Frequently Asked Questions
Money matters
What is private finance initiative (PFI)?
In a nutshell it is a way of funding public infrastructure projects with private
investment.
For us it means that a private sector consortium (group of companies) would put up
the money for the new hospital. They would design it using our carefully drawn up
specification and then build and maintain it.
Once the building was completed, we would make a monthly payment, like a
mortgage, to the private sector consortium. After 30 years we would own the hospital
building outright.
During the 30 years when we make monthly payments, the maintenance and repair
of the building is entirely the responsibility of the PFI consortium. This means that we
do not have to pay for anything for routine repairs or maintenance for 30 years.
Once the 30 years is up the private finance consortia has to hand the building back
to us in a good condition, as specified in the contract.
Therefore, it is like a mortgage in which the bank also does repairs and
maintenance.
Why are we using PFI?
There are two options for funding available to large public sector capital schemes.
One is Government funding and one is to use a private finance initiative (PFI).
Both Government funding and private finance cost money, either the Government is
borrowing the money or the private consortium is, so they both have interest
charges.
The Government will not provide the funding for a new building if a private finance
initiative is judged better value for money for the taxpayer overall. Our assessment,
using Department of Health guidance, is that PFI would be better value for money.
Although the interest rate is higher than for Treasury borrowing, the PFI company
takes all the financial risks of construction and pays the maintenance costs for 30
years.
Even if Treasury funding was found to be better value for money than PFI, the
Government now has a policy of reducing the public sector deficit. In the current
context of the public finances, it is doubtful that the Government would have the
scope within its spending plans to fund the new Royal.
What advantages does PFI have over Government/Treasury borrowing?
Whilst PFI has a higher interest rate, the financial risks of construction and the cost
of maintenance are included in a PFI. This gives two main advantages over Treasury
borrowing:
Transfer of risk: if a building is constructed using PFI then as soon as the contract is
signed both the price and the timescale for the building project are set. So in our
case, if the new Royal took longer to build than agreed, or if there were cost
overruns, then it would be the responsibility of the PFI consortium – they would have
to pay for any additional costs and deal with any time overruns and any costs
associated with those.
Maintenance: once a PFI building has been completed and handed over the
maintenance and repair remains the responsibility of the PFI consortia. This means
that for us we would not have to pay any maintenance or repair costs for 30 years as
this would be built into the PFI arrangement.
Isn’t PFI just a way of privatising the NHS by the backdoor?
Not at all, under PFI we will be purchasing a fully-maintained facility but will retain full
control of all clinical activity provided as now by NHS staff employed directly by the
Trust.
How will you pay for this?
At current prices the cost to the Trust of the new hospital under PFI will be about £32
million per year, covering building, lifecycle and maintenance costs. The Trust will
meet these costs, without affecting patient care, through a combination of £12 million
available from the costs of existing buildings to be demolished, £8 million from
savings, £9 million from treating more patients with more complex conditions, and £3
million underwritten by Liverpool PCT.
How sure are you that you can afford the new hospital?
Our plans for a new Royal – including our long-term financial plans - have been
reviewed by Liverpool PCT, NHS North West, the Department of Health and the
Treasury. All of these reviews took into account the possibility that – whatever the
procurement route - costs may turn out higher than initially estimated, for example
through construction price inflation.
Usually NHS Trusts develop business and financial plans that run to a couple of
years. Because we are planning to build a new hospital we have developed financial
and business plan runs to 10 years.
Why a new hospital
What is wrong with the current building?
The structure of the building is sound. The need for a new hospital results from two
key problems: the condition of the Royal’s engineering services, and fire safety.
The engineering services – heating, lighting, power, water, ventilation – are well past
their 25 year life. Although they have been well maintained, they will not last
indefinitely. As time goes on, the risks of failure increase, which would lead to
significant and lengthy interruptions to patient care and would be very difficult to
manage in an operational building
The Trust does have a fire certificate for the Royal. But guidance has moved on
since the hospital was designed, and we need an action plan in response to the
latest standards.
What about refurbishment - why don't you just refurbish the existing hospital?
This option has been assessed and evaluated at length and by independent
architects, building engineers and surveyors.
Their conclusions were that refurbishing the Royal would take a lot longer, cause
much more disruption and significantly, it would cost substantially more than a new
building. For this last reason it is unlikely that anyone – PFI, banks or the
Government – would want to pay for a refurbishment.
