9 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0


165



Sub-Category 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 30/31 31/32 32/33 33/34 34/35 35/36 36/37 37/38 38/39 39/40 40/41 41/42 42/43 43/44 44/45 45/46

NHS Revenue 266.6 289.9 292.5 295.2 290.2 281.5 283.6 289.1 294.7 300.5 306.4 309.1 311.9 314.9 318.1 321.4 324.9 328.5 332.3 336.3 340.5 341.5 342.6 343.6 344.6 345.7 346.7 347.7 348.8 349.8 350.9

Other Revenue 31.7 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1


Total Income 298.3 324.9 315.6 318.2 313.2 304.6 306.7 312.1 317.8 323.5 329.4 332.1 335.0 338.0 341.1 344.4 347.9 351.6 355.4 359.4 363.6 364.6 365.6 366.7 367.7 368.7 369.8 370.8 371.8 372.9 373.9

Nursing Costs -68.6 -72.2 -71.2 -70.1 -67.4 -64.3 -64.5 -65.3 -66.1 -65.0 -64.0 -62.7 -62.9 -63.2 -63.5 -63.9 -64.3 -64.7 -65.1 -65.5 -66.0 -66.1 -66.2 -66.3 -66.4 -66.6 -66.7 -66.8 -66.9 -67.0 -67.1





Total Pay -214.7 -220.2 -216.6 -212.8 -204.6 -195.5 -195.6 -197.6 -199.6 -195.9 -192.2 -187.9 -188.3 -188.8 -189.4 -190.0 -190.7 -191.5 -192.4 -193.3 -194.3 -194.6 -194.9 -195.3 -195.6 -195.9 -196.2 -196.5 -196.9 -197.2 -197.5

Ambulance .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0


Drugs -16.9 -17.3 -17.3 -17.1 -16.5 -15.6 -15.6 -15.7 -15.9 -15.6 -15.3 -15.0 -15.0 -15.0 -15.0 -15.1 -15.1 -15.2 -15.2 -15.3 -15.4 -15.4 -15.4 -15.4 -15.4 -15.4 -15.4 -15.4 -15.5 -15.5 -15.5







CNST -14.4 -16.2 -18.4 -20.9 -23.8 -27.1 -27.1 -27.2 -27.2 -26.4 -25.7 -25.1 -25.1 -25.2 -25.2 -25.3 -25.3 -25.4 -25.4 -25.5 -25.5 -25.6 -25.6 -25.6 -25.7 -25.7 -25.8 -25.8 -25.9 -25.9 -26.0

Other non-pay -15.0 -11.8 -11.7 -11.6 -11.5 -11.3 -11.4 -11.4 -11.4 -11.1 -10.9 -10.7 -10.7 -10.7 -10.7 -10.7 -10.7 -10.8 -10.8 -10.8 -10.8 -10.8 -10.8 -10.8 -10.9 -10.9 -10.9 -10.9 -10.9 -10.9 -10.9

Total Non-Pay -113.2 -114.3 -116.2 -118.6 -120.2 -121.6 -122.4 -123.8 -126.4 -116.8 -115.1 -113.3 -113.8 -114.2 -114.7 -115.2 -115.7 -116.3 -116.8 -117.4 -118.0 -118.3 -118.6 -118.9 -119.2 -119.5 -119.8 -120.1 -120.4 -120.7 -121.0

Depreciation -7.5 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -13.8 -13.8 -13.8 -13.8 -13.8 -13.8 -13.8 -13.8 -13.8 -13.8 -13.8 -13.8 -13.8 -13.8 -13.8 -13.8 -13.8 -13.8 -13.8 -13.8 -13.8 -13.8








Net -Surplus / Defecit -41.3 -21.2 -28.9 -25.3 -24.1 -27.5 -31.8 -34.8 -37.2 -24.7 -12.3 -1.0 1.7 4.2 6.7 9.0 11.3 13.7 16.2 18.6 21.1 21.3 21.2 21.1 21.3 21.4 21.6 21.7 21.9 22.0 21.9

Operating Surplus / Defecit -29.6 -9.6 -17.2 -13.2 -11.6 -12.5 -11.3 -9.2 -8.3 10.9 22.1 30.9 32.9 34.9 37.0 39.2 41.5 43.8 46.2 48.7 51.3 51.7 52.1 52.5 52.9 53.3 53.7 54.1 54.5 55.0 55.4

