Full Business Case - St Bernard's Hospital - New 80-Bed ... · Vivienne Mowatt, Barbara Byrne and Paul Meechan Technical review and Quality Assurance. Copy for publishing. Contact

Full Business Case - St Bernard's Hospital

New 80-Bed Male Medium Secure Unit13th March 2014

FBC - St Bernard's Hospital - MSU

Version 4.0 Page ii of 160

Document control sheet

Document Title Full Business Case - St Bernard's Hospital

New 80-Bed male Medium Secure Unit

Version 4.0 - APPROVED

Status Final – including amendments following DH/HMT Q&A process and new cashflow

Reference DH 491: St Bernard’s Redevelopment Project

Author Vickie Holcroft

Date 13th March 2014

Further copies from email: [email protected] quoting document title, reference and author

Document history Version Date Author Comments

1.0 13th August 2012

Tony Shaw First draft based on OBC – NB most S3.3, 3.4 & 3.6 summarised and “process” text moved to Appendices

1.1 7th September 2012

Tony Cloke

1.2 13-14th September

Tony Cloke Strategic Case

1.3 – 1.4

19th & 20th September

Tony Cloke/Viv Mowatt/Vickie Holcroft

Technical review of Strategic Case

1.5 21st September Tony Cloke/Viv Mowatt

Incorporating comments/suggestions from Under the Rainbow; Technical Review of Economic and Commercial Cases.

1.6 21st September Tony Cloke/Viv Mowatt/Vickie Holcroft

Further review of all sections

1.7-1.8 25th & 27th September

Tony Cloke Technical Review; Incorporating comments from Steering Group/Programme Board

mailto:[email protected]


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Document history 1.9 – 1.10

2nd – 5th & 8th October 2012

Tony Cloke/Lynda Atkins/ Capita/Viv Mowatt/

Technical Review Review of Commercial Case

1.11 – 1.12

12th & 16th October 2012


Technical Review Financial Case

1.13 – 1.14

17th - 19th October 2012

Tony Cloke/Viv Mowatt/Lynda Atkins/Marion Fiddes/Capita/Vickie Holcroft

Technical Review Executive Summary

2.0 22nd -23rd October 2012


Technical Review Version for Trust Board

3.0 23rd December 2012

Tony Cloke/Vickie Holcroft

Revised Financial Case

3.1 14th January 2013

Tony Shaw Restructure as BHR FBC

3.2 23rd January 2013

Tony Cloke Further restructure as BHR FBC

3.3 28th – 31st January 2013

Tony Cloke/Viv Mowatt

Technical Review including review of Financial Case

3.4 – 3.5

5th – 8th February 2013

Tony Cloke/Marion Fiddes/Vickie Holcroft

Technical Review of whole document, leading to copy for NHS London formal review

3.6 18th February 2013

Tony Cloke Amending per NHSL Q&A 13.02.13

3.7 20th February 2013

Tony Cloke/Marion Fiddes

Technical review of Financial Case – copy for NHS London

3.8 – 3.9

26th February - 6th March; 8th & 14th March 2013

Tony Cloke/ Viv Mowatt/Andy Weir

Technical Review of whole document, leading to final version for NHSL and DH.

3.10 13th June 2013 Tony Cloke Minor amendments to text following DH Q&A process; incorporating Trust-level mitigations in ‘downside case’.

3.11 2nd and 4th July, 28th - 29th November, 24th and 31st December

Tony Cloke Technical review - update where changed since March 2013; (e.g. commissioner arrangements, programme/project governance, programme dates, risk


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Document history 2013; 5th, 14th and 28th February; 6th and 11th March 2014

management and new cashflow)

4.0 12th & 13th March 2014

Vickie Holcroft, Vivienne Mowatt, Barbara Byrne and Paul Meechan

Technical review and Quality Assurance. Copy for publishing.

Contact details

Tony Cloke

01344 754220 07805 802039

[email protected] Kentigern House Broadmoor Hospital Berkshire RG45 7EG

mailto:[email protected]


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Contents

Foreword for St Bernard’s Male MSU FBC.................................................... 13 1 The Executive Summary..................................................................... 14 1.1 Introduction ................................................................................. 14 1.2 The Strategic Case ..................................................................... 15 1.3 The Economic Case.................................................................... 18 1.4 The Commercial Case ................................................................ 20 1.5 The Financial Case..................................................................... 23 1.6 The Management Case .............................................................. 29

2 Strategic Case .................................................................................... 35 2.1 Introduction ................................................................................. 35 2.2 The Development of the Full Business Case .............................. 35 2.3 Government Approvals ............................................................... 39 2.4 Organisational Overview............................................................. 40 2.5 Business Strategies .................................................................... 48 2.6 Other Organisational Strategies.................................................. 58 2.7 Investment Objectives................................................................. 60 2.8 Existing Arrangements................................................................ 63 2.9 Business Needs.......................................................................... 68 2.10 Potential Business Scope and Key Service Requirements ......... 68 2.11 Main Benefit Criteria ................................................................... 70 2.12 Main (Non-Financial) Risks......................................................... 71 2.13 Constraints.................................................................................. 73 2.14 Dependencies............................................................................. 73

3 The Economic Case............................................................................ 74 3.1 Introduction ................................................................................. 74 3.2 Development of Options ............................................................. 75 3.3 Economic Appraisal .................................................................... 76 3.4 Qualitative Benefits Appraisal ..................................................... 87 3.5 Monetisation of Benefits.............................................................. 89 3.6 Risk Appraisal............................................................................. 93 3.7 Preferred Option ......................................................................... 94

4 The Commercial Case ........................................................................ 96 4.1 Introduction ................................................................................. 96 4.2 Procurement Strategy................................................................. 96


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4.3 Required Services ...................................................................... 98 4.4 Agreed Risk Transfer ................................................................ 102 4.5 Agreed Charging Mechanism ................................................... 105 4.6 Agreed Contract Length............................................................ 106 4.7 Key Contractual Clauses .......................................................... 106 4.8 Personnel Implications (Including TUPE).................................. 106 4.9 Procurement Route and Implementation Timescales ............... 106 4.10 FRS 5 Accountancy Treatment................................................. 107

5 The Financial Case........................................................................... 108 5.1 Introduction ............................................................................... 108 5.2 Background............................................................................... 109 5.3 Capital Investment and Financing............................................. 109 5.4 Impact on Balance Sheet.......................................................... 114 5.5 Capital Charges Summary........................................................ 115 5.6 Income and Expenditure ........................................................... 117 5.7 Cost Improvement Programme................................................. 126 5.8 Downside Risk Assessment and Mitigation .............................. 132 5.9 Overall Trust Finances - Long Term Financial Model ............... 139 5.10 Overall Affordability................................................................... 140

6 The Management Case .................................................................... 141 6.1 Introduction ............................................................................... 141 6.2 Programme Management Arrangements.................................. 141 6.3 Project Management Arrangements ......................................... 145 6.4 Use of External Advisers........................................................... 149 6.5 Arrangements for Change Management................................... 151 6.6 Arrangements for Benefits Realisation...................................... 151 6.7 Arrangements for Risk Management ........................................ 152 6.8 Arrangements for Post Project Evaluation (PPE)...................... 155 6.9 Gateway Reviews ..................................................................... 156 6.10 Contingency Plans and Business Continuity............................. 157 6.11 Stakeholder Management......................................................... 158 6.12 Arrangements for Publication.................................................... 159


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Tables

Table (i): Evolution of Options from SOC Longlist to Revised OBC Shortlist. 18 Table (ii) - Capital and Revenue Comparisons for Preferred Option ............. 19 Table (iii) – OBC Economic Appraisal ........................................................... 20 Table (iv) – Risk Transfer Matrix.................................................................... 21 Table (v) - Implementation Timescale ........................................................... 22 Table (vi) – Capital Costs Breakdown ........................................................... 23 Table (vii) – Impact on Trust Balance Sheet for St Bernard’s Hospital site ... 24 Table (viii) - Capital Charges (Whole Site)..................................................... 25 Table (ix) – Total Income & Expenditure Account at FBC (male MSU - Nominal

Prices)................................................................................................. 26 Table (x) – Site-Wide Changes in addition to impact apportioned to male MSU I&E