Over the past ten years, we have refurbished wards at the Royal. However, this has
in no way tackled the fundamental issues with the building, which are the risks to the
main engineering services and the need to comply with the latest fire safety
standards. Only a comprehensive refurbishment of the whole hospital would resolve
these. This would take longer, cost more and be more disruptive than building a new
hospital – and would not provide the same benefits for patient care.
The New Royal
What will the new Royal look like?
We cannot say yet. The final design will be developed by the successful PFI bidder
and agreed by the Trust (with patient and staff involvement). However, we have
prepared some initial designs, to test our ideas with patients and staff, confirm the
capital costs, and act as a benchmark for the bidders to improve upon, as well as
some artist’s impressions.
What will be the future use of the land freed up by the new build/will it have
shops or apartments built on it?
The plan is to create over time a BioCampus on the site – a concentration and colocation of health care provision and academic and commercial research, within
Liverpool’s Knowledge Quarter. This will take the form of new city blocks along the
Prescot Street and Daulby Street frontage with a green heart (a new public open
space) at the centre.
Liverpool has an outstanding range of expertise in health and bioscience in both the
commercial and commercial sectors – but its full potential is yet to be realised. The
biomedical campus will help create new investment and jobs and continue the
regeneration of Liverpool.
How many floors/how tall will the new hospital be?
Current plans are for the building to rise from lower ground floor to eighth floor, which
gives ten floors in total. However, the outline planning permission would allow the
building to be slightly taller if necessary. By comparison, the existing Royal runs from
lower ground to twelfth floors, a total of fourteen floors.
What happens to the Linda McCartney Centre/Liverpool University Dental
Hospital?
Both the Linda McCartney Centre and the Liverpool University Dental Hospital are
planned to be retained. Both have had extensive works done over the years which
mean they do not have the same issues as the main hospital or Duncan Building.
The Duncan Building is situated behind the Dental Hospital, next to the main
hospital, and is mostly occupied by laboratories.
Will the new build last more than this hospital did (less than 40 years by
2015)?
The Trust will require the new hospital to be designed so that, with reasonable
upgrades, it should last at least 60 years.
What is happening at Broadgreen?
We have earmarked capital investment to expand our surgical capacity at
Broadgreen and to make improvements in the wards and other areas in the
Alexandra Wing.
Facilities in the new Royal
Will there be a Cancer Centre in the new build?
The Royal will remain the regional centre for the same areas of cancer diagnosis,
treatment and care as now. Radiotherapy is not currently part of the scheme.
However, Liverpool Primary Care Trust (PCT) has decided to commission a
radiotherapy unit on the Royal site. We are in discussion with the PCT, Clatterbridge
and the University of Liverpool on the range of specialist cancer services to be
provided at the Royal in future.
What bedside facilities will there be (phone and TV, for example)/what will they
cost?
There are plans to have a TV in every bedroom. It is assumed there will be no
charge for this.
What is the Royal doing about infection control in the new hospital?
The most senior people in infection control in the hospital have been involved in the
design of the new build from day one. They have made comments and changes
such as increasing the rate of air exchange in patients’ rooms, and they will approve
many aspects of the building of the new hospital and the decommissioning of the old
hospital.
What is security within the Royal like in the new plans?
Patient safety is paramount in the new hospital. All patient areas will be observed by
staff at a reception desk, and the exterior of the building, the corridors, the
approaches to the hospital and car parks will all be covered by CCTV. Wards will be
managed using video access, controlled by members of staff and doors will
automatically lock out of hours. At night there will be one single secure entrance to
the building.
Will there be enough beds?
We expect to be treating slightly more patients in 2016 than we do now, but we
anticipate we will need fewer beds than we have today. Reducing the number of
beds is possible because the amount of time patients need to spend in hospital is
declining. This is because of changes to the way we treat people – because of
improvements in treatments, technology and medications. This is something that has
been happening for many years:
In 2003 patients stayed on average 9.6 days in hospital following an emergency
admission but by 2009 this figure had fallen to 6.7 days.
Between 2005 and 2010 we have reduced our total number of beds by 208. During
this period we have treated greater numbers of patients whilst also achieving
national targets for waiting times for planned admissions and A&E services.
Compared with other similar hospitals, we have relatively long lengths of stay for
patients. By improving the way that services are provided, our clinicians are
confident that lengths of stay can be reduced.