Running Costs -19.2 -19.7 -20.2 -20.7 -21.2 -21.9 -22.5 -23.1 -25.1 -17.6 -17.9 -18.1 -18.2 -18.3 -18.5 -18.6 -18.8 -18.9 -19.1 -19.2 -19.4 -19.5 -19.7 -19.8 -20.0 -20.1 -20.3 -20.4 -20.6 -20.8 -20.9


Brownfield new build .0 .0 .0 .0 -.5 -91.3 -146.7 -81.7 -55.7 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0


Medium refurbishment .0 .0 .0 .0 -.3 -5.0 -5.4 -6.6 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0


Capital Maintenance .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 -12.0 .0 .0 .0 .0 .0 .0 -15.3 .0 .0 .0 .0 .0 .0 .0 -20.2

Additional Infrastructure Required .0 .0 .0 .0 -2.2 -30.4 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0


On-Costs .0 -2.8 -10.5 -10.8 -11.3 -13.5 -16.3 -46.5 -42.4 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Land Purchase/Sales .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Optimisim Bias .0 .0 .0 .0 .0 -34.0 -63.1 -31.4 -20.6 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Total Capital Costs .0 -2.8 -10.5 -10.8 -14.5 -178.3 -235.8 -171.6 -118.7 .0 .0 .0 .0 .0 .0 -12.0 .0 .0 .0 .0 .0 .0 -15.3 .0 .0 .0 .0 .0 .0 .0 -20.2

Total Transition Costs .0 .0 .0 .0 -.1 -5.3 -8.2 -4.9 -3.0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0


166



Sub-Category 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 30/31 31/32 32/33 33/34 34/35 35/36 36/37 37/38 38/39 39/40 40/41 41/42 42/43 43/44 44/45 45/46

NHS Revenue 266.6 289.9 292.5 295.2 290.2 281.5 283.6 289.1 294.7 300.5 306.4 309.1 311.9 314.9 318.1 321.4 324.9 328.5 332.3 336.3 340.5 341.5 342.6 343.6 344.6 345.7 346.7 347.7 348.8 349.8 350.9

Other Revenue 31.7 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1


Total Income 298.3 324.9 315.6 318.2 313.2 304.6 306.7 312.1 317.8 323.5 329.4 332.1 335.0 338.0 341.1 344.4 347.9 351.6 355.4 359.4 363.6 364.6 365.6 366.7 367.7 368.7 369.8 370.8 371.8 372.9 373.9

Nursing Costs -68.6 -72.2 -71.2 -70.1 -67.4 -64.3 -64.5 -65.3 -66.1 -67.0 -66.2 -66.8 -65.8 -66.4 -65.4 -66.1 -66.5 -66.9 -67.4 -67.8 -68.3 -68.4 -68.5 -68.7 -68.8 -68.9 -69.0 -69.1 -69.2 -69.3 -69.5





Total Pay -214.7 -220.2 -216.6 -212.8 -204.6 -195.5 -195.6 -197.6 -199.6 -201.7 -198.9 -200.2 -196.8 -198.3 -195.0 -196.6 -197.4 -198.2 -199.1 -200.0 -201.1 -201.4 -201.7 -202.1 -202.4 -202.7 -203.1 -203.4 -203.7 -204.1 -204.4

Ambulance .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0


Drugs -16.9 -17.3 -17.3 -17.1 -16.5 -15.6 -15.6 -15.7 -15.9 -16.1 -15.9 -16.0 -15.7 -15.8 -15.5 -15.6 -15.6 -15.7 -15.8 -15.8 -15.9 -15.9 -15.9 -16.0 -16.0 -16.0 -16.0 -16.0 -16.0 -16.0 -16.0




Estates running costs -19.2 -19.7 -20.2 -20.7 -21.2 -21.9 -22.5 -23.1 -19.9 -20.9 -21.0 -21.9 -22.0 -22.9 -22.9 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0



