NHS GRAMPIAN

Local Delivery Plan and Property and Asset Management Plan

1.Actions Recommended

The Board is asked to consider and approve the:

  • Local delivery plan (including the five year financial plan)
  • Property and Asset Management Strategy.

2.Strategic Context

Local Delivery Plan

The Local Delivery Plan (LDP) sets out the annual delivery agreement between NHS Grampian and the Scottish Government Health Directorate. The content of LDP has changed this year with the introduction of a new Improvement and Co-production plan. This requires Boards to set out how they will work to deliver the ambitions as described in the NHS Scotland 2020 routemap and covering the three main aims of

Quality of care / Incorporating – Person Centred and Safe Care, Primary Care, Unscheduled Care, Integrated Care, Multiple and Chronic Diseases
Health of Population / Incorporating – Early Years, Health Inequalities and Prevention
Value and Sustainability / Incorporating – Workforce, Innovation and Efficiency and Productivity

The LDP also contains the Board’s

  • 5 year financial (revenue and capital) plan,
  • information on how Boards are working with partners to deliver Single Outcome Agreement commitments and
  • improvement trajectories for the national HEAT targets and standards.

Progress with delivery is monitored as by the Board’s Performance Governance Committee and as part of the Annual Review process.

The Local Delivery Plan and Financial Plan have been subject to review and feedback from the Scottish Government Health and Social Care Directorates. Whilst both documents have been updated since the Board seminar there have been no material changes to either the Local Delivery Plan or the Financial Plan.

Property and Asset Management Plan

The Scottish Government’s “Policy for Property and Asset Management in NHSScotland” [CEL 35 (2010)] requires all NHSS bodies to have a Property and Asset Management Strategy (PAMS) which is reviewed and approved by the Board annually. This is thePAMS which will be known as theProperty and Asset Management Plan(PAMP) for NHS Grampian.

The Property and Asset Management Plan is one of a coherent suite of supporting and enabling plans which together with an underpinning financial plan supports our “Healthfit 2020 – NHS Grampian’s Strategy” and is intended to demonstrate that the Board can successfully deliver Scotland’s health policies and the shared national ambition for achieving world leading quality in our healthcare services.

The overall aim of this plan is to ensure that the Board’sasset baseisthe right size, suitable for purpose, positively supports service delivery and enhances service users’ experiences

  1. Key matters relevant to recommendation

Local Delivery Plan – actions and outcomes

Scottish Government has confirmed that 2014/15 is a transitional year for LDPs and guidance on content of the new Improvement and Co-Production Plan has not been prescriptive. NHS Grampian has adopted the 12 priorities contained in the 2020 Routemap as the framework for the plan. These are consistent with our local Healthfit 2020.

The local delivery plan requires the Board to evidence, against each priority, our commitment to improvement by 2020, the actions that we are taking and the measures against which progress will be monitored.

The Plan includes links to a number of local plans.

Local Delivery Plan –financial plan

The local delivery plan incorporates the Board’s five year financial plan. The key matters that we would highlight are as follows:

  • The plan confirms the NRAC parity uplift agreed with Scottish Government which will increase our allocation by £43m over the next three years and bring NHS Grampian to within 1% of parity (assuming a constant population) by 2016/17. The projected baseline increase and agreed NRAC parity adjustments in each of the next 3 years are as follows:

2014/15 / 2015/16 / 2017/18
Projected baseline increase / £20.0m / £14.0m / £14.6m
NRAC parity adjustment / £15.5m / £13.5m / £14.0m
Total / £35.5m / £27.5m / £28.6m
  • The plan sets out the proposed allocation of revenue resources to meet unavoidable cost pressures and new commitments in 2014/15, as recommended by the Budget Steering Group (see Appendix 1). Forecast financial information is also provided within the plan covering the revenue position to 2018/19.

