Outline Business Case (OBC) for the Development of Operational Estate in the North East Wales

Transcription

1 Outline Business Case (OBC) for the Development of Operational Estate in the North East Wales Welsh Ambulance Service NHS Trust 30 April 2009

2 Contents 1 Introduction Purpose Structure and Format of the OBC The Strategic Case Introduction The Public Service Context for Wales The Overall Strategy for the Welsh Ambulance Service The Estates Strategy for the Welsh Ambulance Service The Local Context for the Proposed Development in North East Wales Potential Scope Main Risks Constraints Dependencies The Economic Case Introduction Critical Success Factors The Long-Listing of Options The Short-Listed Options Qualitative Benefits Appraisal of Short listed Options Methodology Qualitative Benefits Criteria Qualitative Benefits Scoring Analysis of Key Results Economic Appraisal of Short listed Options NPC Findings Option Ranking Cost per Benefit Point Analysis Sensitivity Analysis Option Appraisal Conclusions Risk Appraisal Methodology Risk Scores The Preferred Option Conclusion The Commercial Case Introduction Required Services Proposed Contractual Arrangements Proposed Mechanisms for Funding Construction Costs Transfer of Assets on Completion of the Building Phase Proposed Revenue Charging Mechanisms Disposal of Assets Potential for Risk Transfer Proposed Contract Duration Proposed Contractual Arrangements Personnel Implications (including TUPE) Procurement Strategy and Implementation Timescales FRS5 Accountancy Treatment The Financial Case Introduction Introduction Capital Funding Requirement Impact on the NHS Organisation Income & Expenditure Account Impact on the Balance Sheet Impairments Overall Affordability Commissioner and Partner Support...59 Version 08 - For approval i

3 6 The Management Case Introduction Project and Programme Management Arrangements Project Management Arrangements Project Reporting Structure Project Roles and Responsibilities Project Communication & Reporting Arrangements Project Plan Use of Special Advisors Outline Arrangements for Workforce Planning Public Consultation Outline Arrangements for Benefits Realisation Outline Arrangements for Risk Management Outline arrangements for Post Project Evaluation NHS Wales Gateway Reviews Arrangements Contingency Plans...78 Figures Figure 1-1: OBC Process and Structure...2 Figure 2-1: Key Service Principles...4 Figure 2-2: Strategic Objectives for the Ambulance Service...7 Figure 2-3: Problems with the Current Estate and Service Model...8 Figure 2-4: Functions of Ambulance Resource Centres (ARC)...11 Figure 2-5: Functions of a Make Ready Depot (MRD)...12 Figure 2-6: Benefits of the new Make Ready concept...13 Figure 2-7: Location of ambulance stations in North East Wales...14 Figure 2-8: Service Disposition in North East Wales...15 Figure 2-9: Existing Costs Figure 2-10: The Case for Change in North East Wales...16 Figure 2-11: Objectives and Benefits of the Proposed Investment...18 Figure 2-12: Potential Scope...19 Figure 2-13: Main Risks...20 Figure 3-1 Summary of SOC Shortlisted Options...23 Figure 3-2: Revised SOC Option Shortlist...24 Figure 3-3: Short-listed OBC Options...25 Figure 3-4: Impact on Estate Configuration...26 Figure 3-5: Benefit Criteria...27 Figure 3-6: Benefit Appraisal Results...28 Figure 3-7: Economic Appraisal Methodology and Assumptions...31 Figure 3-8: Key Capital Assumptions...35 Figure 3-9: Capital Costs Figure 3-10: Capital Costs incorporating Optimism Bias...37 Figure 3-11: Key Revenue Assumptions...38 Figure 3-12: Revenue Cost Impact of Shortlisted Options Figure 3-13: Economic Appraisal...41 Figure 3-14 Summary of Results ( 000)...43 Figure 3-15: Cost per Benefit Point Analysis...44 Figure 3-16: Switching Values Change in Cost Items to Equal Option Figure 3-17: Cost Benefit Efficiency Frontier...46 Figure 3-18: Analysis of Risk Levels Figure...47 Figure 3-19: Summary of the Risk Appraisal Results...48 Figure 3-20: Summary of Overall Results...50 Figure 4-1: Risk Transfer Matrix...54 Figure 5-1: Capital Funding Requirement excl Optimism Bias ( 000)...56 Figure 5-2: Capital requirements for WAST ( 000)...57 Figure 5-3 Summary of WAST Financial Appraisal ( 000)...57 Figure 5-4: Projected balance sheet impact of scheme 2009/10 to 2013/14 ( 000)...58 Figure 6-1: Decision Making Structure...62 Version 08 - For approval ii

4 Figure 6-2: Project Board Membership...69 Figure 6-3: Tripartite Project Group Membership...70 Figure 6-4: Project Milestones...72 Figure 6-5: Special Advisors within the Framework Partnership...73 Appendices Appendix A Analysis of Non Financial Benefit Scores...79 Appendix B Economic Appraisal...81 Appendix C OB Forms...82 Appendix D Optimism Bias...83 Appendix E Non Financial Risk Assessment...84 Appendix F Letters of Support...86 Appendix G Benefits Realisation Plan...92 Appendix H Risk Management Plan...95 Appendix I Gateway Risk Potential Assessment...99 Version 08 - For approval iii

