Contact: Denise Holden ex 7338

e-mail: [email protected]

1. Summary and Purpose

1.1. The purpose of this report is to alert Members to proposals from the NHS to vary or develop health services provided to people living in the area of the Committee.

1.2. Proposals that are considered to be substantial in nature will be subject to formal consultation. The nature and scope of this consultation should be discussed with the Committee at the earliest opportunity.

1.3. The response of the Committee will take account of the criteria adopted by the Committee on 29 July 2003 with particular emphasis on the duties placed on the NHS by Section 11 of the Health and Social Care Act 2001.

1.4. The report and recommendations support the delivery of Aim 5 (Improving Services) of the Corporate Strategy.

2. Winchester and Eastleigh NHS Trust: Closure of the Mount Hospital on Safety Grounds

2.1. At its last meeting the Committee was advised of the next steps to be taken in relation to the reprovision of the rehabilitation services provide at the Mount Hospital. In contributing to the consultation process the Working Group, on behalf of the Committee, received an assurance from the Eastleigh and Test Valley South PCT that the services provided at the Mount would continue until new arrangements were in place.

2.2. Further to a Board meeting on the 30 June, Winchester and Eastleigh Healthcare Trust contacted the lead officer to say that the Mount Hospital would be closing on the grounds of patient safety. The date given for this closure was the end of August

2.3. Comment on these proposals has been invited from HCC Social Services, WEHT Patient Forum, Mid Hants PCT Patients Forum, ETVS Patient Forum and Eastleigh Borough Council.

2.4. A number of factors need to be considered by the Committee including

_ The adequacy of case for closing the Mount without formal public consultation so quickly after the formal consultation on the provision of rehabilitation services had been completed

_ The impact of the proposals on the partner organisations affected

_ The impact of the proposal on a vulnerable patient group, including access and transport considerations

_ The level of care that will be available should the move progress and any risks for patients being cared for in an acute hospital environment.

2.5. The Committee has rearranged the meeting on 27 July to allow for an in-depth scrutiny of the decision by the Trust. The background papers for this are attached at item 8, together with a briefing for members.

3. Reprovision of Acute Inpatient Mental Health Services: Hampshire Partnership

3.1. Hampshire Partnership has alerted the Committee to proposals to re-provide adult mental health inpatient provision on thee Royal South Hants Hospital site.

3.2. The outline business case is now being developed and forms part of an integrated mental health strategy to deliver the NHS Plan and the NSF for Mental Health through a modern local service that provides high quality care for patients in Southampton and the southern parishes of Eastleigh.

3.3. This service is relevant to Hampshire residents living in the southern Eastleigh area, who constitute approximately 15% of the workload of the department.

3.4. The Executive summary of the proposal is attached at Appendix One

4. Hampshire Ambulance NHS Trust: Strategy Development- Comments to the Leader of Hampshire County Council.

4.1. Further to an invitation from the Leader of Hampshire County Council to comment on the strategy document produced by Hampshire Ambulance, the Chairman, in consultation with the Chief Executive provided the feedback attached at Appendix Two

4.2. This was accepted and sent to the Trust

Recommendations

1. Winchester and Eastleigh NHS Trust: Closure of the Mount Hospital on Safety Grounds

a. The Committee considers how it wishes to respond to the Trust (see item 8)

2. Reprovision of Acute Inpatient Mental Health Services: Hampshire Partnership

a. A joint committee will be established to consider any substantial variation or developments in these services.

3. Hampshire Ambulance NHS Trust: Strategy Development- Comments to the Leader of Hampshire County Council

a. The Committee notes the Chairman's response to the Leader

Section 100 D - Local Government Act 1972 - background papers

The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.

NB the list excludes:

1. Published works

2. Documents which disclose exempt or confidential information as defined in the Act.

None

Hampshire County Council Appendix One

Health Review Committee: 27 July 2004

Proposal to Re-provide Acute Inpatient Mental health Services: Hampshire Partnership

EXECUTIVE SUMMARY

INTRODUCTION

1. Hampshire Partnership NHS Trust is pleased to submit this outline business case (OBC) for the development of a new adult mental health acute inpatient hospital providing 60 acute beds and 12 intensive care beds on the Royal South Hants Hospital site.

