The strategic context of PFI/PPP The challenge of change a shared - - PowerPoint PPT Presentation

Paul McKenna

Head of PPP Programmes/PPP Lead Advisor Health Facilities Scotland

The strategic context of PFI/PPP

The challenge

• f change a

shared future.

PPP Specialist Support Team

Involvement Commitment Awareness

Continuous improvement and increasing value

Scope and scale:

UK Department Capital Value Unitary Charge Total Unitary charge Forecast Number of PFI/PPP projects Department of Health 12,083 2,025 66,315 123 Ministry of Defence 9,043 1,838 31,871 41 Department for Transport 7,879 1,238 27,592 62 Department for education 7,800 1,082 22,254 168 Other departments 14,060 3,299 51,284 251 Scottish Government 6,175 985 22,284 93 Total 57,040 10,467 221,600 738

Scope and scale:

58% 22% 11% 9%

Scale : Total Capital value of £6.1bn

Further Education Local Authority Health SE & agencies Water & Sewerage Police

Scope and scale:

200 400 600 800 1000 1200 1400 1600

Operational In Construction In Development

Capital Value Unitary charge

NHS Scotland

Scope and scale:

0.0 50.0 100.0 150.0 200.0 250.0 300.0 350.0 400.0

Unitary charge expenditure forecast

2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26

The challenge :

Culture Resources Contract types Policy Change Clinical Changes

• NHS Scotland has 38 operational PPP/PFI Facilities
• A mixed landscape of contract types both PFI/PPP
• Specialist Support team formed in 2014 to support

boards in their management of these contracts

What we set out to do:

FY14-15 Initial roll out Reviews undertaken FY15-16 Review programme and training delivered. Further refinement of process. Savings target achieved FY16 – onwards New targets established Board level and strategic resource models established. Standardised models of working.

Performance, value for money and continuous improvement

Key priorities and approach

• Equipping and empowerment of Boards
• Systemic approach to Boards
• Maximizing value for money
• Benefits retained by boards
• Ensuring service provision is safe and compliant
• Simplified process (scalable & agile)
• Measurable and sustainable performance

Definition Implementation Improve Control

Overview of Support model

Operational readiness reviews In depth reviews Support for variations Review of potential Refinancing Engagement with SPVs End of Contract support Pre operational start Operational Phase End of Contract

Training Increasing Board commitment and ownership - Practitioners Group

• Initial support to projects that are typically 6 months

from operational commencement.

• The key elements of this support are focused on

ensuring that the Boards are aware of how the contract is structured, the key mechanisms and

• bligations within the contract.
• This analysis also considers both Project Co. and

the Boards management structures to ensure that robust and sustainable arrangements are in place and that lines of communication are clear.

Readiness analysis:

• Focused on a detailed assessment of the projects

performance which is performed following around 6 months of a new projects operation, to establish the performance of the contract and the robustness of actions taken following the readiness analysis.

• Reviews are also conducted on established projects to

assess the performance of the contract, quality of service received and the value for money gained from these services.

Project reviews:

Implementation support:

• This provides Boards with either short to medium

term support or ad hoc support in implementing the agreed action plans following either the readiness review or project review activity

End of Contract support:

• Preparatory work prior to the end of the contract,

management of the handover and future use of the project assets

SPV engagement:

• Strategic engagement with SPVs with portfolios of

contracts to establish where common performance

• r initiatives can be addressed (e.g. Helpdesk/

energy efficiency)

Training:

• Provision of either bespoke training packages to

address specific Board needs or generic training to address best practice or knowledge gaps that are identified through the programme.

PPP Governance Model

Joint Board NHS Boards Practitioners Group

Best Practice Strategic Support Operational Management

Successes and benefits

Financial and Non Financial Benefits

Non Financial Enhanced patient environment Greater staff / patient satisfaction Enhanced productivity Improved relationships with service providers Cash Releasing Utilisation of the Facilities Utilities management Utilities procurement Cost avoidance Change Provisions : limiting increased costs Change in law: limiting increased cost Benchmarking and Market Testing Value Improving Service response times Improved maintenance standard Availability Lifecycle management

Lessons Learnt

• Proactive rather than reactive

– Not only the operational phase.

• Board level structures required

– Board level ownership and governance – Board level resourcing – Contract knowledge and confidence

• Operational contract management

– Monitoring Calendar – Risk Register – Variation Management

• Hand back liability

– Life Cycle Management

• Relationship with and role of Project Co

Sustainable performance management

Commercial Management Strategic Planning Operational Management

Proactive Management Maximising value for money Innovation and Partnership

• Increased value for money
• Sustainable and measurable benefits
• Improved performance and assurance
• Planned and agile support
• Ongoing development

PFI/ PPP Providers Specialist Support Team Health Boards

Summary - Active participation

Questions to the panel

The strategic context of PFI/PPP

Chair: Brendan Smyth Divisional Director Construction Division Department of Finance Paul McKenna Health Facilities Scotland Donna Stevenson Scottish Futures Trust Mark Pillans Scottish Futures Trust