2014/15 / 2015/16 / 2017/18
Projected cost increases / £33.8m / £27.5m / £28.8m
Future service commitments / £14.0m / £12.2m / £12.4m
Total / £47.8m / £39.7m / £41.2m
  • The plan sets out the capital plan and proposed allocation of funding to meet priorities in relation to backlog maintenance, essential equipment replacement and investment in new community based facilities (using the national hub mechanism). A summary of the capital plan is presented at Appendix 2.

Property and Asset Management Plan – overview

The Property and Asset Management Plan sets out the Board’s priorities for managing the infrastructure that supports the delivery of patient care and associated services across NHS Grampian and is integral to the delivery of the NHS Grampian Healthfit 2020 vision.

The plan is focused on actions across four main areas:

  • Investment in infrastructure consistent with our strategic health priorities;
  • Reduction in high and significant risk backlog maintenance in clinical areas and compliance with statutory requirements;
  • Replacement of essential equipment, IT and Vehicles; and
  • Disposal of assets declared surplus to requirements.

The supporting financial plan as set out within the Local Delivery Plan incorporates the resources aligned against these areas of expenditure financed from revenue operating budgets, the capital programme and through asset disposals.We have assumed a formula capital allocation over the five years of the plan consistent with that outlined in the NHS Scotland Chief Executive letter of 7 February 2014.

This is in addition to previously approved brokerage and funding for legally committed schemes and other nationally agreed investment programmes such as the Carbon Energy Fund, hub initiative (replacement of Inverurie Health Centre and Denburn Health Centre), the National Radiotherapy equipment replacement programme and the National PET replacement programme.

Beyond the five year period of the plan reflected in this local delivery plan, we will be taking forward the initial steps in planning for how we

  • replace the AberdeenMaternityHospital and the planned care in-patient and theatre block at Aberdeen Royal Infirmary. The significant backlog maintenance investment we are committed to making over the next 3 years will only enable us to maintain existing infrastructure on the Aberdeen Royal Infirmary site for a further 10-15 years, without major re-investment;
  • redesign the portfolio of community based assets to ensure that we can meet the demands of new and emerging communities and support the opportunities which will emerge through health and social care integration and the provisions set out within the Community Empowerment and Renewal Bill; and
  • maximise the effective use of technology to facilitate the further integration of clinical information systems, incorporating data sharing on a multi-agency basis and supporting patients take greater responsibility for their own care and health outcomes.
  1. Risk Mitigation

Approval of the final LDP will assist in mitigating Strategic Risk 851, Delivery strategies to meet the future health needs of the population and Strategic Risk 586, Partnership working with local authorities, third sector, independent contractors and the community.

Approval of the Property and Asset Management plan will assist in mitigating Strategic Risk 855 by ensuring that we implement an asset investment, disposal and backlog maintenance programme or redesign of service provision to reduce dependence on physical buildings.

5.Responsible Executive Director and contact for further information

If you require any further information in advance of the meeting please contact:

Responsible Executive Director
Alan Gray
Director of Finance
/ Contact for further information
Anne Ross
Head of Performance and Quality Improvement

26th March 2014

Additional supporting information

Local Delivery Plan (incorporating 5 year financial plan)

Property and Asset Management Plan

Printed copies of the above documents will be made available on request.

Appendix 1: Summary of financial revenue plan for 2014/15

New Resources

NHS Grampian’s core revenue allocation uplift for 2014/15 has been confirmed at 2.69%of our Revenue Resource Limit (RRL). Our base funding uplift plus the additional move to NRAC parity amounts to a £35.5million increase compared to 2013/14. The £15.5m of NRAC parity funding will make a significant and valuable contribution to our investment plans.

Cost pressure and new expenditure commitments

In terms of our financial plan for 2014/15, we have allocated these new resources to meet known unavoidable cost pressures (£33.8m) and targeted investments (£14.0m).

