The six firms sharing a slice of the £640 million of work under the ProCure21+ framework this year have reaped awards from virtually the only show in town.
For other health contractors, the past 12 months have largely proved a waiting game as the Health and Social Care Bill makes its agonising way through Parliament. But opportunities are emerging and those with the right approach could have a healthier 2012.
Wales’ major healthcare framework Design for Life ends next year and procurement for a new framework will shortly get under way.
Shared Services Partnership: Facilities Services Organisation is in charge of the framework for jobs worth over £10m and hopes to have three contractors in place by next July.
Head of strategic planning and construction Patrick Riordan hopes to push performance further with the new deal. He attributes the success of Design for Life to the integrated supply chains, which ensure a “single point of responsibility”.
He cites flexibility of space, community care and sustainability as vital issues for future projects.
“What we are looking for are contractors with experience that can deliver what they promise.”
The volume of work due to be procured under the framework is unclear, but the Welsh government last week confirmed a £1.3 billion capital spending programme during this financial year.
In England there are signs of some foundation trusts “beginning to innovate”, says EC Harris head of health Karen Prosser.
“They are able to raise their own capital and while there has been some reticence to go ahead with major projects, we are seeing some positive signals from trusts looking to develop spare land.”
Ms Prosser believes that understanding the healthcare market is vital to win work, giving special attention to the whole life of the building.
Vinci and Integrated Health Projects framework director Alan Kondys believes this focus on a building’s operation has been vital to his company’s recent success.
Integrated Health Projects - the Vinci and Sir Robert McAlpine joint venture - secured more than £400m under P21 and has already won eight projects worth £160m under P21+.
Vinci meanwhile has secured its third major project with Circle, which last week hit headlines by becoming the first private healthcare provider to take on the running of an entire NHS hospital.
Mr Kondys says both public and private clients are focused on flexibility of space, whole-life costs and improving patient outcomes.
The South-east leads the way with health starts so far in 2011, followed by the South-west and West Midlands, according to the latest data from construction business intelligence unit Glenigan.
The north of the UK is less active than the southern regions, making this another sector with a clear north-south divide. The South-east, South-west, East of England and London account for more than half the total starts this year.
Strong growth in starts has been recorded in the second and third quarters of this year, but the outlook for 2012 is less positive.
After a drop of 26 per cent in the first quarter of 2012 compared with the same period in 2011, bigger falls in the value of health starts are forecast through the rest of the year up to Q4, which Glenigan predicts will see a marginal growth of 1 per cent.
Glenigan does not foresee health starts to hit more than £500 million per quarter over the next 18 months, and forecasts for output growth from the Construction Products Association reveal that health output is likely to be worth less than half its 2008 peak by 2015.
Work for the top clients in the sector this year to date includes a £350m biomedical research facility - the BLISS centre - for UKCRMI Construction and the £90m phase B redevelopment for Ulster Hospital, awarded to Gilbert Ash earlier this year.
Work is also currently under way for the University of Oxford’s relocated Jericho health centre, as well as four medical centres in the North-west and Wales regions for LSP Developments.
Many ways to save with repair work
Sustainable cosmetic repairs save tonnes from landfill every year, which is not only good for the environment but also saves on costs, two important considerations for health sector contractors.
Specialist fine finishers Plastic Surgeon has a wealth of experience working on health projects, helping contractors remain on time, on budget and reduce their waste.
The company recently worked with Vinci Construction on the £73m Cynon Valley Neighbourhood Hospital for the Cwm Taff Local Health Board.
As the site was spread across 18,000 sq m and several different departments there were multiple dents, scratches and other forms of damage that needed addressing.
Plastic Surgeon worked to remove scratches on glass, repair door skins and handles as well as sanitary ware, worktops and IPS panels.
The company has also worked on a series of health jobs with Laing O’Rourke to assist final snagging operations as work neared completion.
Plastic Surgeon worked on the Leeds General Infirmary’s new wing where the internal and external doors had been damaged from equipment and materials being moved around the building.
Plastic Surgeon repaired 28 wood veneered interior doors, seven outside doors and multiple worktops and fascias.
In 2010, Plastic Surgeon says it:
Saved 64,938 items from landfill
Saved 1,750 tonnes from landfill
Saved £84,000 in landfill taxes
Carried out 2,170 shower repairs - average cost per repair £20
Carried out 25,183 glass window repairs - saving £286 on average
Repaired 2,774 baths, saving 69 tonnes from landfill
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Consortia crucial for work in Scotland
The Scottish Futures Trust is at the forefront of healthcare construction north of the border.
The market is increasingly split between large acute healthcare projects and smaller primary care projects. Each uses a different delivery model and different skill sets and experience.
In acute care, projects will be procured through the Non Profit Distributing model as one-off jobs.
The first due is the £150 million Royal Hospital for Sick Children in Edinburgh.
Scottish Futures Trust director of finance and structures Peter Reekie says: “The business case is due later this year, so the OJEU notice should be some time in spring.”
It was originally to be delivered through the Scottish Health Framework by Bam Construct, but following major budget cuts the government has opted for private finance.
The Sick Childrens Hospital will be followed by a £45m job for Ayrshire and Aran, a £60m project in Orkney and a £200m hospital for Dumfries and Galloway.
“They are all finance projects so you need to be in a consortium that can deliver a project like this,” Mr Reekie said.
For community care projects, most work will be procured through the hub programme, with local authorities and health boards teaming up with consortia of contractors and developers.
For contractors not already involved, Mr Reekie says there are extensive opportunities through the supply chain.
“There has been a lot of competition at the second tier level so building relationships with the consortia or the main contractors is very important for smaller firms.”
Roll call: who you need to know
Ray Stephenson, programme manager, P21+
ProCure21+ is the principal healthcare construction framework in England, with £640 million of work awarded in the past 12 months.
Balfour Beatty, Interserve, Kier, Vinci/Sir Robert McAlpine, Miller and Willmott Dixon fight it out for jobs ranging from £450,000 to £60m.
Mr Stephenson manages the framework on a day-to-day basis, sitting below P21+ head Peter Sellars.
Patrick Riordan, head of strategic planning and construction, Shared Service Partnerships
Design for Life is the major healthcare framework for Wales and Shared Service Partnerships is in charge.
Bam, Interserve and Laing O’Rourke have benefited from large volumes of work through the existing framework and competition to join its replacement - due to be let next year - is expected to be intense.
Mr Riordan is tasked with overseeing the procurement process.
Peter Reekie, director of finance and structures, the Scottish Futures Trust
The Scottish Futures Trust is overseeing £2.5 billion of investment in Scotland’s infrastructure, £750m of which will be spent on health.
Mr Reekie will be instrumental in overseeing the pipeline of PPP projects procured in acute care, as well as the primary care facilities built through the hub programme.
Mark Cammies, property director, Circle
Circle plans to develop up to 30 independent hospitals across the country and is already a major player in independent healthcare.
Circle opened its first new-build hospital, CircleBath, in March 2010, and Vinci Construction is building Circle’s second, CircleReading.
Mr Cammies heads up the group’s property team and he will oversee the roll out of the development pipeline and the appointment of contractors.