Bridge building

Published: 03/04/2003, Volume II3, No. 5849 Page 14 15

Some of PFI's most ardent supporters gathered to share the lessons of recent builds and look to an even brighter future. Paul Stephenson was there

Although many in the health service remain uncomfortable with private finance initiative schemes, some of those intimately involved in developing the schemes are positively evangelical.

Not only do they believe PFI is 'a good thing', they see it as a system that can be made even better if a number of key lessons are learned.

A joint HSJ conference on successfully managing PFI in healthcare construction last week heard from managers and construction firms on the problems that need to be tackled and the improvements that could make the schemes even more successful.

NHS Estates head of construction services Peter Woolliscroft made clear the scale of work to be done in the service and the role that PFI schemes could play, pointing out that one quarter of his buildings will be replaced or upgraded within 10 years.

He said one advantage of PFI was the sense of certainty in many building schemes that had often been absent before: 'You now have a guaranteed maximum price. . .and you also have a guaranteed delivery time.'

He also highlighted the crucial role of design and the importance of inclusivity from the projects' genesis. Mentioning Prince Charles as an 'NHS design champion', Mr Wooolliscroft said there should now be 'board level design champions for every trust, including primary care trusts'.

The issue of clinical involvement in the design of hospital buildings was highlighted by Calderdale and Huddersfield trust associate director of operations and facilities Keith Seymour. He said it is 'essential to get an informed, involved clinical team behind you'.

Peter Burroughs, project director for the enormous PFI scheme at University College Hospitals trust in London, spoke of a similar involvement: 'We have had over 200 of our most senior doctors and other health professionals working on the design process.'

Although Mr Seymour made it clear that clinical involvement had helped his trust's scheme, he said there had been many problems with its development.

The project had 'represented about a 30 per cent reduction in our [bed] component' and there had been a lot of negative feeling locally about it.

'The bed reduction was a very, very serious issue for us to deal with. The press and public relations issues about producing a major development need very, very careful handling. They [local people] very much resented what we were doing.'

However, he stressed that claims that bed reductions were driven by the PFI approach were 'totally fallacious'. Now-revised central pay had been the culprit.

Mr Seymour summed up his experience: 'For most people this will be the most demanding thing they will do in their working lives.'

National Audit Office head of PFI development David Finlay discussed a number of lessons that had been learned from previous schemes, both within the health service and elsewhere, and said the changing nature of contracts was crucial.

'PFI contracts are not going to stay fixed in stone, ' he said. 'There is already early evidence of that.

Over half of PFI contracts had been changed in the first couple of years. Dealing with change is going to be a very big issue in PFI projects.'

He said other important elements were price and the complexity of the finances. 'Price is important, but lowest price is not always best.'

He also warned: 'Beware complex financial models. The more complex you make the financial model. . . the greater the risk of introducing errors.' He pointed out that a National Audit Office report on one PFI scheme found two financial mistakes that had eliminated two-thirds of the listed cost savings. His main lesson? 'If you are doing it for the first time, draw on the experience that is available.'

Although PFI was enthusiastically promoted, the advantages of the NHS LIFT (local improvement finance trust) scheme for smaller public-private projects were given even stronger backing.

Newham primary care trust chief executive David Stout said it was the right thing for the work his PCT needed to do: 'The projects are very small beer, and LIFT offers the opportunity to bundle things together. LIFT was pretty much the only thing on offer.'

East London and the City LIFT project director Marion Rex said: 'LIFT is the true public-private partnership.

'I have been involved with PFI before. . . but LIFT is the public side and the private side aligning their common interests by setting up a company where they both have shares.'

LIFT, however, had not been something everyone had understood when the scheme was launched, she said.

'We had 70 expressions of interest. One of those was a company that made lifts.'

So, what of the future? Henry Stanley, facilities general manager of construction firm Carillion Services, predicted that PFI could only be a halfway house.

He forecast: 'There will come a time. . . when the private sector will be asked to provide a hospital.We should be aware that at some time that will happen.'