Cost pressures

The key unavoidable cost pressures are in relation to:

Pay and Non Pay Uplift / £12.4m
GP and Hospital Drugs / £7.6m
Targeted cost pressure funding / £8.0m
Infrastructure and depreciation / £2.0m
Other (incl contingency) / £3.8m
Total / £33.8m
  • Pay and non pay uplift and increases in GP and Hospital prescribing costs have been provided in accordance with planned assumptions stated above. We have also included provision for continued use of medical locums in recognition of the ongoing challenges of filling essential medical vacancies.
  • Anticipated cost pressures identified by each operational sector and corporate directorate as part of our budget setting process have been scrutinised by the Board’s budget steering group against a set of agreed criteria. Consequently a total of £8m will be allocated into operational budgets to meet these unavoidable commitments.
  • The increase in infrastructure costs relate partly to the revenue element of our focused programme of backlog maintenance and partly to the increase in depreciation following the ongoing investment made in replacement of essential medical equipment.

Targeted investment

The targeted investments approved for 2014/15 are in line with national health priorities and/or local priorities reflected with the Grampian Healthfit 2020 vision:

Acute / Primary Care / Mental health
£m / £m
Waiting times / 8.0 / Insulin pumps / 0.4
Cancer oncology / 1.2 / CAHMS regional service / 0.7
Research & Development / 1.4 / HMP Grampian / 0.7
HAI compliance / 0.5 / New primary care facilities / 0.4
AAA screening / 0.2 / Immunisation programme / 0.5
11.3 / 2.7

The Board has committed to investing £8.0m[1] in recurring additional capacity to meet the requirements of the Government’s Treatment Time Guarantee.This investment will support the three new additional theatres– two on the Health Campus at Foresterhill and one at Woodend Hospital. We anticipate a significant reduction in our use of the independent sector, other than in exceptional patient cases.

Other strategic investments within the Acute Sector in 2014/15 will include £1.2m to increase the resilience of our cancer oncology service, £1.4m within research and development in line with the plan agreed with the Chief Scientist Office and £0.5m to address actions agreed with Health Improvement Scotland in relation to compliance with Healthcare Associated Infection (HAI) standards.

Investment in primary care and mental health services will also be made during 2014/15. The main areas targeted for investment will include:

  • Resources to meet insulin pump and immunisations targets;
  • Establishment of aregional specialist network for Child Adolescent Mental Health Services; and
  • The investment in additional health services required to support the increased prison population following the opening of the new HMP Grampian. HMP Grampian (which replaces Peterhead and Craiginches Aberdeen) will house 550 prisoners consisting of c490male and c60female prisoners (indigenous to theGrampian Area) and these will be both Young Offenders and Adult prisoners. In addition there will be dependent children theoretically up to the age of 5, but more likely to the age of 2 yrs.

In prioritising investment between primary and secondary care, our focus will continue to be towards ensuring that we are providing the right care in the right place. Our Healthfit 2020 vision has integrated care at its core, with a determined focus in removing the boundaries between primary and secondary care. If we are to meet future demographic challenges, all elements of our health and social care system will require to be co-ordinated in an integrated manner.

Appendix 2: Summary of the 5 year capital plan

Overview

Our five year plan is summarised as follows:

14/15 / 15/16 / 16/17 / 17/18 / 18/19 / Total
£m / £m / £m / £m / £m / £m
Source of funding
Core Government funding / 24.5 / 8.4 / 21.7 / 14.2 / 14.1 / 82.9
Other sources / 4.8 / 2.9 / 2.4 / 2.0 / 1.9 / 14.0
Asset disposals / 5.2 / 12.3 / 7.9 / 25.4
Total / 34.5 / 23.6 / 32.0 / 16.2 / 16.0 / 122.3
Planned expenditure
Strategic health priorities / 11.6 / 1.6 / 13.1 / 26.3
Backlog maintenance / 16.1 / 18.8 / 11.9 / 9.6 / 9.6 / 66.0
Equipment replacement / 6.3 / 2.7 / 6.5 / 6.1 / 5.9 / 27.5
Other / 0.5 / 0.5 / 0.5 / 0.5 / 0.5 / 2.5
Total / 34.5 / 23.6 / 32.0 / 16.2 / 16.0 / 122.3

Investment in strategic health priorities

Our investment in modern new build facilities continues to be recognised in 2014/15 - Woodside Health Centre and Forres Health and Care Centre; and beyond with the replacement of the health centre and establishment of the community maternity unit in Inverurie and relocation of the Denburn Medical Practice.

