Chamber and committees

Responsibilities regarding insurances for the Royal Infirmary of Edinburgh contract are set out in clause 26 and schedule 16 of the project agreement, which is publicly available on NHS Lothian’s website at:

http://www.nhslothian.scot.nhs.uk/OurOrganisation/KeyDocuments/Pages/RIE-PFI-Agreements.aspx

The insurance payment is an obligation on the project company to organise, and forms part of the unitary payment. Until recently NHS Lothian were paying a top up contribution. However, there is no such charge now as the board has agreed to a corporate Consort healthcare arrangement and this has reduced the policy cost considerably, and no longer requires a separate payment.

The Scottish Government does not hold details of the costs of insurances paid for by Consort.

Initial costs for these services are as set out in schedule 17 to the project agreement. A copy of the project agreement is publicly available on NHS Lothian’s website at:

http://www.nhslothian.scot.nhs.uk/OurOrganisation/KeyDocuments/Pages/RIE-PFI-Agreements.aspx

Detailed cost information for these services is not held by the Scottish Government. Management of the contract is the responsibility of NHS Lothian, who hold the cost information on the contract.

Detailed cost information for the Royal Infirmary of Edinburgh contract is held by NHS Lothian. The Scottish Government does not hold this information centrally.

I refer the member to the answer to question S4W-21361 on 5 June 2014. All answers to written parliamentary questions are available on the Parliament’s web site, the search facility for which can be found at:

http://www.scottish.parliament.uk/parliamentarybusiness/28877.aspx.

Under the terms of the project agreement the costs of the soft facilities management (FM) services within the Royal Infirmary of Edinburgh (RIE) are benchmarked against the cost of comparable services within PFI/PPP and conventionally funded hospitals in the UK on a five year cycle. The benchmarking exercise in 2008 found the overall cost of the FM services to be in line with comparison sites. The NHS Lothian board accepted a recommendation from a benchmarking group, which included a staff side representative, to continue with the existing provider of FM services and not to insist upon a market test and tendering exercise of the soft FM services.

In 2013, a significant reduction to the cost of the soft FM services at the RIE was negotiated. This reduced soft FM cost will be in place until the next benchmarking exercise, scheduled for 2018.

In addition, some earlier PFI projects, in particular the Edinburgh Royal Infirmary contract, have been refinanced, delivering an in-year benefit and a recurring saving of £1.5 million, together with contract improvements.

Hard FM services are not subject to review within the contract, but NHS Lothian understands the costs to be average when compared to other contracts of this generation and size.

The Scottish Government do not hold performance score information regarding the Royal Infirmary of Edinburgh PFI contract. Monitoring and managing performance on this contract is the responsibility of NHS Lothian, who hold the performance data on the contract.

The dispute resolution processes for the project agreement over the Royal Infirmary of Edinburgh are set out in clause 41 and schedule 21 of the project agreement, which is publicly available on NHS Lothian’s website at:

http://www.nhslothian.scot.nhs.uk/OurOrganisation/KeyDocuments/Pages/RIE-PFI-Agreements.aspx

Management of the Royal Infirmary of Edinburgh PFI contract is the responsibility of NHS Lothian.

In addition to the self-monitoring and self-reporting that is the contractual responsibility of Consort, NHS Lothian has established its own internal review team. There are around 80 random audits conducted monthly covering all the services. NHS Lothian is reassured that the self-monitoring aspect is relatively robust as there are only a few discrepancies when cross checking to the contract self-monitoring performance. To review the performance NHS Lothian established the Score Card Review Group, a forum to check and verify performance.

Consort’s responsibilities regarding self-monitoring and self-reporting compliance with performance criteria are set out in clause 21 of the project agreement, which is publicly available on NHS Lothian’s website at:

http://www.nhslothian.scot.nhs.uk/OurOrganisation/KeyDocuments/Pages/RIE-PFI-Agreements.aspx

Management of the Royal Infirmary of Edinburgh contract is the responsibility of NHS Lothian. The board takes a very active role in managing this contract. It has employed its own management team, complete with auditors who carry out random checks on the facilities, with approximately 80 audits carried out every month.

The terms of reference and membership of the group are as follows:

Title: PPP/PFI Operational Management Advisory Group

Accountable to: The Strategic Facilities Group (SFG) of Health Facilities Scotland

Role of the advisory group: The Advisory Group will act as a forum of expertise and exchange of intelligence on the operational management of PPP/PFI contracts across NHS Scotland, sharing best practice and where appropriate advising on policy change.

Remit of the advisory group: The PPP/PFI Operational Management Advisory Group (Advisory Group) will:

Act as the focus for advice on the operational management of PPP/PFI contracts to the SFG.

Be the forum for the exchange of information on the operational management of PPP/PFI contracts.

Identify and communicate best practice in the operational management of PPP/PFI contracts.

Identify the necessary skill set for the operational management of PPP/PFI contracts.

Provide access to appropriate education and training for those involved in the management of these contracts.

Identify areas which should be pursued with SPVs to improve the efficiency of the existing contracts.

Ensure SFG is advised of developing issues relating to the delivery effective patient services on PPP/PFI sites.

Consider changes in legislation/guidance which will impact on the services delivered by the contractors and ensure a consistent, national approach is taken.

Examine best practice across the public sector and where appropriate recommend its implementation.

Advice on the involvement and appointment of professional advisors to the contracting process, where possible, maximising the purchasing power of NHS Scotland.

Membership:

Chair of group: The Advisory Group will be Chaired by a member of the SFG with experience in managing PPP/PFI contracts. The Chair will be elected by the members of SFG.

Decision making: The Advisory Group does not have authority to make binding decisions which could impact on delivery or cost of services provided by the SPVs.

Any recommendations made by the Advisory Group which impact on the service will need to be approved by the SFG or the appropriate Board.

The Advisory Group can elect a Vice-Chair.

The Advisory Group can establish working groups to carry out specific tasks related to the Advisory Group’s work plan. These working groups will report to the Advisory Group.

Frequency of meetings: The Advisory Group will meet at least bi-monthly.

Papers: Papers will be submitted to the Chair of the Advisory Group 10 working days prior to the meeting and issued 7 working days before the date of the meeting.

Papers can only be tabled or other business discussed with the approval of the Chair.

LIFESPAN OF GROUP: The Advisory Group will be a standing committee of the SFG.

The group has met on the following dates:

28 March 2013

3 June 2013

19 August 2013

4 October 2013

4 December 2013

26 February 2014

26 April 2014

There are no current plans to publish agendas and minutes of these meetings.

All of the £1.3 million annual saving identified in 2013-14 relates to NHS Lothian’s contract for the Edinburgh Royal Infirmary.