2. The proposals made here, the capacity needed, and the model of care presented as the strategic vision for the future of the trust have been developed during 2003 in full consultation with the commissioning primary care trusts, voluntary organisations, users and carers and other key stakeholders. All these organisations support this proposal and recognise it will make a significant and essential contribution toward adult mental healthcare in this region.

3. The investment forms part of an integrated mental healthcare strategy to deliver the NHS Plan, the National Service Framework for Mental Health, modernise the local NHS and provide excellent services for patients in Southampton and the southern parishes of Eastleigh.

4. Upon approval of this business case, funding options will be examined by the trust to determine the best route to achieve value for money be it through the public sector, private finance or NHS LIFT.

5. West Hampshire NHS Trust will assume the responsibility for mental health and learning disability services within the North Hampshire region on 01 April 2004 which were previously managed by Surrey Hampshire Borders NHS Trust. From 01 April 2004, West Hampshire NHS Trust will be known as Hampshire Partnership NHS Trust. For the purpose of this business case, the new name will be used throughout.

BACKGROUND

6. Since it first opened in 1979, the Department of Psychiatry has been plagued by inadequacies in design that prevents the delivery of a modern mental healthcare service. It is widely acknowledged that the facilities at the Department of Psychiatry are poor and not capable of allowing an appropriate healing environment to be created.

7. The entire environment of the Department of Psychiatry is deemed by staff, users and carers and many other stakeholders to:

· Be unsuitable and inflexible design

· Not meet safety, privacy and dignity standards

· Foster a very negative image as an institution to the perception of its users, staff and other agencies

· Have problems of drug abuse and security problems

· Have an unsuitable external environment, e.g. no gardens

· Provide inadequate staff and visitor parking

8. Over the past five years, there have been a number of significant changes in central NHS policy including the introduction of the NHS Plan and the National Service Framework for Mental Health which have called for radical changes to the way services are currently delivered. For the trust and strategic health authority to meet these requirements in both the short and longer term, a new model of adult mental acute inpatient healthcare is paramount.

9. The trust intends to reprovide the Department of Psychiatry's acute inpatient adult mental healthcare services. This will enable these services to be raised from a level of an outdated facility fostering a counter therapeutic environment, to a modern and exemplar service that provides the quality of care expected by service users, friends and relatives of service users, clinical staff, the public and government.

PROJECT AIMS

10. The key investment objective of this project is:

The reprovision of acute inpatient adult mental healthcare services in Southampton comprising 60 beds for acute care use and 12 beds for psychiatric intensive care.

11. The investment objective is supported by the following project aims:

_ Provide a centre of excellence in patient care

_ Create a focus for world class teaching, training, education and research

_ Improve accessibility to services for patients and services users

_ Create a therapeutic and flexible environment from which high quality patient care can be provided

_ Contribute to the wider community's plan for the regeneration of Southampton

_ Work with all partners in and users of Hampshire Partnership NHS Trust's whole health economy to provide an integrated model of care

_ Make the most efficient use of resources

12. Each of the above project aims are supported by a number of project objectives which are detailed in Section 11 of this business case.

NEW MODEL OF CARE

13. The new model of care which is centred on programmes to avoid admissions to the inpatient unit is contained in Appendix 1.

14. As will be documented in this business case, the service objectives of this reprovision scheme can only be met through a comprehensive new model of care which will:

· Reshape bed management, primary care support, community mental health, crisis resolution, consultation/liaison service, early intervention in psychosis, alcohol and drug service, supported accommodation, day hospital services, and rehabilitation services in order to allow for a reduction in bed numbers

· Provide four 15 bedded units in a single storey adult mental health complex on the grounds of the Royal South Hants Hospital

· Provide one 12 bedded psychiatric intensive care unit

OPTION APPRAISAL

Developing a short list

15. From a long list of 21 options, 18 options were discounted due to the unacceptability of the option for future service provision, the strategic fit of the option or a lack of available commercial or NHS land (outside the Royal South Hants Hospital site) on which to construct a new facility.

16. The length of the long list of options and the variants of options 6 and 7 illustrate the complexity of the option selection process. Central to this were the variables of Baytree House and whether to utilise a full or reduced schedule of accommodation which needed to be tested to ensure clinical appropriateness.