(nominal prices) .................................................................................. 27 Table (xi) - Main (Non-Financial) Risks & Counter-measures........................ 31 Table (xii) – FBC Approvals Timetable .......................................................... 33 Table 1.– SOC Elements and Management Arrangements........................... 36 Table 2.– Government Approvals to Date ..................................................... 39 Table 3.– Anticipated OBC Approval Conditions ........................................... 40 Table 4.- Trust Financial Summary................................................................ 43 Table 5. – Foundation Trust Application Milestones ...................................... 57 Table 6. - GIA and %age of Listed/Non-listed buildings (St Bernard’s) ......... 58 Table 7. – Trust Backlog Maintenance Plan .................................................. 59 Table 8. – Key Deliverables........................................................................... 62 Table 9. – Male Medium Secure In-patient Beds by Ward (October 2012) ... 64 Table 10. – Income & Expenditure for Male MSU.......................................... 65 Table 11. – S&FS Male Medium Secure Bed Numbers to 2017.................... 66 Table 12. – Accommodation Brief.................................................................. 70 Table 13. – Investment Objectives and Benefits............................................ 71 Table 14. – Main (Non-Financial) Risks and Counter-Measures ................... 72 Table 15. - Evolution of Options: SOC Longlist to Revised OBC Shortlist ..... 76 Table 16. – Main Benefits .............................................................................. 77 Table 17. – Key Results of Economic Appraisal ............................................ 80 Table 18. - Comparison of Costs – OBC to FBC ........................................... 81 Table 19. – Issues requiring use of the Optimism Bias.................................. 82 Table 20. - GMP Summary by Elements ....................................................... 83


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Table 21. – MSU Project Capital Budget Requirement.................................. 84 Table 22. - Anticipated Costs Limits applying to DH Approval of OBC.......... 85 Table 23. - Capital and Revenue Comparisons for Preferred Option ............ 86 Table 24. – OBC – Additional Benefits Appraisal Results ............................. 87 Table 25. – OBC Economic Appraisal ........................................................... 89 Table 26. – Monetised Benefits and VfM Ratio at OBC................................. 92 Table 27. - Revised Monetised Benefits and VfM Ratio for Preferred Option 93 Table 28. – Risk Summary ............................................................................ 93 Table 29. – Summary of OBC Investment Appraisal ..................................... 94 Table 30. – Programme of AEDET workshops ............................................ 101 Table 31. – Risk Transfer Matrix.................................................................. 103 Table 32. – Category C Disposals ............................................................... 104 Table 33. - Capital and Revenue Comparisons for Preferred Option .......... 108 Table 34. - Capital Costs Breakdown .......................................................... 110 Table 35. –Capital Cash Flows at FBC – Sources and Applications ........... 111 Table 36. –Capital Cash Flows at OBC – Sources and Applications........... 111 Table 37. –Differences between FBC and OBC Capital Cash Flows .......... 112 Table 38. – Land Sales Receipts................................................................. 114 Table 39. – Impact on Trust Balance Sheet................................................. 115 Table 40. - Capital Charges – Whole Site ................................................... 116 Table 41. - Capital Charges – apportioned to new male MSU..................... 116 Table 42. – Savings to Male Medium Secure services in 2016/17 from the project

(2012/13 price base) ......................................................................... 117 Table 43. – Site-Wide Changes in addition to impact apportioned to male MSU I&E

(nominal prices) ................................................................................ 118 Table 44. – Summary of FBC I & E Account (2012/13 prices)..................... 120 Table 45. - Differences (male Medium Secure service) OBC to FBC (2012/13 price

base)................................................................................................. 122 Table 46. Transitional Costs (2012/13 price base) ...................................... 123 Table 46a: Additional Site-wide Cost Impacts ............................................ 124 Table 47. – Total Income & Expenditure Account at FBC (male MSU - Nominal

Prices)............................................................................................... 125 Table 48. – CIP savings achieved for last four Financial Years................... 127 Table 49. - Specialist & Forensic Services CSU CIPs (2012/13 Prices)...... 128 Table 50. – Male Medium Secure CIP savings (2012/13 Prices)................. 129 Table 51. – Male MSU Workforce Plan Summary ....................................... 132


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Table 52. – Sensitivity of Land Sale Proceeds ............................................ 134 Table 53. – Impact of Mitigations................................................................. 138 Table 54. – Key Project Milestones ............................................................. 149 Table 55. – External Advisers...................................................................... 150 Table 56. – Post Project Evaluation............................................................. 155 Figures

Figure (i) - Structure for Delivery of the MSU Project .................................... 30 Figure 1 – Aerial View of St Bernard’s Hospital Site...................................... 46 Figure 2 –Preferred Option within Development Control Plan Site ................ 74 Figure 3 – Governance of the MSU Project ................................................. 142 Figure 4 - Programme Team Structure........................................................ 146 Figure 5 – Online Risk Alert......................................................................... 154


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Appendices

Introduction

A1 Project Initiation Document v1.2 – September 2012

A2 Letter of Commissioner Support – OBC

A3 Letter of Commissioner Support – FBC

A3a Letter from NHS England – 26th June 2013

A4 Trust Board Minute from 31st October 2012

A5 Trust Board Minute from 27th February 2013

Strategic Case

A6 Decision letter – MSU planning application

A7 Decision letter – Listed Building Consent

A8 Planning Conditions Tracker

A9 SOC – letter of DH approval

A10 OBC – letter of DH approval

B1 Development Control Plan

B2 Site Plan

B3 Quality Strategy 2013 – 2018 (March 2013)

B3a Quality & Cost Improvement Strategy (May 2013)

B4 Trust Recovery Strategy

B5 Trust Estate Strategy – Update July 2012

B6 Trust Catering Strategy

B7 St Bernard’s Hospital Travel Plan

B8 Revised Clinical Service Model

B9 Schedule of Accommodation

B10 Design Brief


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Economic Case

C1 Description of Options – SOC longlist to OBC shortlist

C2 GMP Breakdown

C3 Monetisation Calculations

C4 Economic Appraisal from OBC

Commercial Case

D1 E-mail from Private Finance Unit

D2 Procurement Workshop – May 2011

D3 Procurement Strategy

D4 Equipment Strategy – October 2012

D5 Costed Equipment Schedule

D6 Drawings

D7 Letter from Fire Consultant

D8 Schedules of Accommodation

D9 Schedule of Compliance

D10 Statement from Trust’s Infection Control Lead

D11 AEDET Evaluation Workshop Report – September 2012

D12 FB Forms

Financial Case

E1 Use of Optimism Bias

E2 Finance Spreadsheets

E3 Costed Risk Register

E4 Savills Report – June 2012

E5 Savills Report – September 2012

E6 BNP Paribas report re Broadmoor Land Sales


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E7 Planned Disposal Dates

E7A Land Sales - Timelines with Key Milestones

E8 S&FS CSU CIP Project Implementation Plans (PIPs)

E9 Corporate CIP PIPs

E10 Male MSU Service Line Workforce & Cost Improvement Plan

E11 Financial Downside Risk Assessment

E12 Long Term Financial Model (LTFM)

E13 Integrated Business Plan (IBP)

Management Case

F1 Notes from Men’s Directorate Service User Forum – August 2012

F2 Pen Pictures

F3 Construction Programme – January 2014

F4 Transitional Plan – September 2012

F5 Benefits Realisation Plan – September 2012

F6 Trust Risk Management Policy

F7 Project Risk Register

F8 Post Project Evaluation Arrangements

F9 Project Profile Model

F10 DH491 Gates 1 & 2 Report – March 2012

F11 Gates 1 & 2 Action Plan Update - September 2012

F12 DH491 Gate 3 Report – October 2012

F13 Trust Business Continuity Plan – June 2012

F14 Statement of Community Involvement – September 2012

F15 Communications Strategy and Plan (February 2014)


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Foreword for St Bernard’s Male MSU FBC I am delighted to publish the full business case for the new male Medium Secure campus at St Bernard’s Hospital in Ealing, which has received Government approval and, consequently, funding. The approval of this business case - and the one for the new Broadmoor High Secure Hospital at the Trust’s other site in Crowthorne, Berkshire - secures the immediate future of the West London Mental Health NHS Trust and forms a major part of the Trust’s Integrated Business Plan for the future as an aspirant Foundation Trust.

This version of the full business case (FBC) has been updated from the version which was finalised and submitted to the Department of Health (DH) in March 2013.

The former Strategic Health Authority, NHS London, ceased to exist on 31st March 2013, and its functions were replaced by two bodies: The NHS Trust Development Authority (in relation to oversight and performance management of the Trust) and NHS England (London Region) as the new national commissioner of secure services.

In June 2013, NHS England recommended the FBC to DH for approval, and in July 2013, the TDA cleared the conditions which had been attached to the initial recommendation of the FBC by NHS London.