CNST -14.4 -16.2 -18.4 -20.9 -23.8 -27.1 -27.1 -27.2 -27.2 -27.3 -26.6 -26.8 -26.3 -26.5 -26.0 -26.2 -26.2 -26.3 -26.3 -26.4 -26.4 -26.5 -26.5 -26.6 -26.6 -26.7 -26.7 -26.8 -26.8 -26.9 -26.9

Other non-pay -15.0 -11.8 -11.7 -11.6 -11.5 -11.3 -11.4 -11.4 -11.4 -11.4 -11.2 -11.3 -11.1 -11.2 -11.0 -11.0 -11.1 -11.1 -11.1 -11.1 -11.1 -11.1 -11.1 -11.2 -11.2 -11.2 -11.2 -11.2 -11.2 -11.2 -11.3

Total Non-Pay -113.2 -114.3 -116.2 -118.6 -120.2 -121.6 -122.4 -123.8 -126.4 -128.3 -126.8 -128.5 -127.1 -128.8 -127.5 -118.8 -119.4 -119.9 -120.5 -121.1 -121.8 -122.1 -122.4 -122.7 -123.0 -123.3 -123.6 -123.9 -124.2 -124.6 -124.9

Depreciation -7.5 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -11.6 -11.6 -11.6 -11.6 -11.6 -11.6 -11.6 -11.6 -11.6 -11.6 -11.6 -11.6 -11.6 -11.6 -11.6 -11.6








Net -Surplus / Defecit -41.3 -21.2 -28.9 -25.2 -23.9 -26.0 -26.6 -26.2 -26.8 -26.3 -17.6 -17.9 -11.5 -13.0 -6.5 -.9 1.3 3.9 6.6 9.2 11.7 12.0 12.2 12.4 12.7 12.9 13.1 13.5 13.8 14.1 14.0

Operating Surplus / Defecit -29.6 -9.6 -17.2 -13.2 -11.6 -12.5 -11.3 -9.2 -8.3 -6.4 3.7 3.4 11.0 10.8 18.6 29.0 31.2 33.5 35.8 38.2 40.7 41.1 41.5 41.9 42.3 42.7 43.1 43.5 43.9 44.3 44.7

Running Costs -19.2 -19.7 -20.2 -20.7 -21.2 -21.9 -22.5 -23.1 -25.1 -26.2 -26.4 -27.4 -27.5 -28.5 -28.6 -19.1 -19.3 -19.4 -19.6 -19.7 -19.9 -20.0 -20.2 -20.3 -20.5 -20.7 -20.8 -21.0 -21.1 -21.3 -21.5


Brownfield new build .0 .0 .0 .0 -.5 -26.6 -27.8 -30.4 -21.2 -27.4 -28.3 -23.5 -24.3 -18.9 -19.5 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Heavy refurbishment .0 .0 .0 .0 .0 -8.6 -8.9 -9.2 -9.6 -12.4 -12.8 -10.6 -11.0 -8.5 -8.8 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Medium refurbishment .0 .0 .0 .0 -.3 -7.1 -7.5 -8.9 -2.3 -3.0 -3.1 -2.6 -2.6 -2.1 -2.1 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0


Capital Maintenance .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 -12.0 .0 .0 .0 .0 -9.5 .0 -15.3 .0 .0 -11.2 .0 .0 .0 .0 -33.5

Additional Infrastructure Required .0 .0 .0 .0 -2.2 -17.4 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0


On-Costs .0 -2.5 -8.0 -8.2 -8.6 -7.9 -8.2 -8.7 -27.3 -4.7 -20.3 -4.6 -18.0 -4.5 -15.3 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0


Optimisim Bias .0 .0 .0 .0 .0 -13.7 -22.8 -16.3 -11.9 -15.4 -15.9 -13.2 -13.6 -10.6 -11.0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Total Capital Costs .0 -2.5 -8.0 -8.2 -11.8 -85.4 -79.6 -78.9 -72.2 -62.8 -80.5 -54.4 -69.6 -44.5 -56.7 -12.0 .0 .0 .0 .0 -9.5 .0 -15.3 .0 .0 -11.2 .0 .0 .0 .0 -33.5

.0 .0 .0 -1.1 -46.4 -48.6 -53.8 -33.0 -42.7 -44.2 -36.6 -37.9 -29.4 -30.5

Total Transition Costs .0 .0 .0 .0 -.1 -2.3 -2.4 -2.7 -1.7 -2.2 -2.3 -1.9 -1.9 -1.5 -1.6 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0


