In fact, hundreds of staff from 70 clinical departments have been closely involved in the design and specification of the £214m project, helping to define the layout, furnishing and fitting of its 18 operating theatres and 4500 rooms.
"People are really into it – there's a real team dynamic," says Rob Smith, project director for the trust. "Everyone's determined to make it a success, everyone's signed up to it."
Although one might expect that such interest from the users would be tiresome, contractor Laing and its design team believe the staff's interest has been an unexpected bonus. In all the debates about risk transfer and onerous penalties for non-performance, the fact that the trust's staff would see themselves as partners in the PFI process rather than as contract-wielding clients had not been anticipated. "They've already bought into the project – we don't have to sell it to them," confirms Ken Schwarz, partner at project architect Anshen Dyer.
The team dynamic between contractor and end-user has helped Laing through the so far remarkably smooth construction programme. The 1:200 layouts that formed the design at financial close have all been detailed and approved. The shells of the seven ward blocks, two outpatient centres and diagnostic and treatment central "spine" are virtually complete. Seventeen months into a four-year programme, Norfolk & Norwich is on track to meet or even beat its completion deadline of January 2002.
One reason for the trouble-free progress is that Laing is enjoying the flip-side of PFI hospitals' notoriously lengthy negotiations. The 14 months on the starting blocks as preferred bidder were put to good use, squeezing out most of the risk and finding management strategies for what was left.
Norfolk & Norwich made history as the first of 18 hospitals given the go-ahead by Labour in July 1997 to reach financial close. The papers were signed in January 1998, bringing to an end a two-and-a-half-year bid process that eventually cost Laing £3m in direct staff and design costs. The 809-bed hospital will replace two acute hospitals in Norwich's traffic-congested centre, and enjoys an easily accessible greenfield site.
Laing is now exposed to the PFI risks and rewards twice over. Apart from the £151m fixed-price contract, it is a partner (along with facilities manager Serco) and £6m equity investor in project delivery company Octagon Healthcare. The latter uses debt and equity finance to pay the bills during construction, and will be repaid by the trust once the hospital is completed and occupied. Any delay means that the trust can invoke the non-availability clauses in its contract and withhold payment to Octagon. In turn, Octagon could seek redress and damages from Laing.
But, at the moment, such an outcome appears unlikely. None of the risks identified before financial close has clouded the process yet. In fact, the trust's Smith is so pleased with progress that he is predicting an early moving-in day and a possible bonus for Laing.
Even without that incentive, Laing's project director David Hunter is looking forward to better-than-average margins. "If you carry out your role effectively, PFI does offer the opportunity for a better return than a traditionally tendered bid," he says.
The first risk was "medical planning" – the detailed consultations with 700 trust staff to translate room layouts into 1:50 detailed designs. Up to financial close, Laing worked from data sheets of rough specifications , and project company proposals on how these were to be fitted out. But medical planning had to match these with the trust's own performance requirements, and risked overrunning costs if they could not be reconciled.
Fortunately for Laing, 14 months of discussions on the positioning of every sink, door, power point and light switch were concluded amicably, and its pencilled-in costings proved robust. What is more, there were no serious disputes or impasses, and the contract's arbitration changes remained unused. "The trust drove a hard bargain, but they played by the rules," says Hunter.
However, services consultant Hoare Lea & Partners says it found medical planning stressful. "We had to agree the sizing of pipes and risers before we had a firm design – it added pressure," says partner Steve Clifford. And discussion led to a sizeable rethink of the services strategy when emergency stand-by generators had to be transferred from the roof to the ground-level energy centre. Specifying the finishes and equipment to be used in the hospital brought the 64-year contract with Octagon sharply into focus. The PFI gives Serco the opportunity to influence the choice of plant and finishes, and, as Ken Schwarz of Anshen Dyer says, "allows trade-offs between capital spending and maintenance".
Risk avoidance also led Laing and engineer WSP to opt for mixed steel and concrete construction. Concrete, suitable for heavier loads of roof-top plant but more labour-intensive, was chosen for the highly-serviced diagnostic and treatment spine. Steel, more economical and less reliant on labour, but with uncertain lead times, was suitable for the seven ward blocks and twin outpatient centres.