5 Executive Summary Introduction 1. This Outline Business Case (OBC) seeks approval for the Welsh Ambulance Service NHS Trust to invest an estimated m (at MIPS FP index 530 including VAT but excluding optimism bias) to contribute to the development of an Ambulance Resource Centre (ARC), as part of a shared facility with North Wales Fire and Rescue and Police, in Wrexham and a Make Ready Depot (MRD) in Flintshire.. 2. In addition to the capital requirement outlined above, the Trust is seeking strategic capital charges support of 449k associated with the proposed investment. The Strategic Case 3. The Strategic Case sets out the strategic context and case for change underpinning the need for the proposed development and specifically addresses national, organisational and local factors impacting on the proposals presented within the OBC. Specifically it considers the impact of the following: National policy and direction for public services in Wales The overall organisational and estates strategies for Welsh Ambulance services The local needs in North East Wales 4. In September 2008, WAST published its estate development programme in a strategic outline case (SOC) Introducing Make Ready Facilities. 5. The SOC identified a proposed way forward for the development of three Ambulance Resource Centres (i.e. in the Cardiff, Swansea and Wrexham areas) and ten Make Ready Depots across Wales. 6. The SOC demonstrated that the proposed model provides the best value for money and has the greatest potential for performance improvement within the capital funding available. A major benefit of the proposed changes is the opportunity provided for co-location with other emergency services and the potential for greater collaboration and co-operation. 7. The SOC recognised that further more detailed feasibility work requires to be undertaken to justify the overall conclusion and this was envisaged to be presented through a series of Outline Business Cases to reflect the roll out of the Estates Strategy across Wales. 8. Following submission of the SOC, Welsh Assembly Government (WAG) confirmed, in a letter dated 15 December 2008, its approval for the Trust to proceed with the development of an Outline Business Case (OBC) in respect of North East Wales, based on the planned construction of a new facility, in conjunction with the North Wales Fire and Rescue Service, at Wrexham The Economic Case The Short-list 9. The preferred and possible options identified within the SOC have been carried forward into the short-list for further appraisal and evaluation. All the options that were discounted as impracticable have been excluded at this stage. Version 08 - For approval iv

6 10. On the basis of this analysis, the recommended short-list for further appraisal within this Outline Business Case (OBC) is as follows: The do minimum based on retaining the existing estate configuration as a benchmark for VfM Reference position less ambitious option based on an ARC in Wrexham and no change in Flintshire Reference position SOC preferred option these are options centred on implementing the preferred direction of travel as set out in the SOC, which involve introducing the MRD concept Reference position more ambitious option options that introduce the MRD concept through tri partite working 11. Six options are presented in the OBC, directly linked to the above. These are summarised in the table below. Option Shortlist Option Reference Summary Description Do Minimum existing estate configuration with facilities brought up to estate condition B standard Reference Position - ARC in Wrexham with no changes to Flintshire ambulance estate configuration but facilities brought up to do minimum standard Reference Position - ARC in Wrexham and MRD in Flintshire ARC in Wrexham shared with Police & Fire with no changes to Flintshire ambulance estate configuration but facilities brought up to do minimum condition standard ARC in Wrexham shared with Police & Fire MRD in Flintshire ARC/MRD in Wrexham shared with Police and Fire to rationalise all WAST estate into Wrexham Option type Comparator Less ambitious option SOC preferred option More ambitious option More ambitious option More ambitious option Version 08 - For approval v

7 Economic Appraisal 12. The results of the Economic Appraisal is summarised in the table below. Economic Appraisal Option Description Undiscounted Net Present Cost Equivalent Annual Cost 1 Do minimum (comparator for VfM purposes) 2 ARC in Wrexham with no changes to Flintshire 3 ARC in Wrexham and MRD in Flintshire 4 Tripartite ARC in Wrexham with no changes to Flintshire 5 Tripartite ARC in Wrexham and MRD in Flintshire 6 Tripartite ARD in Wrexham rationalising all WAST estate 526, ,897 8, , ,357 8, , ,850 9, , ,841 9, , ,612 9, , ,854 9,460 Overall findings - the Preferred Option 13. Taken together with the results of the Non Financial Benefits and Risk assessments the overall picture from the Economic Case is summarised in the table below. Results of Appraisal Process Evaluation Results Option 1 Option 2 Option 3 Option 4 Option 5 Option 6 Benefits Appraisals (benefit points) Economic Appraisal (NPC) Risk Appraisal (risk score) , , , , , , Overall Ranking Version 08 - For approval vi

8 14. The preferred option is Option 5 - Tripartite ARC in Wrexham and Ambulance MRD in Flintshire, because this offers the best combination of benefits, costs and risks. 15. The figure below compares the benefit scores and EACs of the short-listed options. The blue line represents the cost benefit-efficiency frontier. Options that fall below this frontier cannot be optimal, as it is possible to increase the benefits delivered by either reducing costs or holding costs constant. For example, Option 4 cannot be the optimal option as it delivers fewer benefits than Option 3, but at a higher cost. More benefits can be delivered and money saved, by switching from Option 4 to Option 3. The same applies to Option 6 as this delivers less benefits but for increased costs than option The options that are represented by the blue line of the cost-benefit efficiency frontier are options 1, 2, 3 and 5. Cost Benefit Efficiency Frontier 17. The efficiency frontier shows that option 5 offers the greatest benefits and this option is also ranked highest in terms of cost per benefit point. 18. Option 5 delivers significant improvements in the services provided by implementing the make ready concept across the whole North East sector. Through the introduction of AFA s in both facilities this will allow EMS staff to reduce lost unit hours and thus provide the potential for improved performance. In addition vehicle mileage and lost unit hours associated with vehicle movements to Wrexham will be reduced with the provision of a more central fleet facility in Flintshire. 19. It will deliver significant improvements in the quality and standard of the estate through securing premises which are fit for purpose. By reducing the number and range of ambulance infrastructure this should improve the effectiveness of estate management. Version 08 - For approval vii