On 17th December 2013, DH approved the FBC on the basis of a capital sum which included the ‘Guaranteed Maximum Price’ from October 2012 plus an amount for costs directly attributable to the delay in approving the FBC (beyond the original anticipated date of 24th May 2013).

The FBC is necessarily a ‘snapshot’ in time and cannot be updated every time an assumption changes. This version of the FBC reflects the new commissioning arrangements and new cashflow based on the contractor’s revised programme - on which the Government approval was based.

Barbara Byrne

Senior Responsible Owner, St Bernard’s Male MSU Project

and Deputy Chief Executive & Director of Finance



1 The Executive Summary

1.1 Introduction

1.1.1 West London Mental Health NHS Trust has produced this Full Business Case (FBC) for the redevelopment of the St Bernard’s Hospital site in Ealing in order to provide significantly improved Medium Secure in-patient accommodation within the Specialist & Forensic Services Clinical Service Unit (S&FS CSU).

1.1.2 The proposed new Medium Secure Unit (MSU) will mean that male patients in medium secure care who are currently being treated in buildings which cannot meet the minimum required national standards and specification for medium secure services will in future be treated in modern, therapeutic environments that facilitate recovery, as is currently the case with female Medium Secure patients.

1.1.3 The total capital cost including inflation and VAT is £60.524m. In addition to land sales income of £23.0m (£15m from St Bernard’s and £8m from Broadmoor), the Trust will require a total of £37.5m. Of this, £15.4m will be funded through Trust capital and £22.1m through public loan funding which is reflected in the Trust’s Long Term Financial Model (LTFM).

1.1.4 This project is a key component of the Trust’s vision and business plan and is included in the Trust’s application for Foundation Trust (FT) status to be submitted in 2015.

1.1.5 The Trust has prepared this FBC in the 5 case model and in accordance with the guidance contained in Capital Investment Manual as well as HM Treasury’s Green Book. In reaching this stage, the Trust has worked closely with Commissioners, NHS London and the Department of Health (DH).

1.1.6 The FBC is based on the provision of a single medium secure campus of 131 beds for male patients: 51 beds will be in the existing Regional Secure Unit – not part of this business case – and a further 80 beds provided in a new purpose-built male Medium Secure Unit (the subject of this business case).

1.1.7 This FBC is focused on:

■ Confirming the project development programme and its deliverability;

■ Updating and confirming the costs and affordability of the project and risk management arrangements;



■ Reconfirming the benefits deriving from the project, including an updated and validated Benefits Realisation Plan; and

■ Providing detailed Cost Improvement Programme savings (CIPs) and associated Workforce Plan to support the efficiency savings which will be delivered through this project.

1.2 The Strategic Case The Strategic Context

1.2.1 Although the Strategic Outline Case (SOC) concerned a number of individual changes on the St Bernard’s site, this is the first to reach FBC stage.

1.2.2 This development sits within an overall Development Control Plan (DCP) for the St Bernard’s site, and land sales assumed in the DCP are included within this case, in so far as they are relevant to the delivery of the MSU project. There have been no significant changes to the services affected by this FBC since the approval of the OBC.

1.2.3 West London Forensic Service provides a comprehensive multi-disciplinary assessment, treatment and rehabilitation service for male and female mentally disordered offenders, as well as those with challenging behaviour and specialist rehabilitation needs, for North West London and beyond. The provision includes a number of national / cross-regional specialist services.

1.2.4 The total value of the Trust’s SLA with commissioners of male Medium Secure services was £20.6m for 2012/13, representing 9% of the Trust’s income.

National Guidance

1.2.5 There is a range of national guidance and strategy documents relevant to these services. In particular, there is now a national specification for medium secure services, which providers must comply with, supported by a set of national minimum standards. Other key guidance includes ‘No health without mental health: a cross-government mental health outcomes strategy for people of all ages’ (DH 2011) which sets out six shared high level mental health objectives and the associated document, ‘Delivering better mental health outcomes for people of all ages’ (DH 2011), which sets out how the Government intends to implement the strategies contained in these documents. All relevant guidance has been followed in the preparation of this FBC.



Trust Strategy

1.2.6 The Trust’s Vision for the Future is to be a leading provider of ‘excellent’ mental health services which promote recovery and this development supports that vision. In mental health, the term recovery is frequently used to describe the personal lived experience and journeys that people go through as they work towards living meaningful and satisfying lives. West London Mental Health NHS Trust is committed to delivering recovery focussed care throughout all its services.

1.2.7 The Trust’s aim is to deliver services from quality buildings that are fit for purpose, sustainable, flexible, well-maintained and meet patient, public and staff needs and expectations.

The Case for Change

1.2.8 The investment objectives for this project were reviewed and set out in the OBC and remain valid. They are:

■ To support services in the delivery of improved patient care and health outcomes

■ To ensure all patients requiring medium security are accommodated in buildings that meet the required standards for medium secure care

■ To provide improved accommodation for the Medium Secure forensic services currently in the Tony Hillis Wing and associated buildings

■ To meet commissioner requirements for service quality

■ To ensure any re-provided accommodation is affordable to the Trust and the commissioners

■ To ensure Trust properties are utilised in the best way by a reduction in backlog maintenance and energy costs, providing value for money, and achieving upper quartile performance in utilisation of available accommodation

■ To provide a modern, safe, sound and secure environment for the protection of patients, staff, visitors and the public.

1.2.9 Each of the project objectives has been formulated based upon the drivers for change and national, regional and Trust strategic direction outlined later in this business case.



Drivers for Change

1.2.10 The Clinical Service Model (CSM) provides the foundation of the Low Secure and Medium Secure services provided by S&FS CSU.

1.2.11 The CSM consists of two main strands:

■ Integrated patient-focused care delivered across coherent and defined pathways

■ The use of the ward as a therapeutic milieu

1.2.12 The first, an integrated patient-focused care, includes medical, psychological, social care, education and life skills development which are all essential and must be coordinated and combined in care planning that tackles the needs and risks of each patient. Integration of all three security domains - physical, procedural and relational - will be fully integrated with clinical care and enhance the opportunities available to Service Users.

1.2.13 The second, a therapeutic ward milieu will be facilitated through the presence and coherence of the ward multidisciplinary team (MDT) and clear programmes of clinical activities. This is greatly supported by the provision of an MDT clinical office on the wards in the new MSU.

1.2.14 The major constraint to the delivery of this new Clinical Service Model is the existing hospital estate which is unsuitable and poorly configured. Redevelopment of the site will allow the full implementation of the Clinical Service Model and creates an opportunity to modernise patient care and ensure the Trust continues to be the provider of choice.

1.2.15 There are three key drivers for change and these are set out below:

■ Reconfiguration of current services

■ Functional suitability and condition of existing estate

■ More efficient use of resources.

1.2.16 It is critical that these three key issues are addressed in order for the Trust to continue to be the provider of choice.



1.3 The Economic Case OBC Longlist and Shortlist

1.3.1 Table (i) below shows the development of options from the SOC longlist to the OBC to the revised OBC shortlist.

Table (i): Evolution of Options from SOC Longlist to Revised OBC Shortlist

1.3.2 The Trust has reviewed the 5 options shortlisted and evaluated at the OBC stage and confirms that the OBC preferred option i.e. Option 3 - Build new 80-bed Medium Secure Unit (MSU) on the site of the John Conolly Wing (JCW) - remains the preferred option at the FBC stage.

Capital and Revenue Costs

1.3.3 Table (ii) below sets out the capital and revenue costs for the preferred option from OBC to FBC.



Table (ii) - Capital and Revenue Comparisons for Preferred Option

Preferred Option OBC Final FBC at 12/13 prices Final FBC at

nominal prices

Capital Cost @ MIPS 480/PUBSEC 173 (including non recoverable VAT) (£m)

£60.8m £60.5m £60.5m

Revenue Cost 2016/17 £22.2m £20.0m £21.8m

Revenue Cost 2012/13 to 2016/17 £106.6m £96.9m £100.8m

Net Revenue Position (surplus) 2016/17 £0.2m

Revenue Price base 2012/13 2012/13 Nominal

Cost and Content Reconciliation – OBC to FBC

1.3.4 The capital cost for approval purposes (excluding optimism bias, VAT and forecast inflation) has increased from £49.168m to £52.762m from OBC to this FBC, an increase of 7.3%. When optimism bias, VAT and forecast inflation at each stage is included the capital cost has decreased from £60.771m to £60.524m from OBC to this FBC, a decrease of 0.4% Both these figures fall within the 10% threshold as set out in the Capital Investment Manual. As the capital cost included in the economic analysis is inclusive of optimism bias the capital threshold requiring a full review of the economic case has not been breached.