What happens if you need more beds than planned?
We recognise that projecting the number of beds required in six or more years’ time
is not an exact science. So an area in the new hospital will be built as offices but
designed so it can be converted to up to two additional wards if necessary.
What is the Royal doing about alcohol and drug misuse on site and smoking,
now and what are the plans in the new hospital?
Every effort will be made to design the hospital in a way which discourages smokers,
so there will be no canopies at entrances and landscaping which deters
loitering. The design will also ensure that there are no secluded areas on site for
smokers and drug abusers to be hidden. Single bedrooms mean that patients will
not have to share a room with drug abusers.
Will there be any job creation for local people either during the build or when
the hospital is completed?
A substantial number of construction jobs will be created during the seven year
period when building activities will be taking place on site and it is anticipated that
many of these workers will be recruited locally. The Trust will continue to be a major
employer of local people.
What will the car parking be like?
We have agreed our future car parking requirements with the City Council. We will
still use Q Park (located on Epworth Street opposite the existing hospital) but there
will also be a new multi-storey car park plus some parking in front of the new main
entrance. People with a disability will have first priority for the most accessible
spaces followed by other patients.
Timetable
How long will it take to build the new hospital and demolish the old one?
The new hospital will take approximately three years and nine months to construct
and this will be followed by a further three years during which the existing hospital
and associated buildings will be emptied and demolished and the site is cleared and
landscaped.
What is the timetable for the new hospital?
Detailed proposals from the final two bidders were submitted in January 2012. We
will now look at these carefully before making the decision on which bidder will build
the new hospital later this year. We will then need to get final approval from NHS
partners and detailed planning permission from Liverpool City Council.
Construction and Sustainability
Will there be lots of noise and dust during the new build and what are you
going to do to help alleviate this? Will it affect people’s health?
The generation of some noise and dust is an inevitable part of all building activities.
However, the technical specifications for this project will impose strict controls on the
contractor and will require the undertaking of environmental monitoring to ensure
that disruption to the local community is kept to an absolute minimum.
Is there any asbestos in the current building and will it pose any threat when
the building is being demolished?
There is asbestos within the existing building that will require removal following
relocation of all services into the new hospital. Identification and removal of the
asbestos will be carried out by licensed specialists and will be subject to strict
monitoring to ensure that the work is carried out safely and in accordance with all
legislative requirements and is of no danger to patients, staff and the public.
What is being done within the new build to reduce the hospital’s carbon
footprint?
The issue of sustainability has been one of the prime considerations in the design of
the new hospital. Key features that will be incorporated include:
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good access to natural light and ventilation
high levels of insulation in the external wall construction
potential use of a ground source heat pump to assist with heating and cooling
use of combined heat and power to provide efficient on-site generation of
electrical power and hot water
use of heat-recovery and energy efficient ventilation and lighting equipment
use of water fittings designed to minimise the use of water
minimisation of construction waste
use of construction materials incorporating a high level of recycled materials
Engagement and Involvement
What patient and staff involvement has there been in the design of the new
hospital?
The Patient Brief – an independent report on what patients are looking for in the new
hospital based on discussions with over 150 patients and public, produced by the
Picker Institute. You can read more about this on our website.
Service and building design issues – including capacity - are led by the Clinical
Design Group, a 40-strong group of senior clinicians including GPs/PCT.
Detailed specifications and designs for each department/type of department are
developed through user groups involving a cross section of staff from those
departments – about 400 staff involved so far.
Periodic discussion meetings with patients from our database to get their feedback
on plans.
Involvement of patients who might be affected on particular issues e.g. dialysis unit,
disabled car parking.
Regular discussions with our Patients’ Council.
How are we going to be kept informed?
Major developments will be announced through the local media
We will also keep our website up to date with the latest news about the plans for a
new Royal. The website address is: www.rlbuht.nhs.uk
You can sign up to the Project contact list or as a member of the Foundation Trust
and receive regular updates. We invite patients/public on our database to periodic
discussions on our plans to get their feedback.
How will the public be involved in the rest of the project?
Patient and public involvement in the project during procurement will be constrained
by the commercial confidentiality of bidder proposals especially during the
competitive phase. But it will include patient representation in design development
and bidder evaluation, via membership of some of the key working groups; a
community liaison group for the local area; and publication of the project newsletter
called New Royal News and articles in Insight, our main organisational newsletter.