State of the NHSScotland Estate 2011

1.0 Introduction

1.1 Purpose

A substantial property and asset base worth around £5 billion underpins the delivery of NHSScotland's wide range of healthcare services. This substantial asset base needs to develop to enable it to better support existing services and to reflect evolving new services. Even modest improvements in performance of these assets have the potential to deliver significant benefits for patients and staff as well as efficiency savings. The Scottish Government's strategy for increasing efficiency in the public sector gives further impetus to effectively managing property and asset performance. Managing property and assets more efficiently is a win-win -NHSScotland saves money, which it can invest back into services, while property and assets perform better and more sustainably for the benefit of patients and staff.

It is important that we do not consider assets in isolation from those Facilities Management services that also support the delivery of high quality healthcare. This report therefore also introduces an overview of work underway to consider the potential for improving both the efficiency and quality of Soft Facilities Management Services.

Over recent years there has been significant investment in the modernisation of NHSScotland's estate and related services to support "Better Health, Better Care". It is right that the Scottish Government knows the extent to which this investment is delivering best value and making a real difference to the quality, effectiveness, efficiency and sustainability of services. The Healthcare Quality Strategy for NHSScotland is a development of Better Health, Better Care (2007) which aims to deliver the highest quality healthcare services to people in Scotland and through this to ensure that NHSScotland is recognised by the people of Scotland as amongst the best in the world.

This national 'State of the NHSScotland Estate' report is a new annual report being developed by Scottish Government with support from the territorial NHS Boards and Health Facilities Scotland (HFS). It will report on asset management performance, highlight areas of best practice, and set target areas for improvement which align with the aims of the "Better Health, Better Care" and the "Healthcare Quality Strategy".

This 2011 report is a first step to measure and explore differences in asset performance across NHSScotland, seeking explanation for these differences and highlighting areas for further investigation. The aim being to establish a framework and consistent method for measuring asset performance and efficiency that can be built on in future years so that subsequent reports are able to make a comparative assessment of progress as against that published in the previous reports.

The report confirms good progress in recent years on improving the performance of the estate with pockets of emerging best practice on collaborative working, use of new technology, rationalisation of the estate and new healthcare facilities focussed on patient centred design.

1.2 Scope

This first report focuses on property & estate issues but from 2012 the report will focus on all owned and leased physical assets (property, vehicles, equipment, and IM&T).

1.3 Context

Changes are taking place across the country to make sure that NHSScotland is in the best possible shape to meet future health needs and improve people's well-being. These changes to healthcare services are driven by:

• People living longer. In general, the older a person is, the more ill-health they suffer, and the greater their need for health and social services. Long-term chronic illnesses, such as diabetes and asthma, have replaced infectious diseases as the main work of the health service
• The way that people live is changing, as are their values. More people are living alone and in single-adult households. More women go out to work. This means that there are fewer family carers to look after the increasing number of older people
• People expect more than ever before from our health service - as they do from every other aspect of life. They know much more about health, 'health scares', scientific breakthroughs and 'miracle cures'. Health stories are regularly the first item on the news
• Health and the NHS are of huge political interest. Scottish politicians take a very close interest in how the NHS is run, nationally and locally
• Advances in medical and nursing practice and changing service models enable patients to be treated in new and different ways
• Developments in medical, communications and information technology that make care closer to home a plausible reality and impact on the type and distribution of assets
• National policy and initiatives aimed at making the NHSS more effective and efficient such as Better Health, Better Care: Action Plan and NHSScotland's Quality Strategy.

The evolving patterns of care described in Better Health, Better Care and the three Quality Ambitions of "patient centred", "safe" and "effective" described in NHSScotland's Quality Strategy, clarify the overarching principles that need to guide the further development and management of the NHSS asset base. These are summarised as follows.

• Integration of health, social and individualised care
• Health improvement and inequalities focus
• Large scale application of best practice
• Re-allocation of resources to target need and deprivation.

There can be little doubt that the above will have significant implications for the NHSScotland property and assets and will drive change toward an overall more productive asset base that:

• Supports improved access and service user experience
• Provides accommodation and assets that are clinically suitable, effective and meet or exceed patient and staff expectations
• Minimises risk and promote safety for people who use our services, our staff and visitors and supports improved quality of healthcare
• Disinvests from assets with high operating costs, backlog maintenance requirements, or short remaining life where these do not meet future service requirements
• Seeks optimum solutions through co-location, integration and shared resources across service streams and with our partners in service delivery
• Improves property and asset performance on all key performance indicators
• Releases capital from the disposal of assets that are no longer required for current and future services to reinvest those proceeds for new developments
• Develops / procures flexible accommodation for locality based services
• Integrates services with other health and care facilities wherever possible and thereby improving inter-professional working
• Develops inherent flexibility in assets, to enhance responsiveness to service needs or activity adjustments, for both positive and negative variations
• Provides opportunities to rationalise the existing portfolio of buildings with the aim of reducing estate related ownership costs (energy, maintenance, capital charges etc) and avoiding the need for expenditure on backlog maintenance on buildings that are not fit for purpose.

1.4 Estate Policies and Standards

A number of recently developed national policies and standards will provide a framework for the development of the future property and asset base:

Policy for Property and Asset Management in NHSScotland (CEL 35(2010))

The Scottish Government Health Department's "Policy for Property and Asset Management in NHSScotland" encompasses strategic property and asset management and covers the four key stages in the asset management process:

• Planning
• Acquisition
• Operations and management
• Disposal.