1.3.5 Comparing revenue costs between the OBC and this FBC in 2016/17, the first full year of settled revenue costs after the completion of the full redevelopment and subsequent land sales, the revenue cost has decreased from £22.2m to £20.0m, a decrease of 9.9%. A comparison of the cumulative revenue costs for the period 2012/13 to 2016/17 shows a reduction of 9.1%., (£106.6m to £96.9m). Therefore, the revenue cost threshold requiring a full review of the economic case has not been breached.

1.3.6 The capital cost of the redevelopment has reduced by £0.3m as a result of further development of the design and programme, and also to account differently for inflation. The reduction would have been larger but the final figure includes costs resulting directly from the delay in approval of the FBC. The cost parameters of the GMP are still within the OBC capital limit.



OBC Economic Appraisal

1.3.7 Table (iii) below summarises the OBC economic appraisal and demonstrates that the OBC Option 3 has both a lower risk adjusted EAC and a significantly lower risk adjusted EAC per benefit point than the other options in the OBC. This position has not changed during the development of this FBC.

Table (iii) – OBC Economic Appraisal

Economic Appraisal Option 0 Option 1 Option 2 Option 3 Option 4

Equivalent Annual Cost (EAC), £k

27,845 27,775 28,496 26,924 28,440

EAC of Risk Adjustment, £k

120 93 170 114 181

Risk Adjustment, £k 27,965 27,868 28,666 27,038 28,621

Benefits Appraisal Weighted Score

275 500 525 885 695

Ratio of risk adjusted EAC (£k) to benefits points

101.7:1 55.7:1 54.6:1 30.6:1 41.2:1

Ranking 5 4 3 1 2

Overall Findings: The Preferred Option

1.3.8 There are no material changes from the OBC and the preferred option (Option 3) continues to be the preferred option. It has:

■ A higher weighted benefits score; ■ A lower capital cost; and ■ A lower revenue cost.

1.4 The Commercial Case Required services

1.4.1 The preferred option consists of construction of a new 80-bed Medium Secure Unit under a P21 procurement.



1.4.2 There are 3 categories of works, described as Categories A, B and C works. Category A works are enabling works and were relevant to only two options, Option 2 and Option 4. They are not relevant to the preferred option (Option 3), thus they are not considered further in this FBC.

■ Category B works involve the activity necessary to construct an 80-bed medium secure unit within a secure campus perimeter, the preferred option in this case.

■ Category C works involve the relocation of some non-clinical functions currently within the St Bernard’s site, so that areas of the site can be sold.

1.4.3 Category B works will be procured under a Procure 21 (P21) Project, for which Kier Construction Limited has been identified as the Principal Supply Chain Partner (PSCP), while Category C works will proceed under existing minor works or NEC3 arrangements.

1.4.4 Design documents, including 1:200 scale building plans, 1:50 scale (loaded) plans of key rooms and elevations have been produced. These comply with relevant NHS guidance and technical standards including Firecode.

Risk transfer

1.4.5 The general principle is that risks are passed to ‘the party best able to manage them’, subject to value for money.

1.4.6 The Trust has concluded that it will apportion service risks in the design, build and operational phases as shown in the Table (iv) below.

Table (iv) – Risk Transfer Matrix

Risk Category Potential Allocation

Public Private Shared

1. Design Risk

2. Construction and Development risk

3.Transition and Implementation risk

4. Availability and performance risk

5. Operating risk

6. Variability of revenue risks



Risk Category Potential Allocation

Public Private Shared

7. Termination risks

8. Technology and obsolescence risks

9. Control risks

10. Residual value risks

11. Financing risks

12. Legislative risks

13. Other project risks

Construction Implementation Timescales

1.4.7 Assuming planned approval dates are achieved, the construction implementation timescales are shown in Table (v) below:

Table (v) - Implementation Timescale

Stage FBC Dates 0BC Dates

FBC Approval December 2013 October 2012 – March 2013

Main Construction April 2014 – November 2015

June 2013 – March 2015

Commissioning & Patient Transfer

January 2016 April 2015

1.4.8 The FBC approval date in the March 2013 FBC was 2 months later than programmed at OBC stage to allow more time for approval given the Trust’s decision not to move local services inpatient services out of the John Conolly Wing until March 2013. However, that delay has been compounded by changes in the NHS structure, the Trust’s FT application process and a DH review of capital commitments – all of which has added a further seven months to the FBC approval process.



1.4.9 In March 2013 it was possible that the transfer of patients could still occur in April 2015, which was enabled by rescheduling some of the external works until after the handover of the new MSU. However, the delay referred to in the paragraph above means that the move of patients out of the Tony Hillis Wing will now happen in January 2016.

Accountancy Treatment

Category B Works

1.4.10 It is envisaged that the assets underpinning delivery of the service will be on the balance sheet of the Trust.

Category C Works

1.4.11 The assets underpinning delivery of the service will be on the Trust’s balance sheet until they are sold, when they will be removed

1.5 The Financial Case Capital and Revenue Comparisons for Preferred Option

1.5.1 The capital and revenue comparisons for the preferred option are shown in Table (ii) above.

Capital Costs

1.5.2 A breakdown of the capital cost is shown in Table (vi) below.

Table (vi) – Capital Costs Breakdown

Total£

Construction 35,937,326Trust Fees and Non‐works costs 4,320,605PSCP Fees and Non‐works 9,632,076Equipment 1,070,000Planning Contingency 1,802,500Sub‐total 52,762,507Optimism Bias 0Inflation 0Capital Costs excl VAT 52,762,507VAT 7,761,966Total Capital Cost 60,524,473

Type of Expenditure



Summary of Financial Appraisal

1.5.3 Table (vii) below is an assessment of the impact of the project on the Trust’s balance sheet and Table (viii) shows the consequent impact on capital charges.

Table (vii) – Impact on Trust Balance Sheet for St Bernard’s Hospital site

Balance Sheet Option 3 (whole site) Pre 2011 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 £ £ £ £ £ £ £ £ £ £ £ £

Fixed assets at 31.3.11 (St Bernards whole site) 132,570,097 133,665,993 135,503,589 113,565,999 118,281,679 117,790,057 115,032,147 112,175,417 109,319,362 106,556,944 103,856,171Impairment on land sales 0 0 ‐12,000,000 ‐3,000,000 Impairment NBV reduction (revaluation reserve) 0 0 ‐17,207,512 ‐9,856,251 Impairment on new building coming into use (DV likely revaluation) ‐18,157,342 Depreciation ‐2,950,971 ‐2,810,405 ‐2,387,282 ‐2,143,694 ‐1,621,938 ‐2,857,910 ‐2,856,729 ‐2,856,055 ‐2,762,418 ‐2,713,712 ‐2,667,223 Life cycle re new project 0 0 0 0 0 0 0 0 0 12,938 35,111Actual spend on Redevelopment 3,069,118 4,046,867 4,648,000 9,657,204 19,715,625 19,287,658 100,000 0 0 0 0 0Closing Fixed Assets 133,665,993 135,503,589 113,565,999 118,281,679 117,790,057 115,032,147 112,175,417 109,319,362 106,556,944 103,856,171 101,224,059

Loan movements:Opening Loan 0 0 ‐8,067,583 ‐21,557,987 ‐20,673,787 ‐19,789,587 ‐18,905,387 ‐18,021,187 ‐17,136,987 Additions 0 ‐8,149,074 ‐13,955,926 Repayments 0 81,491 465,522 884,200 884,200 884,200 884,200 884,200 884,200Closing Loan 0 ‐8,067,583 ‐21,557,987 ‐20,673,787 ‐19,789,587 ‐18,905,387 ‐18,021,187 ‐17,136,987 ‐16,252,787

PDC Dividend 4,659,132 4,710,468 4,358,718 3,916,152 3,612,808 3,335,333 3,268,023 3,198,997 3,131,620 3,066,961 3,004,583

1.5.4 In addition to an increase due to the new project the Trust will also benefit from impairments for buildings demolished (writing down the value of the buildings in the accounts) and land sold and this is detailed in the table below.