17. The project board discounted any option which utilised a full schedule of accommodation. A reduced schedule of accommodation does not impact bed numbers, but certain clinical and non-clinical areas have been either combined, eliminated or made smaller. Having a reduced schedule of accommodation is preferred due to site restrictions and cost.

18. The project board determined that any long listed option which left Baytree House insitu was to be discounted owing to the fact that retention of Baytree House is not in the strategic plan of either Hampshire Partnership NHS Trust, the local primary care trusts, Southampton University Hospitals NHS Trust and the Hampshire and Isle of Wight Strategic Health Authority. Hampshire Partnership NHS Trust will work with its partners to relocate the current occupants of Baytree House into alternative accommodation.

19. Options contain multi storey and single storey designs. In the context of patient wards, multi storey incorporates wards on multiple levels whereas single storey designs place wards entirely on the ground floor but with other services on upper floor(s).

	Option	Discounted	Short listed
1	Do nothing - no further investment in DoP	X
2	Do minimum		_
3	Transfer acute inpatient adult mental health service to other NHS or community providers	X
4	Manage all acute illnesses within community based services	X
5	Refurbish the DoP	X
6a	Demolish DoP and new build multi storey unit on RSH site	X
6b	Leave DoP and new build multi storey unit on the RSH site with a full schedule of accommodation and incorporating the Baytree House site	X
6.b.1	Leave DoP and new build multi storey unit on the RSH site with a reduced schedule of accommodation and incorporating the Baytree House site	X
6.b.2	Leave DoP and new build multi storey unit on the RSH site with a full schedule of accommodation and leaving Baytree House insitu	X
6.b.3	Leave DoP and new build multi storey unit on the RSH site with a reduced schedule of accommodation and leaving Baytree House insitu	X
6.b.4	Leave DoP and new build multi storey unit on the RSH site with a reduced schedule of accommodation and incorporating the Baytree House site using the gradient of the site to obtain best access to external areas from the ground and first floor		_
6c	Refurbish portion of DoP and new build smaller multi storey unit on RSH site	X
7a	Demolish DoP and new build single storey complex on RSH site	X
7b	Leave DoP and new build single storey complex on RSH site with a full schedule of accommodation and incorporating the Baytree House site	X
7.b.1	Leave DoP and new build single storey complex on RSH site with a reduced schedule of accommodation and incorporating the Baytree House site	X
7.b.2	Leave DoP and new build single storey complex on RSH site with a full schedule of accommodation and leaving Baytree House insitu	X
7.b.3	Leave DoP and new build single storey complex on RSH site with a reduced schedule of accommodation and leaving Baytree House insitu		_
7c	Refurbish portion of DoP and new build smaller single storey complex on RSH site	X
8	New build on alternative single site	X
9	New build on alternative multi sites	X
10	Multi site refurbishment	X

Benefits appraisal

20. The table below summarises the results of the weighting and scoring of each short listed option. The full benefits appraisal is contained in Appendix 5.

Option	Benefit score
2	364
6.b.4	838
7.b.3	787

21. The appraisal showed that:

· Option 6.b.4 is the preferred option on a non financial basis as it makes best use of the available site and incorporates a reduced schedule of accommodation without sacrificing clinical outcomes

· Option 7.b.3 has been short listed because it provides a comparator against the demolition of Baytree House and there would be less disruption to staff and services as they wouldn't have to relocate from Baytree House

· Option 2 performed poorly against all criteria. Its low scores indicate its inability to support the modernisation agenda and the needs of patients

SUMMARY OF FINANCIAL ANALYSIS

Capital costs

22. The following table summarises the capital costs of each short listed option.

Option	Capital cost £'000	Rank
2	14,907	1
6.b.4	26,234	2
7.b.3	27,634	3

23. The table below summarises the results of the economic appraisal for all the options. From the table it can be seen that the option with the lowest equivalent annual cost (EAC) is option 2, do minimum. However, this option delivers an unacceptable level of benefits as indicated by the benefits points score.

24. Option 6.b.4 scores the highest level of benefits and the lowest cost per benefit point at £6.21k per benefit point. This option is 9% cheaper per benefit point than option 7.b.3. The preferred option is therefore option 6.b.4.