9 20. In addition this option provides for co-location with Fire and Police which will deliver benefits in terms of shared space and scope for closer working relationships. Overall Conclusion 21. The preferred option identified by the Trust is Option 5 Tripartite ARC in Wrexham and Ambulance MRD in Flintshire. The Commercial Case Procurement Strategy 22. The commercial case is for the provision of a tripartite facility in Wrexham and a standalone ambulance Make Ready Depot in Flintshire. 23. The construction of these premises will be managed through the NHS Design for Life: Building for Wales framework. Required Services 24. The facilities required for the three partner organisations are: Ambulance Resource Centre (ARC) in Wrexham; Fire station in Wrexham (co-located with the ARC); Police Facility in Wrexham (co-located with the ARC); Ambulance Make Ready Depot (MRD) in Flintshire; The Financial Case 25. A summary of the capital requirements for the Trust of the preferred option is shown below. Capital Requirements 2009/ / /12 Total Capital Spend - Ambulance Service , ,052 Land acquisition costs 1, ,638 Land disposal costs Asset Sale Receipts 0 0 (683) (683) Total Capital Requirement 2,407 10,283 (665) 12, The capital requirements reflect the Trust s share of the tripartite ARC in Wrexham along with the costs of establishing an MRD in Flintshire. Version 08 - For approval viii

10 27. A summary of the revenue consequences for the Trust of the preferred option is shown below. Revenue Consequences 2009/ / / / / / /16 Impairments - land 843 Impairments - buildings 1,149 Existing Depreciation 65 New Depreciation Rate of return existing assets Rate of return new assets Total Capital Charges costs 202 2, Clinical costs baseline 5,366 5,366 5,366 5,366 5,366 5,366 5,366 Non-clinical costs baseline 1,353 1,353 1,353 1,353 1,353 1,353 1,353 Building running costs baseline Ambulance Fleet Assistants Excess staff travel Stand by points Additional Building running costs Productivity savings due to AFA's (10) (120) (120) (120) (120) (120) Centralisation of stock (5) Gas Storage 0 (1) (1) (1) (1) (1) Total Operating Costs 6,871 6,898 7,257 7,262 7,262 7,260 7,245 Total Revenue costs 7,073 9,226 7,908 7,881 7,874 7,866 7, The total value of impairments is expected to be 1,992k. These have been assumed to fall in 2010/11, based on the expected contract start date (impairments have been assumed to occur only when there is certainty that the scheme will progress). 29. It is assumed that the Trust will receive additional resource to recover the impact of these impairments in the same way as previous impairments have been funded. Affordability 30. The revenue impact of the scheme from 2009/10 to 2011/12 is 835k. The key components are as follows: 449k increase in capital charges. It is anticipated that funding from WAG will be provided for these costs. 401k in ambulance fleet assistants. 17k in excess staff travel. This is expected to last for only 4 years Version 08 - For approval ix

11 30k to fund standby points. 65k in additional building running costs. 120k saving in paramedic costs. 5k one off saving in stock levels. 31. Therefore the Trust will require 449k strategic capital charge support and 387k in additional revenue support from its commissioners. Commissioner and Partner Support 32. Health Commission Wales (HCW), the current commissioner of services provided by the Welsh Ambulance Service NHS Trust, has provided a statement of support in relation to the revenue impact and to progress to FBC. A copy of this statement is attached at Appendix F. Partner support 33. North Wales Fire and Rescue Service have provided a letter of support in relation to the OBC. A copy of their letter is provided at Appendix F. 34. North Wales Police have provided a statement position regarding the OBC. A copy of their letter is attached at Appendix F. Management Case Project management arrangements 35. The proposed project structure and management arrangements are shown in the diagram below. Project Structure Version 08 - For approval x

12 Project Milestones 36. The dates detailed in the table below highlight the key milestones of the Project. Project Milestones Action Responsibility Date Completion of OBC Trust April 2009 Submit OBC to Project Board Project Director April 2009 Submit OBC to WAG OBC approval Capital Investment Board Capital Investment Board April 2009 May 2009 Develop the FBC Trust / SCP April 2010 Trust Board, partner organisations boards FBC approval FBC submission to WAG Trust Board /partner organisations Welsh Ambulance Service NHS Trust May 2010 May 2010 FBC approval by WAG WAG CIB June 2010 Enabling works SPC November 2009 Start Construction Tripartite Facility and MRD SCP April 2010 Completion MRD Flintshire SCP October 2010 Completion of Tripartite Facility, Wrexham Operational commissioning MRD SCP March 2011 Trust November 2010 Operational commissioning Tripartite facilities Trust / partner organisations April 2011 NHS Wales Gateway Review Arrangements 37. The impacts/risks associated with the project have been scored against the NHS Wales Risk Potential Assessment (RPA) for projects. The RPA scored 34, which equates to a medium risk project, and is attached at Appendix I. Version 08 - For approval xi

