Northern Ireland is spending £2.7bn on hospitals. But it’s not just the cash that has British firms interested. It’s Health Estates boss John Cole and his fervent belief that good design makes sick people better.
Just as healthcare development in Britain levels off, it is gearing up in Northern Ireland. Although the six counties have a population of just 1.7 million, a capital investment of £2.7bn has been earmarked for acute hospital developments over the next five years, plus another £550m on primary care development.
Little wonder, then, that British architects such as Anshen Dyer, Avanti, HLM and Keppie Design have already got stuck into healthcare projects big and small, while at least seven big-league national contractors are circling, ready to pounce on the first PFI project, which is due to be advertised this month.
The mountain of work available isn’t the only thing appealing to British firms. Architects and other consultants are even keener on the enlightened approach to architectural design taken by Health Estates, Northern Ireland’s counterpart of NHS Estates.
Its chief executive is John Cole, a highly articulate architect who has set up a selection procedure for architects that awards design creativity the highest marks. More famously, he has pioneered Smart PFI, which promotes design within the PFI procurement system. Smart PFI has now been adopted as policy by the RIBA president Jack Pringle, who claims to have received a good response from the Treasury.
As champion for both design and sustainability for the whole Department of Health, Social Services and Public Safety in Northern Ireland, as well as council member at the RIBA for 12 years, Cole needs little prompting to launch into a spirited defence of architectural design.
“I fervently believe that design influences us all in terms of how effectively we work and operate and feel about ourselves and interface with others. And therefore hospitals, where people are in their worst and lowest and most vulnerable condition, is a place where we must put this design quality.”
He cites research by the American academic Roger Ulrich showing that well-designed hospital environments can reduce patients’ recovery time by 20%.
The total package
Cole’s commitment to architecture does not mean that he shirks his responsibility for building procurement. Far from it. Health Estates is not just an agency for funding and overseeing healthcare developments. Unlike NHS Estates in England, it actively takes on the project management role on behalf of the local NHS trusts. In this way, Health Estates can be seen as a throwback to the old British regional health authorities, which kept full multidisciplinary design departments. Cole does not believe in keeping design in-house: he farms this out to a galaxy of consultants. But he does believe that Health Estates should be the “informed client” by retaining specialist healthcare procurement expertise in-house through a team of 85 development staff, of whom 25 are project managers. Most of these are also qualified as architects, engineers or quantity surveyors.
Cole has distilled his procurement philosophy down to just four words – The What and The How. This is a reaction to government thinking on PFI, in which public sector clients are pressured to bring in the full package of funding, design, construction and FM from private consortiums. “Instead of hoping someone else will tell us what we need, the client has to stand up and take that responsibility,” he says. “That someone else [the private sector bidder] should be responding with: ‘Here’s The How. Here’s how we will use our skills to deliver The What.’”
In other words, Health Estates takes responsibility for full-concept design – much more than the perfunctory public sector comparator used in British PFI projects – leaving consortiums to bid on funding, construction and FM only.
A full concept design was drawn up by Keppie Design of Glasgow for a £60m cancer centre at Belfast City Hospital – a joint venture of local firms Graham Group and H&J Martin was selected because it proposed relatively minor design improvements. At the last minute, the procurement system was switched to design-and-build, as Health Estates found the required capital, and the centre was opened on schedule in March.
Health Estates is further down the road with another innovative procurement method dubbed performance-related partnering. Based on Sir John Egan’s Achieving Excellence agenda, it is a partnering arrangement that brings in contractors early on to help the design team with buildability. Each framework comprises a sequence of three or more projects that can be let within a four-year timeframe. But within the framework, each contract is let individually as a guaranteed maximum price based on Health Estates’ costings.
Getting better every time
To Health Estates, the benefit of performance-related partnering is that it gets the building it wants at the price it agreed. To the contractor, the benefit is that, if it performs well on the first contract, it is offered the second contract and so on. The catch, though, is that Health Estates expects cost savings of 3-5% to be made progressively on each follow-on contract as a result of the contractor’s experience so far.
To date, about 16 performance-related partnering frameworks have been let, each comprising up to four contracts ranging from £600,000 to £60m in value. “I don’t think we’ve had a claim situation on any of them,” says Cole proudly.
A third procurement method that Health Estates has still to tackle is LIFT (local improvement finance trusts), which is to be used alongside performance-related partnering for community schemes including GPs’ surgeries. As LIFT hands even more responsibility than PFI to the private-sector consortium, which not only commissions the design but retains ownership of the building, it presents more of a challenge to Cole.
“In LIFT, there’s no problem about the contractor having the consultants working for him. It’s more a matter of who defines, approves and signs off what the client is looking for. And whether the architect and contractor meet that standard. And if they don’t, whether the client can go back and say, ‘It’s not good enough, we’re not having it’.”
Evidently, Cole has another political battle ahead of him. He is, however, determined to keep his eye firmly on The What and duck and dive with The How to deliver it. His far-sighted creed is: “We have to remember that buildings are usually around for 50 years or more, and the political situation for financing buildings and everything else will change 10 or 15 times over that 50 years. So flexibility [of procurement] is a key element you have to get into that.”
A win–win situation
Alliances of local and British architects have done well out of Northern Ireland’s healthcare programme. For British architects inured to playing second fiddle to contractors on healthcare schemes, the work is a breath of fresh air – and to local architects, such alliances offer a way into healthcare design.
For instance, Avanti Architects of London teamed up with Kennedy Fitzgerald Associates of Belfast to win the commission for the Grove Well Being Centre in Belfast, which includes leisure facilities and a library. “We enjoy working with Kennedy Fitzgerald, who have a good track record for schools, churches and fire stations,” says Justin de Syllas, partner at Avanti. “And the project managers at Health Estates and the representatives at the clients’ trusts are extremely civilised people to deal with. They have a culture of doing the business instead of posturing.”
On the contracting front, local companies Farrans Construction, Graham Group and H&J Martin have all done well, although none had prior healthcare experience. Farrans targeted the sector by setting up a healthcare division that has won four contracts worth a total of £68m, which is nearly 30% of the company’s total building turnover. As well as the £60m cancer centre, the Graham and H&J Martin joint venture has completed the £40m first phase of Belfast’s Royal Victoria hospital redevelopment.
Health Estates Northern Ireland plans to let a programme of acute hospital developments worth £2.7bn over the next five years. They include four large hospitals, each worth between £190m and £340m, “to be tested for PFI”. In addition, it is running a primary community care initiative, the first phase of which is worth £386m and comprises 57 projects including healthcare centres and facilities for children, mental health patients, and learning disabilities. The community care projects will be let either as performance-related partnerships or through Lift.
Architects are selected according to three criteria: creativity, health planning and deliverability, of which creativity is given top priority. Selection is by competitive interview, although this effectively boils down to a fairly intensive conceptual design competition. Most commissions are awarded to alliances (not joint ventures) between British architects with healthcare experience and local architects with creativity and a grasp of local planning and cultural issues. Services engineers must demonstrate an ability to achieve an “excellent” score on NEAT, the NHS Environmental Assessment Tool – healthcare’s version of the BREEAM sustainability rating.
Contractors are selected according to nine criteria, as well as their track records. The criteria include their choice of subcontractors and supply-chain members, along with named site managers. Value-engineering, site organisation and local employment policy are also considered important. All contracts let so far have gone to Northern Ireland firms, but large national firms are now gearing themselves up to bid for major PFI contracts in association with local firms.