167

D.10 Option 13&14 Affordability


Sub-Category 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 30/31 31/32 32/33 33/34 34/35 35/36 36/37 37/38 38/39 39/40 40/41 41/42 42/43 43/44 44/45 45/46

NHS Revenue 266.6 289.9 292.5 295.2 290.2 281.5 283.6 289.1 294.7 300.5 306.4 309.1 311.9 314.9 318.1 321.4 324.9 328.5 332.3 336.3 340.5 341.5 342.6 343.6 344.6 345.7 346.7 347.7 348.8 349.8 350.9

Other Revenue 31.7 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1 23.1


Total Income 298.3 324.9 315.6 318.2 313.2 304.6 306.7 312.1 317.8 323.5 329.4 332.1 335.0 338.0 341.1 344.4 347.9 351.6 355.4 359.4 363.6 364.6 365.6 366.7 367.7 368.7 369.8 370.8 371.8 372.9 373.9

Nursing Costs -68.6 -72.2 -71.2 -70.1 -67.4 -64.3 -64.5 -65.3 -66.1 -66.7 -67.2 -67.5 -67.8 -68.1 -68.4 -68.8 -69.2 -69.6 -70.1 -70.6 -71.1 -71.2 -71.3 -71.4 -71.5 -71.7 -71.8 -71.9 -72.0 -72.1 -72.3





Total Pay -214.7 -220.2 -216.6 -212.8 -204.6 -195.5 -195.6 -197.6 -199.6 -200.7 -201.9 -202.3 -202.7 -203.2 -203.8 -204.5 -205.3 -206.1 -207.1 -208.1 -209.1 -209.5 -209.8 -210.2 -210.5 -210.9 -211.2 -211.6 -211.9 -212.3 -212.6

Ambulance .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0


Drugs -16.9 -17.3 -17.3 -17.1 -16.5 -15.6 -15.6 -15.7 -15.9 -16.0 -16.1 -16.1 -16.1 -16.2 -16.2 -16.2 -16.3 -16.4 -16.4 -16.5 -16.6 -16.6 -16.6 -16.6 -16.6 -16.6 -16.6 -16.7 -16.7 -16.7 -16.7





Estates running costs after development .0 .0 .0 .0 .0 .0 .0 .0 .0 -19.6 -20.0 -20.2 -20.3 -20.4 -20.6 -20.7 -20.9 -21.0 -21.1 -21.3 -21.4 -21.6 -21.7 -21.9 -22.0 -22.2 -22.3 -22.5 -22.6 -22.8 -22.9

Estates for Admin offsite .0 .0 .0 .0 .0 .0 .0 .0 .0 -1.2 -1.2 -1.2 -1.2 -1.3 -1.3 -1.3 -1.3 -1.4 -1.4 -1.4 -1.5 -1.5 -1.5 -1.5 -1.6 -1.6 -1.6 -1.7 -1.7 -1.7 -1.8

CNST -14.4 -16.2 -18.4 -20.9 -23.8 -27.1 -27.1 -27.2 -27.2 -27.1 -27.0 -27.1 -27.1 -27.2 -27.2 -27.3 -27.3 -27.4 -27.4 -27.5 -27.5 -27.6 -27.6 -27.7 -27.7 -27.8 -27.8 -27.9 -27.9 -28.0 -28.0

Other non-pay -15.0 -11.8 -11.7 -11.6 -11.5 -11.3 -11.4 -11.4 -11.4 -11.4 -11.3 -11.4 -11.4 -11.4 -11.4 -11.4 -11.4 -11.4 -11.5 -11.5 -11.5 -11.5 -11.5 -11.5 -11.5 -11.6 -11.6 -11.6 -11.6 -11.6 -11.6

Total Non-Pay -113.2 -114.3 -116.2 -118.6 -120.2 -121.6 -122.4 -123.8 -125.1 -122.3 -123.0 -123.5 -123.9 -124.5 -125.0 -125.5 -126.1 -126.7 -127.3 -128.0 -128.6 -129.0 -129.3 -129.6 -130.0 -130.3 -130.7 -131.0 -131.3 -131.7 -132.0