13 1 Introduction 1.1 Purpose This Outline Business Case (OBC) supports the Welsh Ambulance Service NHS Trust (the Trust) proposals to redevelop the Operational Estate in North East Wales. It sets out specific proposals to deliver a revised service model encompassing Ambulance Resource Centres (ARCs) and Make Ready Depots (MRDs) strategically placed to improve the productivity of front line ambulance staff, provide a systematic cleaning process and to improve performance. The revised model will be supported by a range of optimally located Social Deployment Points (SDPs) to be provided across the region A Strategic Outline Case (SOC) for the development of the Trust wide operational estate was submitted to the Welsh Assembly Government in April The SOC identified a proposed way forward for the development of three Ambulance Resource Centres (i.e. in the Cardiff, Swansea and Wrexham areas) and ten Make Ready Depots across Wales The SOC demonstrated that the proposed model provides the best value for money and has the greatest potential for performance improvement within the capital funding available. A major benefit of the proposed changes is the opportunity provided for colocation with other emergency services and the potential for greater collaboration and cooperation The SOC recognised that further more detailed feasibility work requires to be undertaken to justify the overall conclusion and this was envisaged to be presented through a series of Outline Business Cases to reflect the roll out of the Estates Strategy across Wales Following submission of the SOC, Welsh Assembly Government (WAG) confirmed, in a letter dated 15 December 2008, its approval for the Trust to proceed with the development of an Outline Business Case (OBC) in respect of North East Wales, based on the planned construction of a new facility, in conjunction with the North Wales Fire and Rescue Service, at Wrexham In this regard the primary aim of the OBC now presented is to consider how the proposals can be delivered in the North East sector The Outline Business Case (OBC) for this scheme must now be progressed urgently and followed by the production of a Full Business Case (FBC) on condition that approval is secured for the OBC. 1.2 Structure and Format of the OBC This OBC has been prepared using the agreed standards and format for Business Cases, as set out in Welsh Health Circular (2006) 001 and subsequent guidance including: Welsh Health Circular (2007) 052; The Complete Guide to The Business Case Production Process Using the 5 Case Model for SOCs, OBCs, & FBCs (WAG); and WAG/ IPAG OBC template. Version 08 - For approval 1

14 1.2.2 The format for the OBC is based on the 5 Case Model, whilst at the same time recognising the approach to OBC development as set out in the SOC. This is summarised in the diagram below. Figure 1-1: OBC Process and Structure The key components of the 5 case structure are summarised below. The Strategic Case section, which sets out the Strategic Context and the Case for Change, together with the supporting investment objectives for the Scheme. The Economic Case section, which demonstrates that the NHS Wales has selected the choice for investment which best meets the existing and future needs of the Service and optimizes Value for Money (VFM). The Commercial Case section, which outlines the content of the proposed Deal. The Financial Case section, which confirms funding arrangements and affordability and explains any impact on the balance sheet of the Organization. The Management Case section, which demonstrates that the scheme is achievable and can be successfully delivered to cost, time and quality. Version 08 - For approval 2

15 2 The Strategic Case 2.1 Introduction The purpose of this section is to explain and revisit how the scope of the proposed project or scheme fits within the existing business strategies of NHS Wales and provides a compelling case for change, in terms of the existing and future operational needs of the Trust Specifically this section of the Outline Business Case (OBC) sets out the strategic context and case for change underpinning the need for the development. It covers the following areas: The public service context for in Wales The overall strategy for the Welsh Ambulance Service The estates strategy for the Welsh Ambulance Service The local context for the proposed development in North East Wales The discussion in these areas shows a clear link between: National policy and direction for public services in Wales The overall organisational and estates strategies for Welsh Ambulance services The local needs in North East Wales In particular, this section of our report shows the strong links between these policies and strategies and the drivers of joint working with other public bodies and how this joint work can be used to deliver better services, more efficiently for citizens in Wales. 2.2 The Public Service Context for Wales The public service context is set out in two key documents that outline the Welsh Assembly Government s vision and principles for the delivery of public services in Wales: Making the Connections Beyond Boundaries Making the Connections In October 2004, the Welsh Assembly Government published its vision for public services in the report Making the Connections: Delivering Better Services for Wales Public services were identified as a key priority for the Welsh Assembly Government s second term. In particular, the report set out a distinctive and ambitious vision for the way public services should be designed and delivered in and for Wales This radical vision of a Welsh public service is one that sees shared common goals, with people working across functional and organisational boundaries. This vision would bring together the different elements of the public service in a more integrated way to create greater dynamism, with more efficient and effective service delivery. Version 08 - For approval 3

16 2.2.5 This approach responded to the major challenge for the second Assembly term, to ensure that the extra investment in public services made in previous years had the maximum possible impact both improving the quality and extending the scope of services for people in Wales The report set out four key principles, which are summarised in the table below. Figure 2-1: Key Service Principles Principle Citizens at the centre Equality and social justice Working together as the Welsh Public Service Value for money Explanation Bringing citizens and communities into the centre of the way public services are designed and delivered, so they are more responsive to the needs of users Providing every citizen with the opportunity to contribute to the social and economic life of Wales, promoting equality of opportunity for all Improved service delivery to be achieved by more co-ordination between providers to deliver sustainable, top quality, responsive services. These should be delivered by whichever organisations are best placed to secure the outcome required. In many cases, this will involve partnership within public services as well as with the voluntary and private sectors People in Wales should get the greatest possible value from the investment in public services. The resources going to front-line service delivery should be maximised This approach is both radical and pragmatic, focusing on providing responsive high quality services that meet the needs of Wales citizens. The expectation is that service providers will work together, whether they are in separate organisations within the public and private sectors, with the primary focus being value for money services delivered to citizens This citizen model sets an important direction of travel for public service providers indicating that delivering services which meet citizen s needs would be the primary consideration for the public sector. This should not be constrained by traditional approaches or organisational boundaries. Beyond Boundaries The Welsh Assembly Government established the Beyond Boundaries review, as part of the action plan for implementing the Making the Connections strategy for improving public service delivery in Wales One of the principal aims of the review, which was published in 2006, was to identify improvements in the arrangements for local service delivery which are as radical and innovative as necessary The two key pressures identified by the review were: The increased expectations of public services from more informed and demanding citizens The pressure on resources to deliver those services Version 08 - For approval 4

