Linking Opportunity and Need: Maximising the Regeneration Benefits from Physical Investment

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CASE STUDY 12: SALFORD HEALTH INVESTMENT FOR TOMORROW ( SHIFT)

Background

The Opportunity

In 2001 Salford NHS (Primary Care Trust and Royal NHS Hospital Trust) embarked on the Salford Health Investment for Tomorrow ( SHIFT) programme. SHIFT aims to modernise 3 core elements of the Trust's provision:

  • its premises,
  • its services, and
  • its workforce.

The focus of this case study will be on one of the 5 key developments within the SHIFT programme, namely the £200 million redevelopment of the Salford Royal (formerly Hope Hospital) site in Salford. Construction began on the Private Finance Initiative ( PFI) redevelopment in late 2007 with completion planned for 2012. Employment opportunities are expected in both the construction and facilities management phases.

The Need

According to the 2004 Index of Deprivation, Salford is the 12 th most deprived local authority area nationally with high levels of unemployment and economic inactivity amongst its residents. Key barriers facing the unemployed are their level of skills, low employment aspirations and the cost and availability of transport.

The Approach

Aims and Objectives

The Trust aims to secure employment opportunities from the redevelopment of Salford Royal Hospital by working closely with the developer. This in turn will then contribute to the wider regeneration of Salford.

Activities and Structure

To link local residents to the employment opportunities from the Salford Royal Hospital redevelopment, the Trust has sought to ensure that employment and training supports are an integral part of the redevelopment package. However, its aims are compromised because the hospital redevelopment is a PFI project. As such, the developer provides the main capital investment (£165m), while the Trust is the client with £35m of the investment coming from public funds. This means that the developer must buy-in to the same aims and objectives of the Trust.

To help achieve this, the intention to integrate employment and training supports within the redevelopment package was agreed at the pre-bidding stage.

  • In late 2003, the Trust contacted the North West Development Agency ( NWDA) about the potential for integrating wider regeneration aims into Salford Royal Hospital's redevelopment.
  • NWDA then put the Trust in contact with their sub-regional partner, Manchester Enterprises, who provided 2 consultants to scope out the opportunities and then act as an interface between the Trust and prospective bidders.
  • The regeneration strategy culminated in a March 2004 workshop which brought together 3 short-listed bidders to discuss the implications of the site redevelopment on the local area. Also invited to the workshop were around 30 organisations, which included employability agencies ( e.g. Jobcentre Plus) and supply chain specialists.
  • It was made clear to the bidders that their wider regeneration proposals would be scrutinised as part of the tendering process.

The Trust received 3 bids which all scored high in terms of the regeneration support packages offered by the developers. However, the successful bid did not include employment or training output targets. These were later developed between the Trust and the developer (Balfour Beatty) in a process that initially involved the Trust outlining its aspirations and the developer explaining that their aspirations were often not feasible - i.e. little progress was made. The role of one of the Manchester Enterprise regeneration consultants as an independent facilitator subsequently added value as it gave the Trust a better sense of what were reasonable requests. The starting point taken was now demand-led, focusing on the workforce needs of the developer. Two key points arose:

  • The number of direct job opportunities are often limited in site redevelopments given the shift away from construction and towards pre-fabrication.
  • There are basic skills requirements before individuals can be considered for a job on a development site.

Through these discussions, clear annual targets have been set for work placements, recruitment and training. These include:

  • 11 annual job starts for new entrants to the labour market; and
  • 10 annual NVQ Level 2 qualification attainments among sub-contractors.

The Partnership Process

The approach is not built upon a formal partnership with, for example, a project steering group to manage the approach. Instead, the approach is built on a strong sense of partnership between the Trust and the developer. This has developed with the support of:

  • NWDA in the pre-bidding process for its support of a regeneration strategy connected to the hospital redevelopment, organising the joint workshop, and providing clear guidance to bidders as to the importance of the regeneration element.
  • Manchester Enterprise in providing consultants that helped facilitate the employment and training targets.

Engaging with Beneficiaries

To engage local residents, the Trust and the developer have looked to use existing employment outreach activities managed by the Trust so as to avoid unnecessary duplication of activities. For example, using the monthly Job Shops managed by Salford NHS and Jobcentre Plus to promote the construction and facilities management stages employment opportunities of the Salford Royal Hospital redevelopment. The Job Shops have run since 2003 to promote NHS job opportunities among local residents and are supported by representatives of the wider healthcare team within facilities, support, clinical, administration and clerical services.