Option	Equivalent	Benefit	Ranking	Cost per	Ranking
	Annual Cost	Points		Benefit point
	£'000			£'000
2	4,989	364	3	13.70	3
6.b.4	5,203	838	1	6.21	1
7.b.3	5,321	787	2	6.76	2

Project breakdown costs

25. This project is made complex by issues of site ownership. An allowance has been made within each option for impacts of the new scheme on the site. The following information summarises the project breakdown costs associated with each option at MIPS 395 with inflation outturn. The full table is contained in Appendix 8.

Option 2	Cost (£)
Building	14,907,419
Enabling	0
Demolitions and site adaptation	0
Site adaptations (excluding Boulevard)	0
Car park	0
Total	14,907,419
Option 6.b.4	Cost (£)
Building	22,231,684
Undercroft car park	836,822
Temporary car park	246,124
Enabling	2,558,233
Demolitions	360,982
Total	26,233,845
Option 7.b.3	Cost (£)
Building	23,052,723
Multi storey car park	3,079,059
Enabling	1,141,422
Demolitions	361,084
Total	27,634,288

THE PREFERRED OPTION

26. The preferred option for the reprovision of the Department of Psychiatry has been determined to be option 6.b.4 - leave the existing Department of Psychiatry building for use by another service and provide a new build multi storey mental health complex on the Royal South Hants Hospital site which will consist of:

· A designated self-contained site for acute inpatient adult mental health services on the Royal South Hants Hospital site

· Two 15-bed male wards with single rooms and ensuite facilities

· Two 15-bed female wards with single rooms and ensuite facilities

· One 12-bed psychiatric intensive care unit

· A smaller schedule of accommodation for non clinical areas

· Maximising the use of the site gradient to provide ease of access to external facilities for ground and first floor patients

27. The preferred option delivers the following key benefits:

· Site master planning and comprehensive design development will provide a dedicated purpose-built solution to meet the safety and security needs for service-users.

· Purpose-built facilities will be delivered for patients, within wards and a PICU with shared "central facilities"

· The site has had a long association with mental health services and is a well-established part of the local community

· The local community has a good range of services and amenity facilities that will potentially be helpful in aiding service user rehabilitation

· The site is well located in respect to transportation links - close to national and regional strategic road and rail infrastructure and well linked to the local public and road transport infrastructure

28. The new mental health complex will be designed in consultation with users, carers and staff to meet the latest national guidance for mental health facilities and among other things, will provide:

· The ability to alter ward configuration based on the number of male and female patients

· As much privacy for patients, visitors and staff as possible

· Central therapy areas

· Internal and external recreation areas

· Individual ward gardens

· An ECT suite

· Improved staff facilities

· Modern catering arrangements

· Guest accommodation

29. The preferred option 6.b.4 assumes that wards A, B, C and Mayflower will be reprovided in new configurations and bed numbers. The reduced schedule of accommodation will incorporate the Bay Tree House site using the gradient of the site to obtain best access to external areas from the ground and first floors.

30. This business case demonstrates that the new provision will meet all current national guidance and offer the best strategic fit within the local health economy.

31. Option 6.b.4 is the only option that delivers all the benefits required and is ranked 1 on cost per benefit point. This option requires £26.2 million of capital resource. It is highly unlikely that this amount of capital will be made available through HM Treasury funding. Private finance alternatives are being explored by the trust.

32. The additional annual revenue required stabilises from 2008/09 onwards at £1.5 million. The additional cost arises from the extra capital charges and higher costs for other buildings related expenditure. All direct patient care costs including staffing remain as now with no increase.

33. This additional cost falls in the ratio of 85% to Southampton City PCT and 15% to Eastleigh TVS based on bed numbers. The local health community recognises this development as a very high priority. Consultations regarding the funding of the increased cost continue with the commissioners of the service. The following table indicates the revenue cost required for option 6.b.4 and indicates it is cheaper than option 7.b.3.

Option	Recurring	Rank
	Revenue
	£'000
2	5,534	1
6.b.4	6,117	2
7.b.3	6,262	3

NB: The recurring revenue above is inclusive of the existing investment of £4.6 million. (i.e. £4.6m+£1.5m=£6.1m as above)

34. This development will represent an additional 1% turnover to the trust and an increase in fixed asset valuation of about 30% assuming a conventional procurement with the resulting assets on the balance sheet. As already indicated such a procurement route is extremely unlikely.