Table (viii) - Capital Charges (Whole Site)

Capital Charge Summary Option 3 (whole site) Pre 2011 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 £ £ £ £ £ £ £ £ £ £ £

Current Depreciation 2,950,971 2,770,453 2,734,582 2,734,581 2,734,581 2,695,493 2,694,312 2,693,637 2,600,000 2,550,000 2,500,000New depreciation 0 39,952 111,627 143,350 218,350 1,493,411 1,493,411 1,493,411 1,493,411 1,493,411 1,493,411Life‐cycle depreciation 0 0 0 0 0 0 0 0 0 1,294 4,805Impairment depreciation/ 0 0 0 0 ‐373,457 ‐373,457 ‐373,457 ‐373,457 ‐373,457 ‐373,457 ‐373,457 Disposal depreciation 0 0 ‐458,928 ‐734,237 ‐957,536 ‐957,536 ‐957,536 ‐957,536 ‐957,536 ‐957,536 ‐957,536

Total Depreciation 2,950,971 2,810,405 2,387,282 2,143,694 1,621,938 2,857,910 2,856,729 2,856,055 2,762,418 2,713,712 2,667,223Total RoR 4,659,132 4,710,468 4,358,718 3,916,152 3,612,808 3,335,333 3,268,023 3,198,997 3,131,620 3,066,961 3,004,583Interest on loan 0 81,491 459,003 853,477 818,109 782,741 747,373 712,005 676,637

Total Capital Charge 7,610,102 7,520,872 6,745,999 6,141,337 5,693,749 7,046,720 6,942,862 6,837,793 6,641,412 6,492,678 6,348,443

Income and Expenditure

1.5.5 Table (ix) below shows the I&E account (at nominal prices) for the period from 2012/13 to 2016/17 (the first full year of settled revenue costs after the completion of the full redevelopment and subsequent land sales).



Table (ix) – Total Income & Expenditure Account at FBC (male MSU - Nominal Prices)

2012/13 2013/14 2014/15 2015/16 2016/17Income

Opening Recurrent 20,089 20,089 19,853 19,366 19,231

Tariff deflator -362 -357 -136 -135 Additional beds - 15 wef 1.4.16 2,395Other changes 126 -129 Closing Recurrent 20,089 19,853 19,366 19,231 21,491

Non-rec CQUIN 499 496 484 481 537Total Income 20,587 20,350 19,851 19,712 22,028

Expenditure

Operational 17,568Estates & Facilities 1,107Sub‐total 18,674 18,674

Annual inflation Y1 504CIP 13/14 Prices Y1 -793 Sub‐total 18,385 18,385

Annual inflation Y2 460CIP 14/15 Prices Y2 -1,011

Sub‐total 17,833 17,833

Additional beds expenditure 0

Annual inflation Y3 446CIP (Project Savings) 15/16 Prices Y3 -642 Sub‐total 17,637 17,637

Additional beds expenditure 1,211

Annual inflation Y4 441CIP 16/17 Prices Y4 - target -738 Sub‐total 18,551

Capital charges:

Existing 1,327 1,281 1,236 1,193 1,151New 370 277 321 314 2,103

Sub‐total 1,698 1,558 1,557 1,507 3,254

Non-rec transitional 51 47 60

Total Expenditure 20,372 19,994 19,437 19,204 21,804

Net Surplus/deficit 215 355 413 507 224

Net Surplus % (medium secure) 1.0% 1.7% 2.1% 2.6% 1.0%



1.5.6 In addition to the fact that the Male MSU project is viable, including the cost of additional capital charges, other site wide savings (excluding those for the Male MSU) which are the result of site rationalisation and land sales, are demonstrated at the end of the I & E table. Site-wide capital charges savings for the years 2013/14 to 2016/17 are £2.03m and Estates & Facilities savings are £0.56m, making a total of £2.59m across these years. The Estates & Facilities savings reflect the demolitions and sales on the site and, in particular, the demolition of the John Conolly Wing and the subsequent construction period of the new male MSU.

Table (x) – Site-Wide Changes in addition to impact apportioned to male MSU I&E (nominal prices)

2012/13 2013/14 2014/15 2015/16 2016/17 TotalCapital Charges 5,823 5,188 4,584 4,187 3,793

Year on year changes -635 -604 -397 -393 -2,030

Estates and Facilities 5,740 4,217 4,134 5,276 5,147

Year on year changes at 2012/13 price base -1,523 -82 1,142 -130 Year on year changes at nominal price base -1,564 -87 1,232 -143 -562

Total Change at nominal price base -2,200 -690 835 -537 -2,593



Cost Improvement Programme (CIP)

1.5.7 The Trust has a number of well-developed CIP plans for the current and future years - and the Specialist & Forensic Services CSU, and the Trust as a whole, has met its CIP savings targets for the last three years.

Downside Risks and Mitigations

1.5.8 The Trust has considered the potential financial downside risks and impacts which have also been discussed with Commissioners. The main risks are shown immediately below:

■ Land Sales (shortfall leading to higher loan requirement) ■ Increased Loan Interest Charges ■ Under-achievement of CIP Savings ■ Higher Capital Cost ■ Impairments

1.5.9 The principle agreed is that where a risk cannot be influenced by either party, for example as a consequence of policy changes or increases in rates of interest, then the risk will be shared between Commissioners and the Trust in a ratio of 50:50, with Commissioners providing additional income for their share. An exception to this rule is impairments where the risk is shared 75:25.

1.5.10 The Trust’s share of the downside risks adds up to a total of £373,000 (see Appendix E11).

1.5.11 The Trust’s exposure to a potential £373,000 downside risk can be mitigated by a combination of reducing or postponing spending within the male Medium Secure service, the Specialist & Forensic Services Clinical Service Unit or the Trust as a whole – or a combination of any two or all three.

Overall Affordability and Balance Sheet Treatment

1.5.12 The project to deliver the preferred option (Option 3) is affordable to the Trust in both capital and revenue terms with the support of the commissioners, provided the Trust delivers the identified CIPs as outlined in the FBC, in both the base case and in a downside scenario.



1.6 The Management Case Project Management Arrangements

1.6.1 The scheme is the key element of the site Redevelopment Programme, which includes this project and a range of others which were identified in the SOC, of which this is the first to reach FBC stage.

1.6.2 The Trust Board has decided that the Chief Executive should continue with his SRO role for the Broadmoor project, and the Deputy Chief Executive has now assumed the SRO role for this project.

1.6.3 The programme governance structure is shown in the figure below:



Figure (i) - Structure for Delivery of the MSU Project



Benefits Realisation and Risk Management

1.6.4 The delivery of benefits will be managed through the Programme Board and the Benefits Realisation Plan (BRP). This sets out who is responsible for the delivery of specific benefits, when they will be delivered and how achievement of them will be measured.

1.6.5 The BRP provides the means by which the Trust will ensure that the potential benefits arising from the construction of a new MSU are realised and will demonstrate that the investment has been worthwhile to key stakeholders. It has been approved by the Steering Group and Programme Board.

1.6.6 A detailed project risk register has been developed. This details who is responsible for the management of risks and the required counter measures within this project, and is a section of the Trust Risk Register.

1.6.7 The key risks to the delivery of the project, along with relevant counter measures are shown in Table (xi) below:

Table (xi) - Main (Non-Financial) Risks & Counter-measures

Risk Risk Score

Mitigation Score After

Mitigation

Project requires a number of transitions / patient moves which increase risk of incidents related to security or general disturbance

16 Phasing and transition plans will be developed jointly between project, clinical / operational and security teams. Service has previous history of managing high risk transitions well using established methodology. Communication will be in place with clinical teams to ensure

12

1 The Trust is committed to ensuring an holistic, service led approach to the delivery of both major capital schemes and is clear that the learning from Broadmoor will be shared for the St Bernard’s scheme (and vice versa). The Broadmoor and St Bernard’s programmes are, from a design perspective, relatively ‘in synch’ and routinely, similar issues arise on both schemes within a short period of each other; the learning from one then informs the other.

One of the major benefits, already realised, from having a Trust wide Redevelopment Team is the common approach to full stakeholder engagement across the whole range of issues. A further example was the learning from the Broadmoor AEDET process which was transferred to the St Bernard’s scheme.



Risk Risk Score

Mitigation Score After

Mitigation

individualised risk assessments and plans in place.

The single team across both projects (Broadmoor and St Bernard’s) will ensure consistency and shared learning. 1 Senior members of the Redevelopment Team have successfully delivered previous major projects within the Trust - see Management Case (Appendix F2).

Need to maintain continuation of current medium secure services in vicinity of significant works / build project (including during transition into new building) provides potential risk relating to security and safety

16 Clear phasing and commissioning plans to be developed; work required with clinical security department and service managers to ensure potential risks are identified, assessed and addressed. To be monitored via Security Committee

12

Post Project Evaluation Arrangements

1.6.8 Outline arrangements for post implementation review (PIR) and project evaluation review (PER) have been established in accordance with best practice.

