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JOINT FUTURE AGENDA: SHORT LIFE WORKING GROUP ON JOINT PREMISES DEVELOPMENT IN PRIMARY AND COMMUNITY CARE: FINAL REPORT
PART 6 - OTHER MODELS OF DELIVERY
13. Flexible Models of Delivery for Joint Premises development
13.1 A consistent, flexible model for key types of joint developments should contribute to an easier process for establishing joint premises and more accessible, wider participation in joint developments. Such a model will also allow the potential 'bundling' of similar projects to provide the opportunity for a greater variety of financing arrangements to be established. Effective models developed by existing local partners with a history of joint premises development may provide a useful starting point for a standard suite of flexible delivery models.
Recommendation 19: The Scottish Executive should ensure that a standard suite of flexible delivery models is developed incorporating key solutions as practical experience of joint property development evolves. PPP represents a real opportunity to effect risk transfer, lever additional finance, and secure a long-term vehicle for delivering additional investment across Scotland that directly underpins joint strategic planning arrangements.
14. Public Sector Models of Delivery
14.1 Our review focused on the deployment of public sector capital to deliver developments, which are likely to form a starting point for joint premises development in most areas. This model is well suited to the development of small individual schemes that meet local joint service requirements.
14.2 We consider that as the nature and scale of joint services grows, it is less likely that public sector capital (often derived from a wide variety of sources such as hospital closure receipts, challenge or specific development funding) will on its own be sufficient to underpin the necessary level of joint premises development. To address this issue, we have investigated some new models of public sector delivery.
14.3 In our review of delivery models, we have identified promising models for joint working in East Dunbartonshire involving the establishment of joint structures involving the Local Authority, local NHS Bodies and the local community.
14.4 Although, each joint structure is slightly different in legal form, the general model involves a "Partnership Board (PB)" which acts as a strategic management and financial decision-making forum. The PB is responsible for developing and implementing a business plan to realise the partner's aspirations and engage the local community in the development proposals. The PB delivers this business plan through a special purpose vehicle, established as a wholly owned subsidiary of the local authority. The models developed are outlined in Appendix 3. The Lennoxtown Initiative, importantly, involves a number of legal issues that remain to be clarified. It needs to be considered as a demonstration of a wider approach to joint development which, importantly, involves the community taking ownership and a lead role in the Partnership.
14.5 These examples of joint structures highlight close joint working under the community-planning umbrella to maximise the potential gain to the community and the community planning partners. During our consideration of these emerging structures, we noted the conflict between the development and the planning role of the local authority in such arrangements but also took into account the views of the Local Partners that the benefits of co-operation far outweighed unilateral action.
14.6 The close co-operation of the Local Partners in developing these arrangements is encouraging and we commend this type of integrated planning where the overall focus is on community gain. However, we noted the difficulties arising from the present legislative position for NHS bodies to participate in such ventures. Our proposals for legislation on LIFT set out in section 16 should make it easier for NHS bodies to participate in the same way as Local Authorities are able to at present.
14.7 In addition to these emerging development models, we consider that the Scottish Executive and Local Partners should investigate other models that provide an alternative to public sector delivery. This should facilitate the development of a range of mechanisms by which joint premises aspirations can be realised and joint services delivered.
15. Public Private Partnerships
15.1 Models for delivering premises that are currently available to partner organisations individually, namely Public Private Partnerships (PPP) including the Private Finance Initiative (PFI) should also be available jointly.
15.2 Across the UK, PFI and more recently PPP schemes are now well established as vehicles for delivering improved public services in a variety of sectors.
15.3 Within the Health and Local Government sectors in Scotland the traditional PFI approach has been used in projects concerning primary and community care on a project specific approach. These projects have significantly increased the range and size of property development throughout Scotland through the injection of private sector capital to supplement public sector funds. PFI enables public sector organisations to access external finance by developing projects that are economically attractive to private investors. This allows public sector capital to be channelled to less economically attractive but equally significant development. However the limited capital value of individual projects and the contractual complexity of jointly developed projects has made them less attractive to private sector partners.
15.4 Within Health, we have found that third party developer-led schemes in primary care premises proved to be of considerable benefit where property values could not support such developments (whether in low value urban or remote rural locations).