17 These pressures were seen as particularly acute in Wales because of: The concentration of high levels of social need, higher delivery costs in areas of sparse population and high levels of chronic ill health compared to England The level of growth in public expenditure in Wales being linked to that in England. This means that the Welsh pound must be made to go further and be applied to better effect, to address the greater needs of Wales The report indicated a number of problems with the delivery of public services: Complexity - different governance regimes, with departments working in silos and fragmentation in delivery Inadequate capacity due to over-stretched leadership, strategic capability, and expertise Organisations were unambitious, unchallenging and not sufficiently innovative The report confirmed the benefits of the citizen as opposed to a consumer model as the way of responding to these challenges and delivering better public services in Wales. A range of features of the citizen model and what this means for public sector organisations delivering services are set out, particularly: Services are joined-up and personalised, so business processes between organisations and sectors are congruent and complementary Organisations pool sovereignty and resources to improve and deliver outcomes for citizens Efficiency and effectiveness are strong cultural imperatives There is a rapid response to professional, technical and demographic change The focus suggested by the report should be on integrated services that meet citizen s needs, with a high value placed on responsiveness and efficiency, over particular organisational self interest Although the report considers a range of partnership models, no single model is proposed as a preferred solution or approach. Instead the emphasis is on principles and benefits of joint working. In particular, the report suggests: It is easier to obtain better value for money across organisations rather than in an individual organisation There are substantial benefits in aligning budgets and service objectives Joint working provides more capacity so skills and expertise can be applied to develop better services This means that it is fundamentally easier to address capacity constraints and deliver innovative and responsive services more efficiently across organisations working in partnership, rather than individual organisations constrained by their traditional boundaries working on a limited range of services. Version 08 - For approval 5

18 Implications for this business case These reports are important in setting the overall context for the development of ambulance services and emergency service collaboration and the specific facilities that are considered in this business case These policies show the need to take the following factors into account: Providing services that are designed to best meet citizen s needs and engender individual citizen responsibility Working with other public sector organisations to develop more innovative services rather than those traditionally delivered and to make best use of skills and capacity within organisations The need to achieve value for money, making the Welsh pound go as far as possible 2.3 The Overall Strategy for the Welsh Ambulance Service In October 2006, the Welsh Ambulance Service NHS Trust (WAST) published Time to Make a Difference (TTMD) the plan for transforming ambulance services in Wales. This ambitious plan set the overall strategic framework for ambulance services in Wales, identifying the strategic themes, goals and objectives of the organisation WAST set out a clear vision for the organisation in the document: We will improve the health of our patients by working in partnership to deliver a range of effective and appropriate healthcare services. This complements and updates our vision set in 2005 to deliver the Highest Quality Ambulance Services for the People of Wales The overall strategy for the ambulance service in Wales is framed by the policy for the modernising health services which was set out in Designed for Life: Creating World Class Health & Social Care for Wales in the 21st Century However there are also other links between the ambulance services and wider strategy for health and social care, particularly partnership development, where the ambulance Trust has a key role to play in supporting the intention to change the pattern of services to fulfil the wish of people to remain in or return to their homes wherever possible The Trust also stated its intention to work with the other emergency services within the framework of Making Connections, to ensure that there is effective co-ordination of activities between the three emergency services. The benefit of this collaboration would help provide services more effectively for citizen s needs and benefits for the three emergency organisations. Version 08 - For approval 6

19 2.3.6 The specific strategic objectives identified in TTMD are set out in the table below. Figure 2-2: Strategic Objectives for the Ambulance Service Objective 1. Clinically Effective Emergency Medical Services 2. Improving Appropriateness & Adding Value 3. Reliable, Competitive Patient Care Services 4. Financial Management 5. Organisational and Staff Development Summary of theme / goal The way in which appropriate care, based on the best scientific evidence available, is provided to patients in time to make a difference Ensuring the Trust delivers to each individual citizen the information, advice or care most appropriate to their needs Modernising the Patient Care Service to further develop its reliability, punctuality and competitiveness whilst exploring opportunities to support Emergency Medical Service provision where appropriate Effective financial management, ensuring the Trust delivers services within budgeted levels, manages all aspects of its finances effectively Ensuring that there are effective and robust management structures and processes in place that support staff to deliver the best level of service for all patients. To create an organisation that works, behaves and looks differently, delivering the full range of improvement goals. 6. Infrastructure & Environment Ensuring that there are the right supporting mechanisms in place to effectively deliver the operational aspects of our services. Ensuring the Trust has the most appropriate infrastructure, equipment and logistic support to ensure effective service delivery. 7. Emergency Preparedness & Business Continuity A single framework for civil protection capable of meeting the challenges of the twenty-first century, particularly emergency preparedness and business continuity where the Trust is defined as a Category 1 Responder These strategic objectives are comprehensive and far reaching, reflecting the organisation s goal to modernise services and provide high quality services for Wales citizens Underpinning this primary objective are the broader supporting goals that include: Optimising the infrastructure to promote effective service delivery Effective financial management to make the best use of resources Organisational and staff development to encourage innovation and improvement Version 08 - For approval 7