1.6.9 Gateway Review for Gate 3 (Investment Decision) took place over the period 9th to 11th October 2012. The delivery confidence assessment was GREEN. Further details are set out at section 6.9.

Full Business Case Process

1.6.10 As part of the process of developing this FBC, the original Project Initiation Document (PID) has been updated and was then approved by the St Bernard’s Redevelopment Programme Board. The PID sets out the:



■ Project purpose and objectives

■ Project deliverables

■ Project structure , group membership and management arrangements

■ Project controls and communication

1.6.11 A copy of the revised PID is included at Appendix A1.

1.6.12 The timetable for approval of this FBC is shown in the Table (xii) below.

Table (xii) – FBC Approvals Timetable

Activity Approval

MSU Steering Group September 2012

St Bernard’s Redevelopment Programme Board September 2012

Trust Board October 2012 and February 2013

NHS London March 2013

NHS England June 2013

NTDA July 2013

Department of Health/HM Treasury December 2013

Commissioner Support

1.6.13 Commissioners’ supported the redevelopment at the OBC stage (Appendix A2) and have continued to express support for the project during the development of this FBC.

1.6.14 Confirmation of commissioners’ continuing support is set out at Appendix A3 to this FBC; Appendix A3a is a letter of confirmation from NHS England (new commissioners from 1st April 2013) of their support for this FBC.

Trust Board Approvals

1.6.15 Confirmation from the minutes of the meeting on 31st October 2012 approving the original FBC is attached at Appendix A4. Confirmation from the minutes of the meeting on 27th February 2013 approving this revised FBC is attached at Appendix A5.



Recommendation

1.6.16 This Full Business Case clearly demonstrates the continued robustness of the preferred Option (Option 3) and its affordability. The preferred option supports the delivery of the most effective care for medium secure patients in compliant accommodation, and also provides the greatest Value for Money and the widest range of benefits.

1.6.17 The Trust Board has approved this revised FBC for submission to NHS London and the Department of Health, seeking formal approval of this FBC in order that the Trust can proceed to the next stage.

Signed: Date: Barbara Byrne Senior Responsible Owner, St Bernard’s male MSU Project and Deputy Chief Executive & Director of Finance



2 Strategic Case

2.1 Introduction

2.1.1 This section describes the national and local strategic context within which this scheme should be considered. It outlines:

■ The current commissioning structure and provides an overview of the Trust

■ The national policies and guidance relevant to Medium Secure Services

■ Local strategies, policies and estates issues.

2.2 The Development of the Full Business Case

2.2.1 This FBC is the final stage of a long and complex approval process, and this is described below:

2.2.2 The Strategic Outline Case (SOC) for this development was approved by NHS London in July 2010. The SOC concerned a number of projects, of which this is the first to reach FBC stage; other cases will be brought forward in due course (see Table 1 below).

2.2.3 The OBC was submitted to NHS London in June 2012; it was approved in August 2012 for submission to Department of Health. DH approval was concurrent with FBC approval in December 2013.

2.2.4 Within the Strategic Outline Case a number of individual changes on the St Bernard’s site were planned. This FBC is concerned with the Forensic Male Medium Secure services provided by the Trust and considers only those changes relevant to the provision of a new MSU.

2.2.5 Some works will be carried out as part of the Trust’s operational estate management, while others will be the subject of future business cases.



Table 1.– SOC Elements and Management Arrangements

Clinical Services:

Male Medium Secure services including therapies and multi–disciplinary clinical offices

This FBC

(Category B Works)

Male Low Secure services including therapies and multi-disciplinary offices

Future OBC

Specialist Rehabilitation unit Operational capital

Forensic Adolescent Service No change

Women’s Low Secure Service No change

Clinical Support Services (Open Access):

Provision of primary health care for inpatients

Medium secure - This FBC

(Category B Works)

Low secure and Local Services – Future OBC

Provision for education of patients with learning difficulties

No change

Some provision for outpatients and support in the community

Operational capital

Vocational therapies / workshops Operational capital

Sports and horticultural therapy Accommodation

Operational capital

Café–on-the-Hill Operational capital

DASS (Drug and Alcohol Support Service)

Operational capital



Non – Clinical Services:

Trust headquarters/non-clinical administration offices

This FBC

(Category C Works)

Regional training offices, post–graduate educational facilities, Prevention and Management of Violence and Aggression (PMVA)

This FBC

(Category C Works)

Shared pharmaceutical services with Broadmoor

Already implemented

FM facilities/ catering 2, waste management, laundry 3

Medium secure - This FBC

(Category B Works)

Low secure and Local Services – Future OBC

2.2.6 This development sits within an overall Development Control Plan (DCP) for the St Bernard’s site which is shown at Appendix B1. The land sales assumed in the DCP are included within this case, in so far as they are relevant to the delivery of the MSU project. There have been no significant changes to the services affected by this FBC since the submission of the OBC.

Planning Approval

2.2.7 Full planning permission and Listed Building consent was approved at the London Borough of Ealing (LBE) planning committee meeting in April 2012, and the listed building consent and planning permission decision notices were issued in April and May 2012 respectively (Appendices A6 and A7).

2 The Trust is aspiring to a future strategy to provide fresh cook catering to all patients on the St Bernard’s site. The plan is to implement this incrementally –

beginning with medium secure services by the incorporation of a fresh cook kitchen in the MSU.

3 There is currently a central stores and Estates staff base facility, together with waste management compound and laundry sorting area. These will be displaced and decentralised as the various elements of the site redevelopment take place and relocated with each service area which is why the Trust has indicated that for the MSU service this is included in this FBC and for the future developments of the new Low Secure unit and the long term local services inpatient unit this element will be included in the associated future business cases.



2.2.8 The Trust has entered into an agreement with LBE under the provisions of section 106 of the Town and Country Planning Act 1990 (as amended) and other relevant Acts, in respect of a Local Labour Scheme (no further cost to the Trust anticipated) and payment of LBE’s reasonable legal and other professional costs up to an agreed limit of £2,500.

2.2.9 The Trust is currently in the process of clearing the pre-commencement conditions with LBE. A list of the conditions showing what has been done, and is yet to be done, is attached Appendix A8.

Full Business Case Process

2.2.10 This FBC was developed by reviewing the content of the OBC; in particular:

■ Reviewing the PID (see paragraph 2.2.11 below)

■ Reviewing the investment objectives, drivers for change and current activity / capacity (including clinical evidence)

■ Reviewing the capital and revenue risks

■ Reviewing the procurement and contract strategies

■ Reviewing the financial arrangements, including CIPs, optimism bias and risk-sharing arrangements with commissioners; and

■ Reviewing the governance, management and communication arrangements.

2.2.11 As part of the process of developing this FBC, the original Project Initiation Document (PID) has been updated and was then approved by the St Bernard’s Redevelopment Programme Board. The PID sets out the:

■ Project purpose and objectives

■ Project deliverables

■ Project structure , group membership and management arrangements

■ Project controls and communication

2.2.12 A copy of the revised PID is included at Appendix A1.

Structure of this FBC Submission

2.2.13 This FBC is presented in the 5 Case Model approved by DH and HM Treasury which comprises the following key components:



■ The strategic case section. This sets out the case for change, together with the supporting investment objectives for the scheme.

■ The economic case section. This demonstrates that the Trust has selected the most economically advantageous offer, which best meets the existing and future needs of the service and optimises Vale for Money (VfM)

■ The commercial case section. This sets out the content of the proposed deal.

■ The financial case section, which confirms funding arrangements, affordability and the effect on the balance sheet of the organisation.

■ The management case section which details the plans for the successful delivery of the scheme to cost, time and quality.

2.3 Government Approvals

2.3.1 Government approvals to date are shown in Table 2 below, and the approval letters attached as Appendices A9 and A10.

