LIFT and P21 Procurement in Healthcare Construction Market Report - UK 2014-2018 Analysis
Published: 28/08/2014 / Number of Pages: 68 / Price: £795.00
Introduction and Overview
AMA Research are pleased to announced the publication of the 2nd edition of the report 'LIFT and P21 Procurement in Healthcare Construction Market Report - UK 2014-2016 Analysis', which reviews the major changes currently taking place within the NHS, specifically reviewing the future of key construction programmes and procurement routes under the new NHS structure.
Key areas in the report:
- Government reform of the NHS - analysis of new Operating Structure.
- Implications of the Health & Social Care Act for the Construction Industry.
- LIFT/P21 Procurement - programmes, capital values, consortia - forward project pipelines.
- Analysis of NHS Revenue and Capital Funding to 2016 and capital funding arrangements under the new NHS Structure.
Areas of particular interest include:
- Review of main procurement routes and construction programmes used in the healthcare sector and their future under the new NHS structure, focusing on: LIFT and ExpressLIFT; Hub Initiative in Scotland; Procure21/Procure21+; Designed for Life: Building for Wales (P21 in Wales) and Frameworks Scotland
- Key schemes - capital budgets, status, consortia/contractors.
- Review of major contractors and consortia, PSCPs (key contractors/framework partners). Key developers and investors involved in the healthcare sector - future opportunities for healthcare work and key issues for the construction industry.
- Future Prospects - impact of a more rationalised estate and a move away from large healthcare developments, towards upgrading, refurbishing and extending the primary healthcare estate.
- Forward project pipelines - schemes, capital values, key players etc.
- Detailed market data and insight on the LIFT and P21 procurement in healthcare construction market by AMA Research, a leading UK provider of construction market intelligence.
Public Sector Healthcare in the UK
- Overview of the new Structure of the NHS - England, Scotland, Wales.
- Legislative drivers and Government reforms in the NHS - Health Care Act 2012.
- New Providers and Clients under the new NHS Structure - timetable, Clinical Commissioning Groups, NHS Commissioning Board, Independent Providers.
- Estate Rationalization with the NHS - size of estate, £4bn maintenance backlog value, future of GP Premises - developments, funding issues etc.
Healthcare Spending in the UK
- NHS Funding in England, Scotland and Wales, Primary Care Spending.
- Capital Spending in the NHS - England, Scotland and Wales - budgets 2011-2016, key projects.
- Construction Output in the Healthcare Sector - forecasts to 2018. Healthcare RMI spending.
Procurement of Healthcare Construction Work
- Procurement routes for GPs and PCTs - Future of Procurement under the new NHS Structure.
- NHS LIFT - Overview, investment 2004-14, scheme update & progress to date (waves, construction values etc.). Forward pipeline to 2016 (schemes, capital values, players etc.)
- ExpressLIFT - overview, investment, scheme update & progress to date. Principal Consortia and LIFT Partners, review of 49 LIFTCOs - schemes, capital expenditure 2011-15. Future of ExpressLIFT under the new NHS Structure.
- Procure21 - overview, investment, scheme update, project pipeline, PSCPs (capital values of current schemes 2011-2020).
- Procure21+ - overview, investment, scheme update, project pipeline.
- Future of Procure21+ under the new NHS Structure - preferred route?
- PSCPs - key players and partners.
- Procure21 in Wales - Designed for Life 2012-2016. Framework partners.
- Frameworks Scotland /Hub Initiative in Scotland - HUBCOs, projects, values, status - development pipeline by region.
- Other finance and procurement options for NHS clients - LABVs, Joint Ventures, Surplus Land (review by strategic authority - area, future use, date of disposal).
Construction Supply in the Healtcare Sector
- Key Construction Companies and Consortia in the Healthcare Sector - estimated project values won in 2013/14.
- Primary Healthcare Developers and Investors - by no. of primary care premised owned.