20 Working with other organisations, particularly the other emergency services These strategic goals and objectives also reflect some of the themes from the national strategies Making the Connections and Beyond Boundaries. These move public service organisations away from a silo based mentality and traditional models of delivery to ones striving to achieve high levels of service delivery for citizens, embracing innovation with good value for money and partnership working These themes are also reflected in the ambulance service s estates strategy, which is discussed below. 2.4 The Estates Strategy for the Welsh Ambulance Service In September 2008, WAST published its estate development programme in a strategic outline case (SOC) Introducing Make Ready Facilities The estate development programme in the SOC embodies the principles of both national policy and the wider ambulance service strategy TTMD, identifying the problems with the current services and estate and solutions to deal with these issues The SOC does not however simply choose to replicate and renew existing facilities. Instead, the strategy proposes a new concept of make ready facilities. These are designed to both improve the quality of service delivery and help achieve better value for money by introducing new innovative ways of working within the ambulance service as well as obtaining advantages from working in partnership with other emergency services through a tri partite approach. Problems with the current estate and service model The SOC sets out the case for change by identifying a range of problems with the condition of the estate, the location of stations and the service model. These issues are summarised in the table below. Figure 2-3: Problems with the Current Estate and Service Model Area Estate condition Station locations Service impact of location issues Problem Over a third of the estate is in a sub-standard condition (category C or D), with backlog maintenance amounting to 13.3m, which is 82% of the estate s net book value The service operates out of 88 ambulance stations across Wales, acquired over many years so they are not optimally located. A review by ORH Consultancy demonstrated that only 12 (13%) of the existing stations were in the optimum location to meet response time targets The sub optimal location of stations means that there is a greater emphasis on ambulance stations acting as a fixed base for vehicles and crews rather than deploying them at locations closer to the point of greatest demand Version 08 - For approval 8

21 Area Operational service issues Lost time Problem The existing service model requires ambulance crews to prepare their own vehicles for operational duty which includes stocking, cleaning and disinfection. As crews are spending increasing amounts of time away from their base ambulance stations, this has reduced the amount of time operational crews have to check and clean their vehicles. Consequently the Trust is unable to provide appropriate assurance with regards to infection control in ambulance vehicles, leaving the Trust vulnerable to claims of negligence. Ambulance crews have to prepare their vehicle, which is acknowledged as being an expensive and inappropriate use of trained clinical professional ambulance crew time. These tasks are not optional but essential to ensure that vehicles achieve the required Health & Safety standards for the provision of transportation of patients within a safe and clinically clean environment. Proposals for a new service model The proposal contained within the SOC is one of the main mechanisms geared towards addressing these problems and achieving the goals within Time to Make a Difference, particularly the requirement to get the right people in the right place as quickly as possible The SOC states that the traditional approach of despatching a front line ambulance to every call has to be modified to ensure the appropriate response is made for each call. This new approach will require: An estate infrastructure of the right size and in the correct locations designed around the needs of the user. A fleet of properly equipped ambulances and other vehicles, and highly trained staff appropriate for the delivery of the new models of care. Improved efficiency in the deployment of trained staff so that they are always able and equipped to respond to every emergency call. Effective communication systems, improved resource planning and the optimum use of information through the application of modern technology The SOC concludes that developing Make Ready Depots is the best way of putting in place the infrastructure needed to meet these requirements. This is the preferred direction of travel proposed by the SOC The Make Ready concept A key principle underpinning the SOC is the concept of Make Ready. This draws on best practice developed in US Ambulance Services. The concept was designed to address issues of: Cost effective operational services Litigation arising from cross infection control issues Version 08 - For approval 9

22 2.4.9 The report by Operational Research in Health The study of Emergency Ambulance Cover further underpins the use of Make Ready facilities as a viable concept for WAST The process of Make Ready can be defined as the procedure of ensuring that front line Ambulance fleet will be: Cleaned to attain the necessary hygiene standard including the restocking of an ambulance with optimum levels of medical equipment Maintained to ensure vehicle availability for each shift and ready for deployment Effectively managed on a day to day basis to eliminate the causes and effects of lost ambulance unit hours, arising from vehicle washing, stocking, fuelling and basic maintenance checking The term Make Ready Depot (MRD) is defined as a building within which there will be a number of user functions. The four main functions are: Welfare and office facilities for staff Garaging / parking for vehicles Make Ready Fleet maintenance The SOC discusses two types of facilities that incorporate the Make Ready concept. These definitions have since been refined and enhanced, with the addition of standby deployment points as a further layer of facility infrastructure. The enhanced definitions discussed below are used in this OBC. Definition of ARC, MRD and deployment points The enhanced definitions are based upon a Hub and Spoke model made up from Ambulance Resources Centres as the hub, Make Ready Depots as spokes, supported by social deployment and deployment points, which are nodes The operational principles are: There will be a number of ARC in Wales covering the large areas of population A larger number of MRDs covering less densely populate areas Active planned management using social deployment points and deployment points across Wales to react to locally known hot spots Ambulance Resource Centres will provide support to a larger population and contain a number of key activities which support the front line service delivery for this population and support to the MRDs within the locality The detailed functions of the Ambulance Resource Centre (ARC) are set out in the table below. Version 08 - For approval 10

