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Health clients look to BSF contracts

Health clients are looking to use Building Schools for the Future contracts to build care facilities as the NHS reforms continue to hold up billions of pounds of work, Construction News has learned.

Trusts are working with contractors and consultants to see how the Local Education Partnerships set up to deliver secondary school projects could be used for health schemes.

The move follows warnings that the NHS reforms, budget cuts and carbon pricing would drive health clients away from frameworks towards long-term partnering deals for capital works (CN 21 April, p8).

The government’s ‘pause’ to its health reforms has sparked a hunt for innovative ways to get schemes off the ground.

EC Harris head of health Karen Prosser told CN this week: “LEPs can be used for related community facilities, which could mean building GP surgeries or baby clinics next to schools.

“This has not been done very extensively so far but it is increasingly being looked at. We are actively looking at it with several parties and I believe there is scope for it to work.”

UK Contractors Group director Stephen Ratcliffe said LEPS were natural vehicles for community health centres, and confirmed talks were taking place.

“The types of health jobs being looked at are fairly similar in nature to schools projects,” he said. “The problem, as always, is where the cash would come from - there is very little capital expenditure and the banks are not lending.

“But some very clever deals are being structured at the moment, perhaps using council assets or trying to capitalise revenue streams.”

Prime Minister David Cameron last week pledged to rewrite the Health and Social Care Bill in the wake of a report by the Future Forum, a panel of NHS experts set up to report back to ministers after the bill’s initial unpopularity with voters and many MPs.

The Future Forum published its findings last week.

The changes recommended by the panel include stronger safeguards when introducing competition to the health service, and dropping a deadline for all trusts to become foundation trusts. An amended health bill is expected to be published today.

However, primary care trusts are still to be abolished in April 2013 under the controversial Bill, leaving uncertainty about who will manage the £36 billion health estate.

KPMG director Matthew Custance said billions of pounds of health work was being held up by the lack of clarity about the future shape of health capital investment.

He warned that major PFI schemes would struggle to reach financial close until the Department of Health guaranteed it would give deeds of safeguard to the initiatives. Seven major PFI schemes were approved by the DoH last October, including the £288 million Alder Hey deal and the £400m Royal Liverpool University Hospital project.

Mr Custance added that several mental health and secondary hospital jobs worth between £20m and £70m each were being held up over uncertainties about the new shape of the NHS.

“We had hoped these policy issues would have been resolved by March this year,” he said. “As it is, the earliest they will be solved is three months away, and transactions would take a couple of months after that to reach close.”

PCTs are also not in a position to set up new Lift companies to deliver construction projects, and there is uncertainty about the government’s position on future private finance initiatives.

The £4bn ProCure 21+ framework has been a bright spot for health contractors this year, but is mainly being used for small refurbishment schemes rather than large new builds.

The DoH said it was too early to give further details on the shape of the reforms and that any amendments to the Bill would be a matter for parliamentary process.


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