Optimism bias

35. Historical data on major capital schemes have shown a tendency for the public sector to be over optimistic on their assessment of capital costs and programmes. To address these potential under-estimations of the actual outcomes, an optimism bias exercise has been undertaken by the trust and external quantity surveyors on each of the short listed options for the development. This assessment has been undertaken in accordance with the Supplementary Green Book Guidance and follows the format prepared by Mott MacDonald in their Review of Large Public Procurement in the UK (2002).

36. Optimism bias has been considered for the three short listed options. The optimism bias for this type of scheme is typically 24% but has been mitigated using the optimism bias calculation to 9.67%, 5.95%, 8.02% for options 2, 6.b.4 and 7.b.3 respectively.

37. Optimism bias calculations have been prepared for each of the options to address general risks not included within the planning contingencies. The risks identified in the optimism bias calculations will be monitored and addressed to ensure that at full business case stage theses risks are removed and as such are not included in the capital costs but are shown to permit comparison and evaluation of the individual options.

PURCHASER SUPPORT

38. This principle of this OBC is fully supported by all members of the local health community and by a wide range of stakeholders across the community, including local government and social services. This is not only because of the well-established service need but also because, in estate strategy terms, vacating the current Department of Psychiatry creates potential for a number of other service rationalisations of benefit to the wider health community.

39. Formal approval will be sought from Southampton City and Eastleigh and Test Valley South PCTs in April 2004.

PROCUREMENT STRATEGY

40. The trust is actively working toward identifying the most favourable procurement route. Details of the procurement strategy are contained in Section 17. The options being considered are:

· Private Finance Initiative (PFI)

· NHS LIFT

· ProCure 21

· HM Treasury funding

41. The trust is engaged in determining the best procurement option and the effect it will have on all stakeholders.

PROGRAMME SUMMARY

42. The following table outlines the current programme schedule:

Key Milestones	Date
Operational 60 bed unit and 12 PICU bed unit	June 2007
Commissioning	February 2007
Construction complete	November 2006
FBC approval by SHA and PCT	July 2005
OBC approval by SHA and PCT	May 2004
OBC receives Trust Board approval	March 2004
OBC receives project board approval	February 2004
Gateway review	May 2004
AEDET review	March 2004
NEAT review	April 2004

KEY CONSEQUENCES OF NOT PROCEEDING

43. The basis of adult mental health care for Southampton and the southern parishes of Eastleigh is centred on this scheme. Should this OBC not be approved, clinical services will have to remain located in the existing Department of Psychiatry building dealing a severe blow to the Government's objectives within the National Service Framework for Mental Health which states,

"The Government is committed to do whatever is necessary to deliver a modern and dependable health service, fit for the new century. Mental health services and the professionals who provide them will get the attention and resources they need."

44. Key consequences of not proceeding include:

· The absence of modern facilities means that patients will continue to be cared for in poor quality facilities, without adequate privacy (including gender separation), and which do not meet national standards

· Services will continue to be dependent upon outdated and potentially unsafe buildings with high levels of backlog maintenance and risk

· Service standards as required by the NHS Plan and NSF would not be achieved

· Substantial funding would have to be obtained to clear backlog maintenance and improve facility condition

· Staff morale would continue to be low, increasing staff turnover and recruitment difficulties.

· There would be limited recruitment appeal for new staff and Royal College accreditation could be withdrawn

· The Department of Psychiatry building is not released to other users

CONCLUSIONS

45. This OBC documents a compelling case for capital investment in a new acute inpatient adult mental healthcare complex located on the Royal South Hants Hospital site. The costs associated with the preferred option are shown below.