23 Figure 2-4: Functions of Ambulance Resource Centres (ARC) ARC Function Vehicle parking Cleaning and restocking Major Routine service Staff base for frontline crews Management base Training facilities Specification All the vehicles will be under cover either, under a lean-to or with enclosed bays depending upon the vehicle type and if they are on standby. All vehicles will be plugged into charging facilities when not is use to maintain the equipment and vehicle at the correct temperature for immediate use. One of the developments associated with the ARC will be to provide the ability to clean and restock vehicles using a new grade of staff AFAs (Ambulance fleet Assistants) which will facilitate the release of EMS crews to focus on front line duties. The principle is that EMS vehicles and Rapid Response Vehicles (RRVs) will be cleaned at the end of every 12 hour shift and restocked with medical equipment ready for use. EMS vehicles and RRVs will go through a routine deep clean every week. Patient Care Service (PCS) and Hospital Courier Service (HCS) vehicles will be cleaned every day and deep cleaned every week The major routine maintenance i.e. servicing or repairs other than body work, will be carried out by a vehicle maintenance team at the ARC Bodywork repairs will be out sourced to private contractors The ARC will be used as a reporting staff base for all ambulance crews who work out of the facility. The ARC will also be the reporting base for vehicle maintenance, AFA s admin support staff and managers. The ARC will be the management base for the ARC and MRDs within the locality and contain the necessary admin and IT infrastructure to support the delivery of services. The premises will contain sufficient space to allow for regular update training for paramedics and other staff and will be equipped with the appropriate training equipment such as manikins The training space will also be used by the service to provide training to the public through organised courses and therefore address the Welsh Assembly Government s wishes for public services to provide wider support to their communities A Make Ready Depot (MRD) will provide a range of services to a smaller population than an ARC and be the spoke within the model. They will be located in strategic positions, many on good road access points, and support the social standby and deployment points within the locality Version 08 - For approval 11

24 The detailed functions of the Make ready depot (MRD) are set out in the table below. Figure 2-5: Functions of a Make Ready Depot (MRD) MRD Function Vehicle parking Cleaning and restocking Minor Vehicle Maintenance Staff base for frontline crews Reporting Base CPD training facility Specification All the vehicles will be under cover, either under a lean-to or with enclosed bays depending upon the vehicle type and if they are on standby. All vehicles will be plugged into charging facilities when not is use to maintain the equipment and vehicle at the correct temperature for immediate use. One of the developments associated with the MRD will be to provide the ability to clean and restock vehicles using a new grade of staff AFA s (Ambulance fleet Assistants) which will facilitate the release of EMS crews to focus on front line duties. The principle is that EMS vehicles and Rapid Response Vehicles (RRVs) will be cleaned at the end of every 12 hour shift and restocked with medical equipment ready for use. EMS vehicles and RRVs will go through a routine deep clean every week. Patient Care Service (PCS) and Hospital Courier Service (HCS) vehicles will be cleaned every day and deep cleaned every week The AFA s will as part of the cleaning routine check vehicles fro minor faults i.e. light bulbs, wind screen wipers, any major repairs required will go to ARC. The MRD will be used as a reporting staff base for all ambulance crews who work out of the facility The MRD will also be the reporting base for AFA s admin support staff and locality managers. The MRD will have a small room to facilitate CPD training by staff The ARCs and MRDs will also be complemented by: Social Deployment Points (SDPs), which would provide limited facilities to park vehicles and rest facilities. These will be co-located where possible with other emergency services, in particular the Fire Services. Deployment points, which are lay-bys, bridges or other stopping areas where there is a know hot spot. Due to fluctuations in demand these move during the day so there are likely to be many hundreds of these points which may only be used a certain days or occasions. For example, a deployment point may be a lay-by near a major road junction between 6.30 am and 8.30, then may move to near a school between and 1.30 and afterwards outside a factory between 4.30 to 6.00pm The proposals in the SOC include: Ambulance Resource Centres (ARCs) in three major urban areas (Cardiff, Swansea and Wrexham) Version 08 - For approval 12

25 Make Ready Depots (MRDs) in other more populated areas Social Deployment Points strategically located across the region These facilities will be strategically located in close proximity to Accident and Emergency Departments and wherever possible other emergency services. Benefits of the make ready concept The SOC identifies a range of benefits that can be generated using the Make Ready concept. These are summarised in the table below. Figure 2-6: Benefits of the new Make Ready concept Benefit Optimise estate location Improved service performance How achieved Optimise the location of ambulance crews and vehicles to sustain the standards of performance set out in the Annual Operating Framework. This will also ensure equality for the geographical areas covered by this investment. Putting in place an estate that will enable the deployment of a new Operational Service model and improve operational efficiency. This will contribute to clinical effectiveness by ensuring faster arrival of skilled care to patients with life threatening and serious conditions. The overall objective is to deliver the right care to patients in time to make a difference and improve clinical outcomes Premises quality Better resource utilisation Improved synergy Reducing administration By 2015 the estate should comprise facilities which are both fit for purpose and of a suitable standard to comply with recognised benchmarks and quality standards, including latest infection control recommendations Increase the productivity of front line ambulance staff by increasing productive hours Maximise the synergy and partnership working with related services such as Accident and Emergency departments and with other emergency services Less administration will be required from a reduction in the number and age of properties within the estate portfolio The preferred direction of travel Overall, the SOC proposes the development of new types of facilities that will improve the delivery of services to citizens in Wales. This is the preferred direction of travel proposed in the SOC. The plans for working with other services are concretely shown in the SOC through formal letters of support from all three Regional Fire Services in Wales The SOC demonstrates that the proposed model will provide the best value for money and has the greatest potential for performance improvement within the capital funding available. A major benefit of the proposed changes is the opportunity provided for co- Version 08 - For approval 13