Depreciation -7.5 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -7.6 -6.2 -6.2 -6.2 -6.2 -6.2 -6.2 -6.2 -6.2 -6.2 -6.2 -6.2 -6.2 -6.2 -6.2 -6.2 -6.2 -6.2 -6.2 -6.2 -6.2 -6.2 -6.2








Net -Surplus / Defecit -41.3 -21.2 -28.9 -25.6 -25.1 -26.8 -26.0 -25.1 -25.5 -17.5 -12.6 -8.5 -6.0 -4.2 -2.4 .0 2.4 4.8 6.4 8.1 10.5 10.7 10.9 10.2 9.5 9.7 10.0 10.2 9.4 8.6 8.8

Operating Surplus / Defecit -29.6 -9.6 -17.2 -13.2 -11.6 -12.5 -11.3 -9.2 -7.0 .4 4.5 6.4 8.3 10.3 12.3 14.4 16.5 18.7 21.0 23.4 25.8 26.1 26.5 26.8 27.2 27.5 27.9 28.2 28.6 28.9 29.3

Running Costs -19.2 -19.7 -20.2 -20.7 -21.2 -21.9 -22.5 -23.1 -23.8 -20.8 -21.2 -21.4 -21.5 -21.7 -21.9 -22.0 -22.2 -22.4 -22.5 -22.7 -22.9 -23.1 -23.2 -23.4 -23.6 -23.8 -24.0 -24.1 -24.3 -24.5 -24.7


Brownfield new build .0 .0 .0 .0 .0 .0 .0 -38.8 -40.2 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0



Light refurbishment .0 .0 .0 -20.8 -21.6 -16.7 -17.3 -17.9 -18.5 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Capital Maintenance .0 .0 .0 .0 .0 .0 .0 .0 -37.5 .0 .0 .0 .0 -44.6 .0 .0 .0 .0 -52.9 .0 .0 .0 .0 -62.9 .0 .0 .0 .0 -74.6 .0 .0

Additional Infrastructure Required .0 .0 .0 .0 .0 -3.8 -.7 -2.3 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0


On-Costs .0 -3.7 -9.0 -4.2 -4.3 -3.3 -3.5 -34.3 -9.3 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0


Optimisim Bias .0 .0 .0 -11.7 -12.1 -9.4 -9.7 -10.0 -10.4 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

Total Capital Costs .0 -3.7 -9.0 -36.6 -37.9 -33.2 -31.1 -103.4 -116.0 .0 .0 .0 .0 -44.6 .0 .0 .0 .0 -52.9 .0 .0 .0 .0 -62.9 .0 .0 .0 .0 -74.6 .0 .0

Total Transition Costs .0 .0 .0 -1.0 -1.1 -.8 -.9 -2.8 -2.9 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0


168

This Appendix contains the current risk register for the proposed acute transformation.

ID Description Owner RAG Mitigation

R1 There is a risk that the Your

Care, Your Future programme

may not deliver the forecast

demand reduction for acute

services in the planned

timescales. This would result in

the acute hospital being

incorrectly sized and/or

increased capital investment to

provide required capacity; an

additional 110 beds would be

required if only 75% of the

forecast reduction is achieved,

and 250 beds if only 50% of the

forecast reduction is achieved.

David

Evans

A The forecast demand reductions have been

based on the scale of opportunity in

comparison with top quartile performance.

Specific plans to deliver the planned

reductions are now being developed as part

of the STP for Hertfordshire and west Essex.

Sensitivity analysis has been performed to

establish the potential impact of the

assumptions being incorrect and all

assumptions will be reviewed at OBC stage.

The future hospital will be designed to offer

flexibility, such that additional capacity can

be added to meet demand if required.

R2 There is a risk that stakeholder

groups may not support the

preferred option. This could lead

to delays to implementation if

additional work is required to

provide further evidence in

support of the preferred option

before approval can be given.

Juliet

Rodgers

A Stakeholder groups have been involved in

the Your Care, Your Future programme

since its inception and have continued to be

involved during the acute transformation

options appraisal process. Queries and

concerns raised by stakeholders have been

addressed during the process and the choice

of preferred way forward has received

support from the vast majority of stakeholder

groups. Some concerns do still exist,

however, and the project will continue to

work with stakeholders to address these.