"It was a strategic decision from the risk point of view not to put all our eggs in one basket," says Hunter. But, for WSP, Laing's concern that it would not be held to ransom by operatives or subcontractors meant detailing two building types in parallel, and managing the pressure on its own staff resources at its Bury St Edmunds office. "For us, progressing two types of structure in parallel was tough – Laing needed everything at once," says senior technical director Paul Stanley.
As the concrete/steel dilemma illustrates, one of Laing's chief concerns was whether it could attract and retain labour in a relatively remote part of the country. As it turned out, it managed to recruit 60-70% of its groundworkers and bricklayers locally. Once on site, Laing has worked hard to keep them, providing good toilet and canteen facilities, and a working environment where subcontractors on measured rates can expect to earn decent money.
Laing has also signed up to a code of practice on industrial relations endorsed by unions the GMB, UCATT and the TGWU, to minimise the risk of disruption. But Hunter accepts things may get tougher once the M&E installation picks up pace and specialist electricians and fitters have to be brought in from further afield.
A major advantage of the long lead-in was that Hunter could cherry-pick the best management team available. Laing's 75-strong team is split into four, responsible for wards, external works and off-site roads, diagnostic and treatment areas, and outpatient departments. Pre-planning also helped set up a well ordered site, with made-up access roads, semi-permanent offices and plenty of storage area. "Everyone who's been here comments on what a tidy, well run site it is," says the trust's Smith.
For Hunter, the beauty of the Norfolk & Norwich PFI contract is that Laing has all the decision-making authority it would have on a design-and-build contract, and the close client relationship associated with partnering. "Under a traditional contract, you have all the interfaces between the parties and doubts about who's responsible for what," he says. "Here, we're given full authority to manage the process, with less influence from third parties. PFI gives you more authority to deal with the risks."
But this system may be viewed differently by the consultants. The design firms that risked part of their fees to bid for Norfolk & Norwich saw the risk-sharing typical of that part of the project give way to design-and-build novation, rather than a "partnering" arrangement where risks and rewards are pooled.
On other PFI hospitals, designers have questioned whether a traditional design-and-build relationship can achieve the innovative thinking PFI was supposed to deliver. But Anshen Dyer's Schwarz, although appreciating these views, argues that firms holding them may have missed the point. "If that's a surprise, what did they expect? You have to appreciate the other parties' goals and constraints."
Whatever the contractual relationships, there is little doubt that the country's largest PFI hospital is being built on genuine teamwork. And with the trust staff obviously prepared to consider themselves part of that team, it looks as though Norfolk & Norwich is set to continue on its path as a PFI trailblazer.
How PFI influenced the design
As Laing and the design team concede, the hospital’s conservative brick-and-block construction and stainless steel roof have been chosen with a 64-year lifespan in mind. “If technical advancement is what the client wants, they’d have to reconsider the risk allocation,” confirms Laing project director David Hunter. But the project’s Anglo-American architect Anshen Dyer points out that the campus-style layout is innovative: “In that sense, the private finance initiative has been helpful. Before the PFI, the NHS worked on a fairly narrow range of design options. Now, they’re bound to get new ideas into the system,” says partner Ken Schwarz. The design of a central “treatment” street, opening on to outpatient blocks on one side and wards on the other, integrates the three sections and groups together the facilities for each clinical department, such as gynaecology or orthopaedics. Accident and emergency is sited nearest the main access road, and a separate children’s A&E unit within the paediatrics department is innovation. The design features several internal courtyards that make the most of the natural light available, as well as two three-storey atria incorporated into the internal street. These house ground-floor shops and cafés and the visitors’ reception area beneath high-level walkways that link the “blocks” of the street. Visitors enter the atria from a landscaped central plaza. An energy centre houses a gas-fired combined heat and power plant, to reduce heating bills and provide an extra energy source. Next to it is the materials-handling area for deliveries. A sophisticated IT network lets staff transfer patients’ files, results and X-rays electronically, and data points in wards allow doctors to use laptops.Credits
Client Norfolk & Norwich Health Care NHS Trust Project Company Octagon Healthcare Contractor Laing Facilities Manager Serco IT Provider HBO & Co Laing Design Team Anshen Dyer (architectural and medical planning), WSP (civil and structural engineering), Hoare Lea & Partners (M&E engineering), Landscape Design Associates (landscape design), William C Inman (building cost consultant), Ridge & Partners (M&E cost consultant)