The Board are committed to reduce the level of carbon emissions across our property base and all new developments are now delivered with integral technology designed to reduce energy use and consequently carbon emission levels. We continue to explore options including the Carbon Energy Fund and a business case is under development to implement new technology at our largest hospital sites which will contribute towards a reduction in energy usage/carbon emissions in the coming years.

Reduction in backlog maintenance statutory compliance

Our planned investment programme in respect of backlog maintenance fits clearly with NHS Grampians strategic theme of delivering high quality care in the right place through providing safer, effective and sustainable services. In addition the plans fit national and local strategy as follows:

  • The Scottish Government’s “Policy for Property and Asset Management in NHSS” issued in September 2010(CEL 35(2010)) requires all NHS Boards to target backlog maintenance reduction as an integral part of their Property and Asset Management Strategy.
  • Our backlog maintenance costs estimated at £171.9m[2] are the second highest of all the Scottish Health Boards, of which £68.4m was high or very high risk
  • A large part of the planned programme to address backlog will focus on East End 2 and Phase 2 at Aberdeen Royal Infirmary (ARI). Both buildings will remain as inpatient facilities for the next 10-15 years. Beyond this period the Foresterhill Development Framework has identified an area to the east of the ECC for the construction of a new inpatient facility to replace both buildings. This requirement has been recognised by the Scottish Government and the major investment required has featured in the Government’s long term infrastructure plans.
  • The planned work at ARI, although focused on backlog maintenance reduction, will enable the reconfiguration of services consistent with the Health Campus Programme Initial Agreement and the Foresterhill Development Framework approved by the NHS Grampian Board in 2008.
  • The re-provision of clinical services from Denburn Health Centre and Woolmanhill Hospital will enable estate rationalisation and an overall reduction in our building footprint.

Firm plans now exist to progress a programme of targeted expenditure initiatives, asset disposals and site rationalisation that will result in an overall reduction in backlog maintenance against this target of £52.2m (30%) by March 2018. Within this overall figure very high risk backlog will reduce by £11.3m (63%) and high risk by £22.5m (44%).

By March 2018 there will still be a sizeable backlog risk in our estate. The largest remaining areas with a planned future clinical use and high levels of backlog are the Phase 1 block and Theatres at ARI. The Foresterhill site rationalisation plan identifies Phase 1 as the future location for ambulatory care services in the medium term. The service plans to deliver this are at a very early stage of development and a firm works programme for this area cannot be agreed until the service configuration is finalised (the current backlog risk categorisation reflects use as in patient accommodation and this will change significantly, potentially requiring less intervention, if we change the use to outpatient only).

Replacement of essential equipment

A key element of our capital programme is the replacement of essential equipment and critical assets within our clinical and non clinical services. We have had significant engagement with clinical services in order to assess and prioritise available funding to target at essential equipment replacement.

In terms of planning within a five year context, we are developing a more detailed equipment replacement strategy, informed by a comprehensive assessment of risk. Given the commitment to the backlog maintenance within the Aberdeen Royal Infirmary over the next three financial years, the funding available for supporting a rolling replacement programme will be limited. During this period the focus will be on prioritising funding to those areas of highest priority. From 2016/17 onwards, resources will be allocated to support the delivery of a higher level of investment which will be informed by risk assessment within the equipment replacement strategy.

Disposal of surplus assets

A key element of the delivery of our capital plan is achievement of our programme of disposals of surplus assets. This programme has now been agreed with Scottish Government and delivery of the required actions is monitored closely by the Board’s Asset Management Group.

1

[1]During 2013/14, the cost of the additional capacity was funded on a non-recurring basis

[2]The values used to quantify backlog maintenance risk are stated net of VAT, fees and other on costs which means that the actual project costs necessary to deliver the required works are often well in excess of these values