Table 2.– Government Approvals to Date

Stage Approval Body/Date Approval Letter SOC NHS London – July 2010 Appendix A9

OBC DH – December 2013 (concurrent with FBC approval)

Appendix A10

OBC Approval Conditions

2.3.2 The OBC approval letter from DH is expected to contain at least 5 conditions, relating to:

■ Capital Cost

■ Funding for the Scheme

■ Full Business Case

■ Procurement

■ Publication

2.3.3 Table 3 below sets out the conditions and how they are being – or will be – addressed.



Table 3.– Anticipated OBC Approval Conditions

OBC approval condition How being met Capital Cost

See Financial Case - (i) Compliance with capital threshold and (ii) Use of Optimism Bias

Funding for the Scheme

See Financial Case

Full Business Case

See Financial Case - Compliance with capital and revenue thresholds

Procurement

See Commercial Case - Procurement

Publication

FBC will be published within 3 months of DH approval - see: http://www.wlmht.nhs.uk/publications/plans-and-strategies/

Part A: The Strategic Context 2.4 Organisational Overview

Commissioning Structure (to 31st March 2013)

The London Specialised Commissioning Group (SCG)

2.4.1 To ensure the provision of safe, high quality specialised services at identified specialist centres, 10 Specialised Commissioning Groups (co-terminous with the 10 Strategic Health Authority (SHA) boundaries) are responsible for commissioning specialised services. SCGs have pooled budgets for the services they commission and have been responsible for determining the commissioning arrangements for all the services in the National Specialised Service Definitions Set. The National Specialised Commissioning Group (NSCG) exists to co-ordinate specialised services commissioning and make national decisions across SCGs. All SCGs are required to be a member. Currently, the transfer of specialised commissioning to the National Commissioning Board is underway, to become effective from April 2013.

WLMHT Medium Secure Commissioning

2.4.2 The London Specialised Commissioning Group (LSCG) works on behalf of the capital’s 31 Primary Care Trusts to understand the health needs of Londoners and agree the types of specialised services that will meet those needs. The SCG currently commissions a number of the 34 services defined as specialised in the Specialised Services National Definition Set, through a process involving patients and clinicians.



2.4.3 Male Medium Secure services at the Trust are currently commissioned through the LSCG of Primary Care Trusts as part of a contract for the provision of male and female Medium and Low Secure services.

2.4.4 From April 2013, Medium Secure Services will sit within the direct commissioning portfolio of the NHS Commissioning Board. The national transition team are aware of the MSU redevelopment which will transfer to the Commissioning Board authority.

Commissioning Structure (from 1st April 2013)

2.4.5 From 1st April 2013 direct commissioning responsibility transferred to the NHS Commissioning Board (known as ‘NHS England’).

2.4.6 Four factors have determined whether NHS England commissions a service as a prescribed specialised service. These are:

■ the number of individuals who require provision of service; ■ the cost of providing the service or facility; ■ the number of persons able to provide the service or facility; and ■ the financial implications for Clinical Commissioning Groups

(CCGs) if they were required to arrange for the provision of the service or facility themselves.

Rationale for the service being included in the Specialised Services National Definitions Set

2.4.7 High, medium and low secure in-patient and related community follow-up services required for mentally disordered offenders and others with similar needs are provided on a national or sub national basis by specialists in forensic psychiatry supported by expertise in rehabilitation and other specialised fields such as neuropsychiatry. Knowledge and experience of working within the legal framework and with individuals with complex needs and associated risks is critical to ensure the optimum level of care and treatment is delivered in a safe and secure environment with the aim of supporting recovery and rehabilitation and, for most patients, transfer to lower and eventually community accommodation. Medium secure services are clearly identified as one of the nationally prescribed specialised services by the National Commissioning Board.



Detailed description of Medium Secure specialised service activity

2.4.8 Nationally prescribed specialised services have a standard national service specification against which services are commissioned by the National Commissioning Board. Medium secure services are defined as providing a therapeutic psychiatry service within agreed standards of security for individuals with a mental disorder who present significant risk of harm to others, and often to themselves. The services assess and treat mental disorder whilst also reducing the risk of harm and reoffending, through the provision of a comprehensive range of evidence based care and treatment, specifically including offence related treatment programmes.

Overview of the Trust

West London Mental Health NHS Trust and Services Provided

2.4.9 West London Mental Health NHS Trust (the Trust) was created in April 2001 by the merger of Ealing, Hammersmith and Fulham Mental Health NHS Trust and Broadmoor Hospital Authority. The Trust was further enlarged in 2003 by the absorption of mental health services for the Hounslow area.

2.4.10 The Trust provides a full range of local mental health services for children, adults and older people living in the boroughs of Ealing, Hammersmith and Fulham, and Hounslow, as well as three services for which there is a wider catchment population, including High Secure Services for men at Broadmoor.

2.4.11 Some specialist services by the Trust are commissioned nationally, such as the gender identity service and high secure service, and medium secure services for the region.

2.4.12 The Trust is divided into three clinical service units:

■ Local mental health services (covering the London boroughs of Ealing, Hammersmith & Fulham and Hounslow with a total population of over 700,000)

■ Specialist & Forensic services (including medium and low secure care, gender identity and specialist rehabilitation) 4

■ High Secure services (Broadmoor Hospital)

4 This FBC is concerned with the Forensic Male Medium Secure services provided by the Trust.



2.4.13 The Trust as a whole has a forecast income for 2012/13 of £232.348m. The Trust employs more than 3,500 whole time equivalents (WTE). It has five major contracts that represent 78% of its income, and has a strong financial record and has achieved its statutory financial duties. The Trust is registered with the Care Quality Commission (CQC) with no conditions.

The Trust’s Financial Position

2.4.14 A summary of the Trust’s financial position for the years ending 31 March 2012 and 31 March 2013 is shown in Table 4 below.

Table 4.- Trust Financial Summary

2011/12 2012/13Actual Actual£000's £000's

Income from Activities 233,095 220,830Other Operating Income 11,868 11,518

Operating Expenses -217,540 -206,228

SURPLUS BEFORE INTEREST AND FINANCING 27,423 26,120

Interest, Dividend and Depreciation -22,542 -22,285

Retained Surplus for the Year 4,881 3,835

Note: The reduction in income and expenditure between the years is primarily as a result of the discontinuation of the DSPD service.

Specialist and Forensic Services (S&FS)

2.4.15 The S&FS Clinical Service Unit CSU) was created in April 2011, after the Trust as whole reorganised its services into three CSUs. This CSU consists of West London Forensic Service (WLFS) and Specialist Services.

2.4.16 The S&FS CSU delivers a wide range of services across the forensic landscape, which serves a larger population (both supra-regional and national), including pilot projects for women’s enhanced medium secure services (WEMSS) and a national secure unit for adolescents (the Wells Unit). The services also include prison in-reach and community forensic services, which are delivered through mixed models, some of which are delivered in partnership with other providers.

2.4.17 West London Forensic Service provides a comprehensive multi-disciplinary assessment, treatment and rehabilitation service for male and female mentally disordered offenders, as well as those with challenging behaviour and specialist rehabilitation needs, for North West London and beyond. The services include a number of national or cross-regional services.



2.4.18 The service provides in-patient beds on the St Bernard’s site at Ealing. There is a range of in-patient facilities, including:

■ Admission and assessment wards

■ A high dependency unit

■ A slow stream rehabilitation unit for men with challenging behaviour

■ A national adolescent forensic service.

2.4.19 There are a number of rehabilitation wards at both low and medium security, as well as a unit specialising in treatment resistant psychosis. The service provides short-term follow up in the community for most patients prior to transfer to local mental health services.

2.4.20 Services are organised and managed separately for men and women. A Women’s Enhanced Medium Secure Service (WEMSS) in The Orchard Unit, a Women’s Medium Secure service and a Women’s Low Secure unit operate on the Ealing site.

2.4.21 The 2012/13 income budget for Specialist & Forensic Services is £59.6m. This includes income for male Medium Secure services (which are the subject of this FBC – see ‘Commissioning Structure’ section above – for details of the Trust’s Medium Secure commissioners. Income for some of the other significant service areas is shown below:

■ Male and female Low Secure (£8.9m)

■ The adolescent forensic unit (NCG commission - £3.3 million)

■ Services at HM Young Offender Institution Feltham (NHS Hounslow commission, £1.6 million)

■ Women’s Enhanced Medium Secure Service (commissioned by SCG collaborative, £7.4 m)

■ Cost per case rehab beds (£2.7m).

2.4.22 The total value of the Trust’s SLA with commissioners of male Medium Secure services was £20.6m for 2012/13 which represented 9.4% of the Trust’s income from activities.



The St Bernard’s Hospital Site

2.4.23 The St Bernard’s Hospital campus is a 12.32 hectare site located next to Ealing Hospital (which is operated by a separate NHS Trust) on the Uxbridge Road, Southall. St Bernard’s Hospital started life as the Middlesex County Asylum - the first pauper lunatic asylum built in England following the Madhouse Act of 1828, which allowed the building of purpose-built asylums. Building work began in 1829 and the three-storey yellow brick building opened in May 1831.