- Major Consortia and Supply Chain/Framework Partners in the Health sector - by procurement scheme.
- Healthcare Opportunities - key projects in the pipeline.
Under reforms in the health and Social Care Act, the NHS has undergone major structural change, with the management of the NHS, including the estate, decentralized as more power is handed to Clinical Commissioning Groups (CCGs).
In addition, with/span> NHS capital spending now drastically reduced, the process of funding new hospitals and primary care facilities has also changed. For procurement purposes the most significant change for the NHS comes in the transfer of commissioning functions from PCTs to GP-led CCGs and NHS England, which has lead to the increased provision of services in the primary care setting.
With more healthcare services being driven out of the acute setting and into the primary sector, many GP practices are already expressing concern about how they can comply with the CQC requirements and where funding for property alterations may come from. In February 2014, NHS England announced that it had put the vast majority of GP premises investment on hold while it develops a national framework to evaluate bids for funding. The broader policies of developing GP-led commissioning have undoubtedly lead to greater co-operation between the private and public sectors and more work with private providers and their construction teams.
A further driver of increased partnership with the private sector is also taking place in the acute healthcare sector with the creation of NHS Foundation Trusts, under which hospitals can generate their own income. As a result, there has been a rise in private providers refurbishing part of existing hospitals, adding extensions, new-build facilities or even taking on the full operation of an NHS hospital. Foundation trusts are expected to be a popular target for construction companies as they tend to be more commercially aware and are usually more financially robust. Furthermore, Foundation Trusts are moving towards more longstanding, partnership-style relationships with the construction supply chain, with the focus on building up long-term relationships with one particular firm.
As a result of these reforms, the nature of future work in the healthcare sector is changing to reflect a more rationalized estate, with the majority of healthcare clients reviewing their healthcare estates in a bid to achieve efficiency savings. The transfer of the NHS estate to NHS Property Services in April 2013 amounts to some 4,000 sites and a maintenance backlog of around £4bn. The future focus of NHS services will be on moving care within or closer to home, more regional services and the closure of some hospitals. A capital programme is being developed, which is likely to see more healthcare work coming through at local level. In the months during which the PCTs were abolished a number of healthcare projects were put on hold, but over the next 18-24 months opportunities for work in the sector are likely to re-emerge.
The healthcare industry is continuing to see a move away from secondary healthcare developments such as large PFI hospitals, towards upgrading, refurbishing and extending the primary healthcare estate, with more emphasis on improving existing healthcare premises rather than building new ones.
The joint venture structure as seen in PF2 and ExpressLIFT to replace the traditional PFI model now seems to be the way forward for privately financed development in the NHS. LIFT also has experience of bringing in capital investment into rundown areas. As public spending tightens the shared use of buildings with other public sector bodies may be the only way that investment into new facilities can be achieved.
In the years ahead, NHS trusts and hospitals are expected to focus on the maintenance of their estates with refurbishment programmes and on improving staff and patient facilities. Projects are likely to continue at the smaller end of the scale in value terms, but there will be a high volume due to the need to improve the condition of the healthcare estate and most of these will be procured under P21+.
The main challenge for contractors will be to reduce build costs and develop standardised designs and techniques. The current economic climate has focused all NHS trusts on capital efficiencies - how to achieve more for less. The construction industry will be looking to work closely with newly formed Foundation Trusts and CCGs in the primary care sector with advice and ideas on how to utilize existing assets to reflect the changing nature of health care needs within their area.
Despite reforms and austerity measures, investment in the NHS still remains a priority for the Government, with revenue funding for the NHS protected until 2016, and increasing to £115.1bn in 2015-16. At the same time, NHS capital funding will rise to £4.7bn a year by 2015-2016, around 4.1% of total NHS spending. The Government has indicated that it may need to extend its austerity measures beyond 2016, which will mean further funding constraints for the NHS. The potential for a change of government in 2015 could also change the focus for health sector capital expenditure - though this is not likely to be implemented quickly.