Stakeholder engagement remains a priority

for WHHT and will continue throughout the

development of the OBC and FBC.

RISK REGISTER


169

ID Description Owner RAG Mitigation

R3 There is a risk that the required

investment may not be

available. This may lead to the

scope of implementation being

limited to meet an affordability

envelope, reducing the benefits

able to be achieved.

Don

Richards

A A range of potential commercial delivery

models, along with their financial

implications, have been considered. These

will be assessed in more detail at OBC stage

to ensure the optimum balance of

affordability versus value for money can be

achieved. A phased implementation will also

provide more flexibility, with options to

spread the investment over a longer

timeframe to improve affordability.

R4 There is a risk that WHHT’s

estate deteriorates further

before implementation can

begin, impacting upon on the

starting position for

redevelopment, and therefore

increase the cost, and

potentially increasing quality and

safety risks.

Tim

Duggleby

G WHHT has developed an interim estate

strategy which is aimed at ensuring WHHT is

able to continue delivering services safely

and meet demand in advance of the acute

transformation. This should ensure that the

estate does not deteriorate significantly from

its current state, but is only tenable in the

short term.

R5 There is a risk, due to

operational pressures, that

WHHT may not have access to

the necessary resources, in

terms of both capacity and

capability, to manage the acute

transformation. This could lead

to delays to implementation.

Helen

Brown

G The Management Case sets out the project

management resource required for the next

stage of the acute transformation, the

development of the OBC. WHHT will

supplement internal resource with specialist

external technical advice where required to

ensure it has the skills and experience

necessary to move to the next stage.


170

A&E Accident and Emergency

AAU Acute Admissions Unit

CAG Clinical Advisory Group

CCG Clinical Commissioning Group

CDEL Capital Departmental Expenditure Limit

CICU Coronary Intensive Care Unit

CIP Cost Improvement Programme

CLCH Central London Community Healthcare NHS Trust

COPD Chronic Obstructive Pulmonary Disease

CQC Care Quality Commission

CT Computed Tomography

DC Day Case

DCU Day Case Unit

DH Department of Health

EAC Equivalent Annual Cost

EAV Equivalent Annual Value

EL Elective

EPAU Early Pregnancy Assessment Unit

FM Facilities Management

FMOC Future Model of Care

GF Greenfield

GMP Guaranteed Maximum Price

GP General Practitioner

HBN Health Building Note

HCC Hertfordshire County Council

HCT Hertfordshire Community Trust

ABBREVIATIONS


171

HHH Hemel Hempstead Hospital

HMT Her Majesty’s Treasury

HTM Health Technical Memoranda

HVCCG Herts Valleys Clinical Commissioning Group

ICU Intensive Care Unit

ITPD Invitation to Participate in Dialogue

LCC Life Cycle Cost

LOS Length Of Stay

LTFM Long Term Financial Model

MIU Minor Injuries Unit

MRI Magnetic Resonance Imaging

NEL Non-Elective

NHS National Health Service

NHSE NHS England

NHSI NHS Improvement

OBC Outline Business Case

OJEU Official Journal of the European Union

ONS Office for National Statistics

OP Outpatient

OPD Outpatient Department

OPFA Outpatients first appointment

OPFU Outpatients follow up appointments

P22 Procure22

PCT Primary Care Trust

PDC Public Dividend Capital

PF2 Private Finance 2

PFI Private Finance Initiative

PIN Prior Information Notice

PMoK Princess Michael of Kent

POD Point of Delivery


172

PPP Public Private Partnership

PPQ Pre-Qualifying Questionnaire

PSCP Principal Supply Chain Partner

RDEL Resource Departmental Expenditure Limit

SACH St Albans City Hospital

SEP Strategic Estates Partnership

SME Small-to-Medium-sized Enterprise

SOC Strategic Outline Case

SPV Special Purpose Vehicle

SRO Senior Responsible Owner

STP Sustainability and Transformation Plan

TEC Trust Executive Committee

UCC Urgent Care Centre

VAT Value Added Tax

WACS Women’s and Children’s Services

WBC Watford Borough Council

WGH Watford General Hospital

WHHT West Hertfordshire Hospitals Trust

Documents

west hertfordshire hospitals trust acute transformation