2.4.24 The hospital (see Figure 1 below) is accessed from the Uxbridge Road from the north and is adjacent to the Ealing Hospital NHS Trust (EHT) to the east; its southern and eastern boundaries are formed by the Grand Union Canal and River Brent respectively. Keyworker accommodation is located on north part of the site along Uxbridge Road.

Site Ownership

2.4.25 The land in the ownership of the Trust is the area bounded by the red line in the figure below. The Trust’s solicitors have confirmed that the land is registered with title absolute, which is the best class of title available.



Figure 1 – Aerial View of St Bernard’s Hospital Site

2.4.26 A detailed site plan is at Appendix B2.



2.4.27 The current low and medium secure in-patient accommodation is provided in a number of locations across the campus:

■ The Tony Hillis Wing is in the oldest part of St Bernard’s hospital, which is a three-storey listed 19th Century building, and houses both medium and low secure rehabilitation wards. This building does not meet the minimum standard required by commissioners for Medium Secure services – due to the secure perimeter arrangements – and therefore a temporary derogation from standards has been issued pending the development of the new MSU. There are a number of other environmental difficulties with the delivery of medium secure care in this building, including poor lines of sight and significant ligature risks.

■ Medium secure admissions and challenging behaviour wards are located in the Three Bridges Regional Secure Unit, a relatively new purpose-built two storey building. This building also contains a single storey Forensic Adolescent Unit

■ On the west of the site is The Orchard Unit (opened in 2007), a Women’s Medium and Enhanced Medium Secure Unit.

2.4.28 Stand-alone specialist rehabilitation services are located on-site in three buildings of varying ages from 20 years to 180 years old. The St Bernard’s Hospital campus also accommodates local mental health services, as well as a Trust Headquarters, administration buildings and support services.

2.4.29 The current male medium secure in-patient accommodation is found in two locations on the site. The accommodation in the Tony Hillis Wing does not meet the medium secure standards required by Commissioners. This provision of services over two sites means that, not only is some of it provided in unsuitable accommodation, it also results in operational challenges and inefficiencies.

2.4.30 The existing site and buildings have been analysed in the Estate Strategy 2011-2020, which was updated in July 2012 (see Section 2.6.1 – 2.6.5 below). Details of the constraints of the site are set out in the paragraphs immediately below.

Site Specific Constraints

2.4.31 The St Bernard’s Hospital presents a number of specific challenges from an estate management viewpoint:

■ The south west canal site is subject to flood risk, although only assessed as



■ The south west canal site is contaminated and known to be the location for the debris from the building of Ealing Hospital and an old gas works

■ A large sewer over 3m in diameter runs north to south along the main access road towards the canal

■ The canal wall running along the southern boundary is a Scheduled Ancient Monument

■ A high proportion of the building estate is listed and under a Conservation Order. This has all been documented in a Conservation Management Plan – an extremely large document which is available on request

■ A large proportion (25%) of the listed buildings are currently redundant (8,991m2). Backlog maintenance costs for these buildings are estimated at £7.7m

■ An interim 3.9m fence has been installed around the Tony Hillis Wing to form a secure perimeter. Though this does not fully comply with the current national medium secure standards 5, the Specialised Commissioning Group has approved this derogation on a temporary basis. This fence does comply with national low secure standards and can therefore remain in place after patient moves in 2015 to provide the secure perimeter for the low secure wards that remain in the Tony Hillis Wing

■ Generally the wards in the older, listed buildings tend to have fewer patients and are not capable of meeting modern standards for medium secure care. Commissioners are aware of this and the continued use of the buildings is only accepted by Commissioners on the basis that a new facility for male medium secure patients is provided at the earliest opportunity.

2.4.32 There is also a restriction and limitation on access to external space for patients.

2.5 Business Strategies (1) National Strategies, Programmes, Guidance and Reports

2.5.1 There are a number of national and local strategies, programmes, standards and guidance that influence the delivery of S&FS CSU services.

5 The Medium Secure Design Principles state that where fencing is used to form all or part of the secure perimeter it must be a minimum of 5.2m in height and should be BS358 weld mesh. There were a number of challenges to achieving this requirement around the existing 19th Century buildings, and the height and construction of the interim fence do not meet the criteria above.



National Strategies

2.5.2 No Health without Mental Health: a cross-government mental health outcomes strategy for people of all ages (DH 2011)

2.5.3 This strategy sets out six shared objectives to improve the mental health and well-being of the nation, and to improve outcomes for people with mental health problems through high quality services. It supports the Government's aim of achieving parity of esteem between physical and mental health. The interconnections between mental health, housing, employment and the criminal justice system are stressed.

2.5.4 Delivering Better Mental Health Outcomes for People of all Ages (DH 2011)

A companion document to ‘No Health without Mental Health’: a cross-Government mental health outcomes strategy for people of all ages. This describes in detail the shared objectives to achieve better mental health and well-being, and the interventions needed in each case.

National Programmes

2.5.5 The Trust Clinical Service Unit (CSU) plans are aimed at delivering the Quality, Innovation, Productivity and Prevention (QIPP) programme targets through the reorganisation of patient pathways and clinical models. This will be delivered by each service through service redesign and planned stepped changes.

2.5.6 Significant developments and investment have been made over the past three years in user experience, user & carer involvement, relational security and recovery-based work.

2.5.7 Six key areas identified for service development are currently being implemented:

■ Need to develop new MSU to vacate wards in unsuitable buildings at the earliest opportunity - the subject of this FBC

■ Long-term secure care – needs assessment and modelling completed; the Trust is currently exploring potential developments

■ Community Forensic models – have been funded and implemented in two Primary Care Trust (PCT) areas; piloting an alternative model in one other

■ Increase community placements – there has been a change in use of local placements over time but there is still significant work to be done on developing borough-based step-down hostel facilities



■ Develop primary care services – this was completed and implemented 2010 – the Trust is currently reviewing

■ Develop community forensic adolescent services –done on a cost per case basis - proposal now for pilot using the Trust’s ‘invest to save’ budget.

2.5.8 In the next 5 years the service aims to:

■ Develop a comprehensive pathway of care (both offender health and forensic) – which provides a spectrum of community and in-patient services, supports delivery of generic mental heath services, and facilitates smooth transfer between services

■ Deliver an appropriate reduction in length of stay – (by admission & assessment process, review of interventions, development of step-down and community services) and ensure patients are detained only at the level of security required

■ Demonstrate improved quality and outcome measures – and further develop efficient evidence-based interventions which reduce risk of re-offending behaviour and maximise opportunities for rehabilitation and social inclusion, including through the implementation of a recovery-focussed model of care

■ Deliver improved service user experience – and meaningful engagement across the full range of services

■ Develop and support a diverse workforce – which has the necessary skills to best deliver the new models of care within the available resources

■ Increase current share of the market – and become the identified preferred provider for the development of forensic services, both across London and for specialist national services.

2.5.9 Payment by Results (PbR) is being implemented nationally in adult acute mental health services. The feasibility of introducing this costing model into medium secure mental health services is being tested through the work of the Secure PbR Product Review Group nationally, and at present it is unclear how this will work. However it is expected that the development of the NCB standard specification will be supported by a cost convergence exercise within the next year.

National Guidance

2.5.10 There is a range of relevant national guidance including:

2.5.11 Best practice guidance: Specification for adult medium-secure services (DH 2007)



This is a national minimum standard / best practice document with quality principles, specifications and high-level indicators for all medium-secure services. It also clarifies the performance framework underpinning the quality principles. This is further supported by the Royal College of Psychiatry Centre for Quality Improvement (CCQI) Quality Network standards against which medium secure services are annually audited through a peer review process.

2.5.12 Environmental Design Guide: adult medium secure services (DH 2011)

This guidance describes overarching principles for the design of adult medium secure in-patient services in addition to setting out the security requirements for these services.

National Research

2.5.13 There is a wealth of research around the link between environment and aggression. Of particular interest is a consultation paper from the United Kingdom Central Council for Nursing, Midwifery and Health visiting, 6

2.5.14 On safety issues the consultation paper said the following: “ … it is worth noting that ward design has been highlighted as an issue in previous reports and one which has been connected with more than one high profile tragedy (Blom-Cooper et al 1995). It seems clear that modern psychiatric units often have major deficits and the National Audit (Royal College of Psychiatrists, 2000) found that there were particular problems with:

■ Sight lines being impeded

Documents

Full Business Case - St Bernard's Hospital - New 80-Bed ... · Vivienne Mowatt, Barbara Byrne and Paul Meechan Technical review and Quality Assurance. Copy for publishing. Contact