The policy establishes a robust framework against which the planning, delivery, management and disposal of property and other assets is undertaken and assessed. The policy seeks to establish asset management excellence in NHSScotland.

The Scottish Capital Investment Manual (SCIM)

The main purpose of the Scottish Capital Investment Manual (SCIM) is to support the effective delivery of infrastructure programmes and projects within NHSScotland and to provide clarity over the decision making and approvals processes within NHSScotland.

Sustainable Development Strategy for NHSScotland

The Sustainable Development Strategy for NHSScotland draws on the principles and commitments arising from relevant international and national sustainable development and environmental management policies, including those of NHSScotland. It also draws on the Sustainable Development Commission's (SDC) Good Corporate Citizenship Assessment Model (GCCAM), which identified six priority areas for action. This strategy pulls together the key strands of policy, and the opportunities to deliver those policy objectives that will make NHSScotland more sustainable in its delivery of healthcare service

Single Room Policy

NHS Scotland has adopted a policy that presumes that all patients will be cared for in single rooms for all new-build hospitals and a minimum of 50% single rooms for refurbishment projects.

Property Transactions Handbook 2011

NHSScotland's Property Transactions Handbook 2011 promotes sound governance and management for all property transactions. It is intended to ensure that NHS property is bought, sold and leased at a price and on other conditions which are the best obtainable for the public interest at that time.

Improved Asset Management and the Location of Public Sector Organisations

A policy published in March 2009 which applies to Scottish Government departments, including those parts of the Health Service, with a national remit and relates to asset management plans for their office based headquarters accommodation. It includes a presumption in favour of suitable solutions from within existing Government estate.

1.5 Infrastructure Investment

Capital investment in assets in the NHS has more than trebled in recent years from £132.5 million in 2003/4 to £557.4 million in 2010/11. This investment programme has also been supplemented by the use of revenue finance for large infrastructure projects where, in the same period, over £500m of additional investment has been made.

After a lengthy period of significant growth in the level of capital resources available to NHSScotland, the short to medium term outlook will see those capital resources under severe pressure given the 32% real terms reduction in capital resources available to the Scottish Government over the CSR period. There will still be a capital investment in the four years of the CSR of £2 billion. However, in response to the situation the Scottish Government has also put in place arrangements to support a programme of £2.5bn of revenue financed investment across Scotland to boost infrastructure investment. Of this total investment, £750m is to be directed towards projects within NHSScotland whether as standalone Non Profit Distributing (NPD) projects or delivered via the hub initiative.

Given the scarcity of capital resources it is even more imperative that those capital resources available, and revenue applied to support those projects being taken forward using revenue finance, have maximum impact in providing quality health services and at the same time drive and facilitate increased productivity and efficiency in service provision. NHS Boards' Property and Asset Management Strategies will need to clearly demonstrate the need for, and priority given to, investment proposals and the opportunities to maximise the proceeds from disposal of surplus assets to support reinvestment in NHSScotland infrastructure. All proposals for capital investment will be subject to a high degree of scrutiny both locally and nationally prior to approval and NHSScotland will need to ensure it has the necessary skills and capacity to deliver the investment programme as efficiently as possible.

1.6 The Hub Initiative

The new national hub initiative offers a flexible financing and procurement route for community healthcare projects which may otherwise not have happened because of the decline in available capital. A portfolio of healthcare projects to the value £200 million is earmarked for development through hub over the next five years.

The South East and North hubco's are now operational and East Central Territory announced its preferred bidder in November 2011 with financial close expected in February 2012. The West Territory announced its preferred bidder in January 2012 and aims to reach financial close in March 2012. The South West is in competitive dialogue and aims to identify preferred bidder in August 2012 and financial close by end of October 2012.

As the initiative progresses, hub will become a key mechanism for delivering and managing assets more effectively, with continuous improvement leading to better value for money, which will be measured through detailed key performance indicators.

Further details on the Hub Initiative are included in a Best Practice Case Study in this report.

1.7 Frameworks Scotland

A further initiative delivering £400m worth of infrastructure projects is Frameworks Scotland. This is a strategic and flexible partnering/collaboration approach to the procurement of publicly funded construction work and complements other procurement initiatives, including hub, for the delivery of new build and refurbishment health facilities in Scotland.

Further details of Frameworks Scotland are included in a Best Practice Case Study in this report.

1.8 Information Sources

Measuring efficiency and effectiveness of property and assets is a critical component of better asset management and should identify opportunities for maximising the benefits from investment in assets, increased productivity and delivery of savings. It should allow NHS Boards to benchmark property and asset performance against best practice across NHSScotland, informing strategic decisions about assets and their impact on delivery of NHSScotland services. For NHS Boards to succeed in effective management and rationalisation of the estate and assets, access to well defined, consistent and accurate information is fundamental.

This first State of the Estate Report has reviewed and examined the information that is currently available from a number of information sources including:

• ISD Cost Book 2009/10
• 2009/10 National Environment Report and supporting eMART data
• Property and Asset Management Strategies (PAMS) completed by NHS Boards
• A high level estate information proforma completed by NHS Boards for this exercise
• Annual Reports and Accounts of NHS Boards 2009/10.

Efficient property and asset management depends on having good information available and being able to interpret it meaningfully and use it effectively. As this first report has been developed it has become clear that there is not currently a consistent format of information held and that improvement in accuracy will be achieved when the consistency is better. Work will be undertaken to make the necessary adjustments