List of Report Contents
- Contents Listing
- 1. INTRODUCTION 6
- 2. SUMMARY AND FUTURE PROSPECTS 7
- 3. PUBLIC SECTOR HEALTHCARE IN THE UK 11
- 3.1 NEW STRUCTURE OF THE NHS 11
- 3.1.1 Health and Social Care Act 2012 11
- 3.1.2 New Providers and Clients under the new NHS Structure 13
- 3.1.3 The NHS in an Age of Austerity - Estate Rationalisation 16
- 3.1.4 Future of GP Premises 19
- 4. HEALTHCARE SPENDING IN THE UK 21
- 4.1 NHS FUNDING - ENGLAND 21
- 4.1.2 Primary Care Spending 21
- 4.2 NHS FUNDING - SCOTLAND 22
- 4.3 NHS FUNDING - WALES 22
- 4.4 CAPITAL SPENDING IN THE NHS 23
- 4.4.1 England 23
- 4.4.2 Scotland 23
- 4.4.3 Wales 25
- 4.5 CONSTRUCTION OUTPUT IN THE HEALTHCARE SECTOR 25
- 4.5.1 Outlook for Healthcare Construction Work 26
- 5. PROCUREMENT OF HEALTHCARE CONSTRUCTION WORK 29
- 5.1 PROCUREMENT ROUTES FOR GPS AND CCGS 29
- 5.1.1 Future of Procurement under the new NHS Reforms 30
- 5.2 NHS LIFT 32
- 5.3 EXPRESSLIFT 32
- 5.3.1 Overview 32
- 5.3.2 Investment in LIFT and ExpressLIFT 33
- 5.3.3 Scheme Update and Progress to Date 33
- 5.3.4 Principal Consortia and LIFT Partners 37
- 5.3.5 Future of ExpressLIFT under the New NHS Operating Framework 40
- 5.3.6 Hub Initiative Scotland 41
- 5.4 PROCURE21/PROCURE21+ 44
- 5.4.1 Procure21 44
- 5.4.2 Procure21+ 44
- 5.4.3 Investment in P21/P21+ 45
- 5.4.4 P21/P21+ Project Pipeline 46
- 5.4.5 Principal Supply Chain Partners (PSCPs) 49
- 5.4.6 Future of P21+ under the New NHS Operating Framework 49
- 5.4.7 Procure21 in Wales 50
- 5.4.8 Frameworks Scotland 52
- 5.5 OTHER FINANCE AND PROCUREMENT OPTIONS FOR NHS CLIENTS 55
- 5.5.1 LABVs 55
- 5.5.2 Joint Ventures 56
- 5.5.3 Surplus Land 57
- 6. CONSTRUCTION SUPPLY IN THE HEALTHCARE SECTOR 63
- 6.1 OVERVIEW 63
- 6.2 KEY CONSTRUCTION CONSORTIA IN THE HEALTHCARE SECTOR 64
- 6.3 HEALTHCARE DEVELOPERS AND INVESTORS 67
- 6.4 OPPORTUNITIES/TENDERS 69
- Tables & Charts
- TABLE 1 SUMMARY OF HEALTHCARE SECTOR BUDGETS & MAJOR CAPITAL SPENDING PROGRAMMES 2013-2016 - EXPRESS LIFT, P21, FRAMEWORKS SCOTLAND, BUILDING FOR WALES ETC. 8
- CHART 2 STRUCTURE OF THE NEW NHS POST APRIL 2013 12
- TABLE 3 NHS ENGLAND BUDGET 2014-15 - ALLOCATION OF RESOURCES BY SECTOR/PROGRAMME 16
- TABLE 4 TOTAL SIZE OF NHS ESTATE BY FUNCTION (SQ. M.) 2010-13 - GIFA, OCCUPIED SPACE, UNUSED SPACE, BACKLOG MAINTENANCE COSTS 18
