FINANCE: Strategic health authorities will this week be asked to endorse the business case for a £278m rebuilding of the foundation’s hospital and grounds.

As a foundation trust, Alder Hey does not require SHA approval for the “appointment business case” for its “Children’s Health Park” redevelopment, a paper that will be put to the NHS North of England SHA cluster this week explains. The SHA role is to endorse the geographical location and “strategic fit” of the proposals, which must win approval from the Department of Health and the Treasury.

Approval of the ABC enables the trust to formally select its ‘preferred bidder’ and finalise the design, contractual terms and financial model with that one bidder.

The document shows that the foundation now expects to raise just £104m of the £278m capital costs of the scheme through the private finance initiative, compared with £209m of the estimated £280m costs in its earlier “outline business case”.

The latest version of the plan includes the Trust making £72m “bullet” cash payment into the PFI element of the scheme and investing a further £10m from its cash balances into the retained estate element of the scheme. The trust is planning to use the Foundation Trust Financing Facility (FTFF) loan of £40m to generate the remaining cash for the retained estate and equipment.

“This loan has been considered by the FTFF Investment Committee and received strong support,” the paper states. Alder Hey also plans to raise £11.5m through charitable donations to support the capital costs of the scheme.