15.5 We concluded that the existing models available to NHSScotland bodies, GPs and other independent health contractors in Scotland for accessing private sector finance, while adequate for the majority of health care projects, are restricted in their ability to deliver the level and nature of funding required to support and encourage wider engagement on the development of joint premises. More crucially, the use of the traditional PFI model has been opportunistic and not been applied in a way which supports long term joint strategic planning.
15.6 We consider that joint premises developments on a national basis have the potential to involve a relatively high volume of smaller value individual projects as primary and community care services and facilities are modernised.
15.7 Given the potential requirements of joint premises development driven by primary care modernisation and the Joint Future Agenda set against the limited availability of public sector capital, we identified that the continued shortage of interested private sector partners is a potentially serious constraint on the expansion of joint premises development.
15.8 We concluded that there is a need for an alternative approach to the traditional PFI model. Our investigation of alternatives identified a joint venture approach in England that has drawn interest from NHSScotland, Independent practitioners, Local Authorities and importantly the Private Sector (See 16 below). The Private Sector does therefore appear to retain an interest in being involved in public sector projects provided that an appropriate form of partnership can be developed. A major constraint to this is that Scottish Ministers do not have powers to enter into such joint venture vehicles.
Recommendation 20: The Scottish Executive should introduce legislation that will enable Scottish Ministers, NHS bodies and contractors, local authorities and private sector providers to enter into Joint Venture agreements in order to provide greater flexibility to support joint premises development. The first stage would be to consult on specific proposals (Autumn 2003).
LIFT
16. NHS LIFT in England
16.1 In England, Local Improvement Finance Trusts are companies limited by share capital in which the private sector, the Department of Health, Partnerships for Health (a national joint venture between DoH and Partnerships UK) and the local coalition of NHS interests become shareholders with rights to a seat on the board and an entitlement to share in any profits, which can then be re-invested in healthcare. This model, known in England as NHS LIFT, is a PPP in its truest sense and has already become the dominant source of primary care premises ownership, with the aim of delivering up to 1bn in investment in primary care infrastructure in support of the NHS Plan.
16.2 To consider the potential of NHS LIFT as a proper model for driving forward the joint premises agenda members of the SLWG visited Newcastle and North Tyneside LIFT in May 2003. The team explored with officials from the Department of Health, Newcastle and North Tyneside Primary Care Trusts and two local authorities their decision to combine and commit to LIFT. In the case of Newcastle and North Tyneside, the local partners committed to shareholding in LIFT on the back of jointly agreed service strategies. In one area, the joint service strategy was an intermediate care strategy between health and social care and in the other area the joint service strategy was about the distribution of customer service points.
16.3 We noted that a LIFT company invests in a rolling programme of premises modernisation over time and is not per se a partnership formed for the development of specific project premises, as is the case for existing examples of joint premises. Forming a LIFT company is predicated on a strategic plan for services in the local area, the Strategic Services Development Plan (SSDP). This basis for development fits well with our findings ( see section 11.1 and 11.3 above) on joint vision, strategic leadership and appropriate joint planning processes.
16.4 We concluded that LIFT offered Local Authorities a number of levels of involvement as either a shareholder in a LIFT company or as an end-user of LIFT products.
Considerations for adopting LIFT in Scotland
16.5 We considered that if local authorities were to play a full part in LIFT activity as one of a number of potential routes to procure joint premises developments, then a more community focused name might be helpful. A "Strategic Partnering Board" provides the overarching partnership arrangement for a LIFT company in England. We observed that, in Scotland, the SPB might well be the Community Planning Partnership(s).
16.6 We considered that the ability of LIFT to demonstrate Best Value is key, this will require to be incorporated in to any proposals.
16.7 We observed that the Scottish Executive/STUC protocol as it currently applies to PPP in Scotland would apply to any development of LIFT or any other form of PPP in Scotland .
Requirements for enabling LIFT
16.8 In order for LIFT to be introduced in Scotland, primary legislation will be required to allow Ministers (and Health bodies on their behalf) to take a shareholding in LIFT Companies. The Minister for Health and Community Care has already agreed that appropriate powers be sought when the legislative timetable allowed. We anticipate that Ministers will consult in advance of the introduction of legislation to progress LIFT in Scotland.
Recommendation 21: The Scottish Executive should consult within its proposals for Joint Venture Organisations such as LIFT on the basis that such arrangements offer flexibility for joint premises developments in community care under the umbrella of community planning partnership(s).
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