- CHART 5 NHS SCOTLAND ESTATE - AGE OF PROPERTY AS AT 2013 (%) 19
- CHART 6 VALUE OF UK NHS EXPENDITURE 2006 - 2016 (£BN) 22
- TABLE 7 TOTAL HEALTHCARE SPENDING SCOTLAND 2010-16 (£M) - RESOURCE AND CAPITAL SPENDING 23
- TABLE 8 NHS CAPITAL SPENDING - 2007-2016 (£BN) 24
- TABLE 9 HEALTHCARE CAPITAL SPENDING SCOTLAND 2010-16 (£M) - CAPITAL AND RESOURCE BUDGETS 25
- TABLE 10 HEALTHCARE CAPITAL SPENDING WALES 2010-16 (£M) - CAPITAL AND RESOURCE BUDGETS 26
- TABLE 11 CONTRACTORS OUTPUT OF HEALTHCARE SECTOR WORK (PUBLIC/PRIVATE) 2007-2013 (£M) 27
- CHART 12 HEALTH CONSTRUCTION OUTPUT FORECASTS 2008 TO 2018 - BY VALUE (£BN AT CURRENT PRICES) 28
- CHART 13 CAPITAL INVESTMENT IN NHS LIFT 2004-2013 BY VALUE (£M AT CURRENT PRICES) 34
- TABLE 14 NHS LIFT: FORWARD CONSTRUCTION PIPELINE 2014-2016 (SCHEMES, PARTNERS STATUS, CAPITAL VALUES, COMPLETIONS) 36
- TABLE 15 49 NHS LIFT COMPANIES - PROJECT DEVELOPMENTS TO DATE - COMPLETED SCHEMES, CAPITAL VALUES, PIPELINES 39
- TABLE 16 HUB INITIATIVE SCOTLAND - HUBCOS (AREA, CAPITAL VALUES, DEVELOPMENT PARTNERS ETC) 43
- TABLE 17 HUB INITIATIVE SCOTLAND - HEALTHCARE PROJECTS IN DEVELOPMENT - CAPITAL VALUES AND COMPLETION DATES 44
- CHART 18 P21/P21+ - CAPITAL VALUE OF SCHEMES IN DEVELOPMENT 2011-2020 46
- TABLE 19 PROCURE21 - FORWARD CONSTRUCTION PIPELINE 2014-2016 (NUMBER & VALUE OF SCHEMES, STATUS) BY REGION 48
- TABLE 20 PROCURE21+ - FORWARD CONSTRUCTION PIPELINE 2014-2016 (NUMBER & VALUE OF SCHEMES, STATUS) BY REGION 49
- TABLE 21 DESIGNED FOR LIFE - BUILDING FOR WALES2 FRAMEWORK PARTNERS 52
- TABLE 22 FRAMEWORKS SCOTLAND - REGISTERED HEALTHCARE PROJECTS (NO. AND VALUES OF SCHEMES, STATUS) - BY HEALTH BOARD 55
- TABLE 23 CURRENT NHS SURPLUS LAND BY STRATEGIC HEALTH AUTHORITY - AREA (HA), FUTURE USE AND DATE OF DISPOSAL (FROM FEBRUARY 2014) 60
- TABLE 24 LEADING CONTRACTORS IN THE HEALTHCARE SECTOR BY GROUP TURNOVER AND VALUE OF HEALTHCARE PROJECTS WON 2013-14 (£M) 64
- TABLE 25 MAJOR CONSORTIA AND SUPPLY CHAIN/FRAMEWORK PARTNERS IN THE HEALTH SECTOR - BY PROCUREMENT SCHEME 67
- TABLE 26 PRIMARY HEALTHCARE DEVELOPERS & INVESTORS BY NUMBER OF PRIMARY CARE PREMISES OWNED 69
- TABLE 27 HEALTHCARE PROJECTS IN PIPELINE 2014 - CAPITAL VALUES & STATUS 70
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