article
NHS primary care centre procurement – spoilt for choice?
12 November 2008
Thomas Howard examines the merits of a new
procurement model as PCTs face a growing array of options in
seeking to finance their Health Centre Development
plans!
Several different procurement approaches are
today being used in the delivery of primary care centres. However,
the Department of Health hopes the LIFT model will be integral to
delivering Lord Darzi’s polyclinic vision, as demonstrated by the
launch of a new framework to extend its reach, Express LIFT.
Established LiftCos have the benefit of
existing long term partnering arrangements and experience gained
from completed and ongoing projects. For those PCTs with existing
LiftCos, the exclusivity provisions of LIFT mean these PCTs must
first look to procure their new centres through LIFT. However, as
the injection of public funds for each particular centre is
deferred until it is operational, the ability to deliver new
projects is likely to depend on the financial strength of the
LiftCo.
In addition, many PCTs are likely to want to
fully understand the impact of the upcoming changes to balance
sheet treatment of LIFT projects before committing to further
expansion of their own projects.
New kid on the block
Yet expansion of the model is happening.
For those PCT areas outside of existing Lift Projects, the
Department of Health has devised the Express LIFT scheme.
Launched on the 1st August 2008 it is intended that this
new scheme will become available for PCTs as early as January 2009,
although whether this will be achieved remains to be seen.
Express LIFT doesn’t seek to re-invent the
wheel. Once formed, the new LiftCos will take the same
shareholding structure as existing LiftCos (including the
shareholding of Community Health Partnerships) and standard
documentation is unlikely to change to any extent, although the
exclusivity period for the LiftCo is reduced to 10 years.
The key to Express LIFT lies in the
considerable time savings expected to be made at the procurement
stage. The Department of Health will establish a
national procurement framework on which it anticipates there will
be 6-10 private sector consortia participants. Existing
LiftCos may not bid, although it is likely from the framework
criteria that the successful consortia will comprise organisations
with extensive experience in LIFT. The PCTs wishing to
establish a LiftCo then invite bids from the framework firms to be
their private sector partner. The Department of Health
anticipates procurement time reducing from 2 years to around 4-6
weeks.
However, will keeping the fundamental
structure of LIFT affect how well it is taken up? For the
most part, the only PCTs able to make use of Express LIFT are those
which chose not to embrace it in any of the four existing waves
(although mergers have created some PCTs with shareholdings in
existing LiftCos which don’t cover their full geographical
area). If it is assumed that it was the structure of
LIFT itself (and not the procurement delays - which wouldn’t have
been a factor in the early waves) that was a problem for these PCTs
then it is difficult to see why a new vehicle for taking them there
at greater speed will be immediately attractive. Even if this
is not the case a majority of these PCTs are likely to be cautious
until the framework has been tested.
In addition, this retention of the core LIFT
structure will mean the issues flagged earlier about LIFT will also
apply to Express LIFT. The balance sheet treatment in
particular may well deter PCTs from looking to this structure until
that issue has been resolved.
ProCure 21
Like LIFT, ProCure 21 has the benefit of a
track record of delivery and, unlike Express LIFT, already has a
framework in place (currently to 2010 but the Department of Health
has recently announced it will go out to consultation for a
replacement framework in January 2009) thus removing the expense
and delay of procuring the project.
Many PCTs have used the ProCure 21 option as
an alternative to LIFT and for those PCTs it should continue as an
alternative to Express LIFT. For those non-LIFT
PCTs which haven’t used ProCure 21 it is, as with Express LIFT, not
clear why they will choose to adopt it now in the absence of any
further incentive.
In addition, the need for immediate public
funds into ProCure 21 projects will mean a PCT’s own financial
position will be the deciding factor.
Next steps
It is too early to know either the levels of
money which will be put into the economy by the government for
primary care development, or the success of the various models at
delivering them in these times of economic uncertainty. Insofar as
possible, PCTs should for the time being continue the development
of their Estates Strategy to accommodate their own situations and
wait to see what investment or policy guidance continues to come
from the Department of Health. As with many things, the
primary drivers to the success and failure of any of the models are
likely to be economic reality and political will.
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