The department runs the PFI programme and sets the rules for all other healthcare bodies to follow. In Sold on Health, last year's key report, the NHS was told to overhaul its capital procurement methods to improve design quality, reduce delays and achieve better value. In particular, it urged NHS Estates to pilot a partnering scheme (Procure 21), develop in-house procurement expertise and establish a development agency, Inventures.
Part of the department of health, NHS Estates is the agency responsible for overseeing the provision of healthcare buildings and is adviser to the secretary of state on estate issues. It is responsible for developing hospital procurement and is behind the Procure 21 partnering initiative. However, it does not set the terms for PFI, which is the Department of Health's responsibility.
Newly hived off from NHS Estates, Inventures will be launched next spring as a PPP to exploit the commercial potential of redundant NHS properties. It will also offer construction and facilities management services on smaller projects and provide serviced accommodation to the NHS, competing against the private sector. Four consortiums were shortlisted this month to form the PPP. The government will retain a minority 49% stake. It will be headed by former NHS Estates chief executive Kate Priestley.
Procure 21 is NHS Estates' response to Egan – a partnering programme that will give pre-selected private sector suppliers a series of projects over a four-year period.
The pioneering initiative, launched last April, is designed to cover publicly-funded health projects worth more than £1m and PFI schemes of between £1m and £20m.
Under the initiative, framework agreements will be established between NHS Estates and principal supply chain partners. Following a string of delays and indecision by NHS Estates, two pilot projects covering North-west England and the West Midlands were finally advertised in May this year.
NHS Estates is now sifting through 200 expressions of interest for the pilots. The deals are expected to be signed by next April and be worth a combined total of £300m over four years.
If the pilots are successful, Procure 21 will become the standard procurement method across the NHS, eventually including large PFI projects.
NHS Lift is a £1bn public-private partnership initiative to overhaul inadequate and outdated community health facilities. It aims to refurbish or replace up to 3000 GP and dental surgeries and 500 one-stop health centres by 2004.
Lift, launched this July, is an acronym for Local Improvement Finance Trust. A joint venture between the Department of Health and Partnerships UK, it is designed to bring framework-type efficiencies to smaller projects.
Lift will be delivered regionally by local health authorities and primary care trusts, which are expected to form PPPs with private sector consortiums. Local Lifts will establish partnering arrangements with successful consortiums for the provision of batches of facilities in their areas. Each deal could involve hundreds of small projects over several years.
Successful consortiums will be expected to come up with innovative ways of improving health provision by, for example, bringing in dispensing chemists to provide pharmacies at doctor's surgeries.
The Lift programme will particularly target inner city areas where facilities are deemed to be particularly poor and health needs most acute. According to the government's own figures, only 40% of existing primary care premises are purpose-built: 80% are deemed too small, and disabled access is often inadequate.
Six pathfinder Lift schemes have already been approved and a further tranche will be identified later this year.
Primary care trusts
PCTs are local agencies established to improve public health in their areas through primary care facilities – GPs, dentists, opticians, etc. They will work with the new strategic health authorities (see below) to draw up investment plans for their areas, which they will execute using Lifts.
NHS trusts are the bodies that administer individual hospitals and are the clients for large new-build projects. When they want to embark on capital projects, they bid for public funding or PFI credits from the development of health.
Strategic health authorities
Thirty SHAs are being established to replace the 95 old Health Authorities. When they are formally established next April, they will co-ordinate the service provision activities of PCTs and NHS trusts. However, they will take a back seat when it comes to procurement, which is being devolved to front-line agencies.
Established in June last year, Partnerships UK replaced the Treasury taskforce as the government body spearheading the rolling out of PPPs across the public sector. In the health sector, PUK has joined forces with the department of health to launch NHS Lift (see above). PUK is itself a PPP, with the government retaining a minority 49% stake. Private sector investors include Jarvis and Serco.