There has been no active community outreach to date because partners believe there are only limited opportunities for those furthest away from the labour market given the basic skills requirements needed for construction jobs. There may be more potential to reach out to harder to reach individuals during the facilities management phase of the development. At that stage, it is envisaged that the voluntary sector will play a key role in engaging and working with disadvantaged local residents prior to applying for work placements or jobs. Closer links with voluntary sector partners are being developed.

Engaging with Investors, Contractors and End-Use Employers

The developer was engaged in the tendering process (see above) and it has since been active in encouraging its own sub-contractors to get involved in the wider employment support and skills development aspects of Salford Royal Hospital's redevelopment. For example, the developer organised a Meet the Buyer event to encourage small local companies to bid for contracts. At the time of the event, the developer was able to be quite specific about its needs and 10 of its procurement staff attended the event. Through short one-to-one discussions with potential sub-contractors, the procurement staff discussed the procurement questionnaires which suppliers had completed prior to the event and outlined any potential weaknesses. Manchester Enterprise staff were also at the event to give targeted business support to address these weaknesses.

More recently, the developer has appointed a Skills Coordinator to proactively manage the process of achieving the employment and training targets. The Skills Coordinator will liaise with sub-contractors to find out what recruitment and training needs they require and then look to source this. This will help overcome the difficulties the developer has had in the past with sub-contractors, i.e. sub-contractors are generally happy to recruit an apprentice or be involved in skills development but do not have the time or resources to source recruits, find a training provider or get the necessary information about available programmes.

Funding

There is no specific funding allocated to achieving employment and training targets as these are included in the overall £200 million redevelopment costs. However, additional funding has been sourced through:

  • Manchester Enterprises, with some NWDA and NHS Trust support, funded the 2 consultants to develop the regeneration strategy for the hospital redevelopment.
  • CITB (Construction Industry Training Body) funds the Skills Coordinator as one of its Construction Skills Academy model projects.

Sustainability of Approach

The approach should be sustainable on 2 fronts:

  • The hospital redevelopment contract covers a 30-year period when the facilities management stage is included following the construction stage.
  • The developer's strong buy-in to the employment support and skills development package means the approach should be maintained. Furthermore, the employment and training output targets are included in the regular key performance indicator ( KPI) discussions between the Trust and the developer.

Assessing Good Practice

Outcomes and Impacts

To date, there have not been any employment or training outputs that can be directly attributed to the Salford Royal Hospital redevelopment because the construction phase only began in late 2007 and the Skills Coordinator has only recently took up position.

Successes

The main successes of this approach are:

  • The successful use of the pre-bidding process to achieve employment and training targets connected to the hospital's redevelopment.
  • The strong sense of partnership between the Trust and the developer, which has been facilitated by the Manchester Enterprises consultants.
  • More than 30 local companies attended the Meet the Buyer event with several securing contracts with the developer.

Weaknesses

The main weakness of this approach is:

  • Looking forward, there may be difficulties in engaging and then supporting more disadvantaged residents. There is no dedicated funding to support those furthest from the labour market, which means partners will rely on existing voluntary and community sector projects to support individuals into employment opportunities.

Improvements

The key improvement identified from this approach is:

  • Putting the Skills Coordinator in place at an earlier stage. However, it took time to source sufficient funding for this position, which was secured from CITB.

Transferability of Approach

A number of elements could be transferred to other approaches:

  • The clear decision prior to the bidding stage to include regeneration and employment concerns within the hospital redevelopment remit.
  • The workshop bringing together short-listed bidders and agencies involved in providing employment support to better inform each side what was possible.
  • The support provided by external consultants (Manchester Enterprise) added value to the process in terms of maximizing the wider regeneration benefits.

Key Lessons

The key lessons identified from this approach are:

  • The successful engagement of the Trust with both the developer and its sub-contractors to secure employment and training benefits from the Salford Royal Hospital redevelopment. More specifically:
  • An early focus on regeneration objectives, which was agreed prior to the bidding stage.
  • Informing and discussing with the developer and sub-contractors the potential for employment and training benefits from the outset. Events included the joint workshop and the Meet the Buyer event.
  • Involvement of an independent regeneration consultant to help facilitate agreed employment and training targets.
  • The recruitment of a Skills Coordinator to proactively manage the process of achieving the targets.