Highland NHS Board
5 June 2007
Item 8.4
NHS HIGHLAND CAPITAL PLAN 2007/2008 – 2011/2012
Report by Director of Planning and Performance and Head of Financial Planning
The Board is asked to:
Ø Approve the forward Capital Plan as detailed in the attached tables, taking account of the background and financial context as described.
1 INTRODUCTION
The attached papers present a proposed Capital Plan for NHS Highland. They reflect proposals for “Northern” Highland which includes Mid Highland, South East, and North Community Health Partnerships (CHPs), Specialist Services Unit (SSU), together with distinct proposals for Argyll & Bute to reflect an overall corporate NHS Highland Capital Plan.
2 BACKGROUND
In February 2006, the Board approved the 2006/2007 Capital Budget and indicative medium term plan. At that time, the Board’s projected capital spend in 2006/2007, for what is described as “Northern” Highland was £14.5m (draft pre-audit actual spend for 2006/2007 is £13.4m).
Due to supplementary allocations, asset sales and carry forwards the Board’s Capital resources for “Northern” Highland have increased significantly and the Asset Management Group was asked to reflect on how best to balance the utilisation of additional capital resource with the revenue available in the Financial Plan. The profile of the original and a possible Capital Plan are illustrated in Figure 1.
Figure 1: Original and Revised Capital Plan (Northern Highland)
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It can be seen that the revised plan could have delivered investment of over £30m in 2007/2008, compared to the £16m set out in the original Plan.
However, this additional Capital expenditure would have produced a level of Capital charges in 2008/2009-2010/2011 that were incompatible and unaffordable within the Board’s revenue plan. Consequently, the Asset management group was remitted to propose adjustments to the plan to bring the financial consequences into balance and to ensure its affordability. A proposed 2007/2008 Capital Budget and Plan for “Northern” Highland are shown at Figure 2 below. Proposals for Argyll & Bute are reflected in Tables 1b and 1c which reflect existing commitments at £5.7m and proposals amounting to £1.5m.
Figure 2: Proposed Capital Plan (“Northern” Highland)
3 2007/2008 CAPITAL BUDGET AND MEDIUM TERM PLAN
The proposed 2007/2008 Capital Budget and Plan is Shown at Table 1, with the detail of individual schemes at Table 1a (“Northern” Highland) and Tables 1b and Table 1c (Argyll & Bute).
Before considering the proposed Plan in detail, it is worth noting the capital charge consequences of the proposed Plan for “Northern” Highland. This is show at Table 2. The capital charge consequences of the proposed Argyll & Bute Plan are embedded within the Argyll & Bute CHP budget.
It can be seen that the proposed Capital Plan for “Northern” Highland generates the material overspend on the capital charges budget (allocated from the Revenue Plan in 2009/2010), but that this is non-recurrent in the context of the following years. Consequently, this overspend will not compromise the Board’s commitment to deliver a balanced in year recurrent revenue budget in this year and will be funded as part of the non-recurrent budget for that year.
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4 PROPOSED EXPENDITURE
The adjustments proposed to the Capital Plan by the Asset Management Group and subsequently considered and refined by the DHS Management Team to achieve revenue affordability reflect some changes to the phasing and profile of projects together with some budget reductions. However, the proposals reflect a significant increase in capital investment over the next three years bringing forward substantial and significant improvements to the asset base and infrastructure and services whilst being affordable in recurrent revenue terms with the Plan both for “Northern” Highland and Argyll & Bute.
For initiatives where an adjustment to the phasing of schemes has proved necessary and any service implications and the management of clinical risk will be the subject of ongoing and rigorous examination and refinement by the CHPs and SSU.
Taken together the Plans for NHS Highland amount to some £28m of capital investment contributing to a substantial improvement to services throughout NHS Highland with particular highlights identifying new, ongoing, or projects reaching completion as follows:
§ Kyle Health Centre
§ Cardio-respiratory Centre, Raigmore
§ Linear Accelerator, Raigmore
§ Enhancements to Dental premises - community
§ Interim and long term improvements to renal capacity, Raigmore
§ Day Surgery Centre, Raigmore
§ Caithness CT Scanner
§ Dunoon Community Casualty Unit
§ Bunessan GP Surgery
§ Miscellaneous decontamination facility improvements – Argyll & Bute
Details of the range of schemes are available on request.
5 CONTRIBUTION TO CORPORATE OBJECTIVES
Capital investment and enhancement to assets naturally contributes to the delivery of improved services and contribute to the achievement of the following: a robust capital investment programme is part of the Board’s overall financial plan; Local Delivery Plan and achievement of HEAT targets; quality improvement; Delivering for Health; improved technology to support patient care.
6 STAFF GOVERNANCE
Staff governance will contribute to significant improvements in the working environment for staff in front line services
7 PATIENT FOCUS AND PUBLIC INVOLVEMENT
Plans will contribute to the improvement of local services to patients by improving the quality of the delivery environment which, of course, is a key focus of patient and public involvement.
8 CLINICAL GOVERNANCE
Contribute to improving the quality and effectiveness of clinical services, patient safety and access.
9 IMPACT ASSESSMENT, EQUALITY AND DIVERSITY
Each scheme in its development will address issues of equality and diversity and in particular Disability Discrimination Act (DDA) issues.
10 CONCLUSION
The Board is asked to consider and endorse the proposed Capital Programme.
Derek Leslie Paul Leak
Director of Planning & Performance Head of Financial Planning
1 June 2007
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