Cost	£'000
Equivalent annual cost (EAC)	5,203
Capital	26,234
Recurring revenue	6,117

46. As well as providing value for money through refocusing resources, the new service strategy will achieve a significant reduction in exposure to clinical, financial and health and safety risks for the trust through achieving compliance with national and local targets. This OBC demonstrates that:

· Modern facilities will enable more effective use of human resources

· Improved recruitment and retention rates will lead to a reduction in costs associated with high staff turnover

· Expenditure within partnership organisations may be reduced through joint service provision, thereby preventing duplication of assessment

· Improved value for money to public sector will be achieved via, for example:

_ Alternative approaches to capital funding

_ Reduced out of area treatments, with associated high costs

_ Reduced hospital admissions & early discharges

_ Shared use of facilities, with extended hours of service provision

_ Performance indicators informing continuous improvement

47. Delivering this OBC will:

· Support the modernisation agenda of the NHS

· Result in a significant improvement in the patient experience

· Support an improved quality of mental healthcare

Hampshire County Council Appendix Two

Health Review Committee: 27 July 2004

Response to Hampshire Ambulance: Comments on draft Strategic Plan

Your views are important, and will help the Trust to plan a better service for Hampshire. Please complete the following questionnaire by noon on Wednesday 16 June 2004 with your comments on our Plan. Please return it via e-mail or post to the address overleaf.

The Plan In General

Please add any further comments:

Other

Please add below any additional comments which you would like to make. Please use a continuation sheet if necessary.

It is unfortunate that the short-time frame for responding to this document has limited the discussions that we would have liked to have with key stakeholders, particularly PCTs. Although we have been able to secure initial feedback from social services in formulating this response it is not possible to assess the extent of engagement with local people or key stakeholders in drawing the Plan together. Links with the County Council transport services would be one example of partnership working that needs to be established but there are others implicated in the proposals set out at 5.2. The Trust needs to initiate work with local service providers and commissioners across the health and social care economy as a matter of urgency.

It is important to acknowledge the progress made by the current management team in responding to a challenging report from CHI. When the Chairman of the Health Review Committee visited the Trust late last year it was clear that appointments were still being made to key roles and significant progress had been made in areas such as clinical service development. At a recent seminar hosted by the Committee, members were very interested in the early work initiated in relation to `STEPS'.

Having said this we are not yet confident that the direction of travel that the strategy sets out will be sufficient to resolve the financial pressures of the Trust, particularly given the difficulties facing the wider health economy. In this environment it is essential that new areas of work (such as unscheduled care) are designed in partnership with key stakeholders and appropriately funded by PCTs. It is not clear from the document if this is the case.

Although the aspirations of the Trust for diversifying its activities to include health and safety training and other initiatives are of interest these are not substitutes for the adequate funding of the services provided by PCTs. We are particularly concerned that there seems to be little clarity regarding the core services to be provided by the Trust. The service vision set out at 4.1 for example makes no reference to the provision of timely, high quality emergency and urgent transport. The diversification strategy referred to at 5.5.1 needs to be amended to ensure that it not interpreted as an alternative way of obtaining funding for essential emergency and other transport services.

There is no information in the document outlining the level of need of local people for emergency, urgent and non-emergency transport, or the impact that this may have on improving access to services. The analysis set out in 3.4 does refer to the range of work undertaken by the Trust but there is no detail of the demographic trends or other demands on the ambulance service. If training is to be provided to enhance the role of paramedics as emergency practitioners then the contribution that these skilled staff can make needs fully exploited as a resource for local people. Hampshire is a diverse county and problems or `hot spots' need to be understood and managed to ensure that there is a consistent response to changes in patterns of demand. Similarly we would expect that demand would be regularly reviewed to ensure that services were being used appropriately.

Resources remain an on-going issue and the extent to which the Plan is supported by PCTs needs to be defined, as does the contribution that the various strategies will make to the delivery of `HealthFit'. We noted for example that 5.8 refers to the fact that the Trust is not currently included in some PCT/Trust modernisation projects and funding priorities. If alternative arrangements exist, as intimated at 5.2, then the incentive for moving from these to support the Trusts' aspirations need to be specified. The consequences of failing to secure the funding required are clearly set out at 7.6 as a key risk and it would be helpful to have confirmation that the wider health economy supports the strategic plan set out by the Trust.

The new GP contract will mean that there will be changes to out of hours arrangements and new models of care, such as walk-in centres and `Hospital at Night' are beginning to emerge. These do however need to be linked to provide a solution across the health economy. Emergency Care Networks provide for a system wide solution to dealing with these and other issues across organisational boundaries and it may be helpful for the strategic plans of the Trust to be more explicit about these links locally.