26 location with other emergency services and the potential for greater collaboration and cooperation The way that the proposals in the SOC have been developed for North East Wales is discussed in the paragraphs below. 2.5 The Local Context for the Proposed Development in North East Wales In April 2009 WAST published a report A vision for the development of estate in North East Wales which gave an overview of the strategic vision for the development of the Welsh Ambulance Service s estate in North East Wales. This report set out how the proposals in the SOC Introducing make ready facilities would be implemented in North East Wales. Baseline assessment of services in North East Wales There are two main localities in the North East Wales area. The map below highlights: Flintshire and the four ambulance stations within that locality Wrexham and the two ambulance stations within that locality. Figure 2-7: Location of ambulance stations in North East Wales Version 08 - For approval 14

27 2.5.3 The table below analyses the disposition of stations, staff and facilities within the two localities. The analysis shows: Both cover a similarly sized geographic area, with a similar number of staff and vehicles Wrexham Ambulance Station and Workshop is the largest facility, housing 46% of total staff, The poor state of facilities in both localities Figure 2-8: Service Disposition in North East Wales Site Services Estate category Number of staff (wte) Number of vehicles Wrexham (covers 195 square miles) Wrexham Chirk Ambulance Station & Workshop Ambulance Station Overall rating condition D Overall rating condition D Flintshire (covers 189 square miles) Flint Holywell Mold Queensferry Ambulance Station Ambulance Station Ambulance Station Ambulance Station Overall rating condition D Overall rating condition D Overall rating condition D Overall rating condition D Financial Overview The existing revenue costs of the ambulance services provided from the existing estate in North East Wales is summarised in the table below. Figure 2-9: Existing Costs 000 Wrexham Flintshire Total Pay 2,643 2,723 5,366 Non Pay 1, ,504 Capital Charges Total Revenue 4,021 3,008 7,029 NBV of Estate ,365 Capital charges include depreciation based on NBV written down over remaining asset life Estate NBV figures do not take account of prevailing market conditions. The impact on disposal values has however been factored into both the Economic and Financial Cases. Version 08 - For approval 15

28 The case for change in North East Wales The report set out compelling reasons to redevelop the Trust s estate in North East Wales, which are shown in the following table. Figure 2-10: The Case for Change in North East Wales Issue Unsuitability of the current Wrexham Ambulance Station Reason for change The physical condition of the Wrexham Ambulance Station is Category D, defined as presenting a serious risk of imminent breakdown. There are significant difficulties with space, location and energy utilisation which have to be addressed. Wrexham is the largest conurbation in North Wales and the ambulance facilities are central to service provision throughout the region. Backlog maintenance of 0.3 million is required to tackle repairs and maintenance over the next few years; even if this investment is made substantial problems with location and space will remain. A total of million is required to bring all of the estate up to Category B standards Unsuitability of other local Ambulance Stations The other five Ambulance Stations in the N E Wales area all have problems to be addressed in the next three years as they are also in poor physical condition (Category D) The existing facilities do not readily lend themselves to supporting the MRD concept particularly in relation to enhanced standards of vehicle cleaning The location of these other stations is far from optimal and emergency response time performance could be improved by undertaking a review of the estate in this area. The rationalisation of stations would also offer further opportunity for tri partite working with the Fire and Police Services Collaboration with Emergency Services The Trust is committed to tri partite working with the Police and Fire Services wherever possible to improve services to the people of Wales The redevelopment of the estate in Wrexham provides a real opportunity for the North Wales Police, Fire and Rescue Service and the Trust to work together in optimising benefits to the public through joint working, shared location and improved efficiency. The proposed project would be a practical application of the strategic direction set out in Making the Connections. Local Authority Support Wrexham Council are very supportive of the opportunity to develop a shared Police, Ambulance and Fire Service Station in Wrexham. Their local plans would benefit from the Fire Service relocating from its existing site in Wrexham, which would generate further benefits for wider public services Version 08 - For approval 16

29 Issue Increased Productivity Reason for change Significant productivity gains from a new model of service where ambulance crews spend much less of their time on washing and stocking vehicles and more time delivering front line services It is anticipated that the productivity savings in North East Wales could be in excess of 3,000 hours per annum The benefits of tri partite working In November 2008 WAST submitted a proposal to the Welsh Assembly government for the development of a business justification case for: The development of a new ARC on a shared site with the Fire Service in Wrexham, a review of the options for shared facilities and joint working on the site Re-designation or disposal of other ambulance stations in the area in collaboration with the Police and Fire Services In December 2008, WAST received approval to proceed with the development of an Outline Business Case (OBC), based on the planned construction of a new facility. One of the key factors in approving the proposal to develop the OBC was the scope for tri partite working with North Wales Fire and Rescue Service and North Wales Police, through the North Wales Emergency Services Programme Board Collaboration between the emergency services in North Wales at the North Wales Emergency Services Programme Board had identified benefits that should be explored by developing plans for a tripartite solution in North East Wales. Consequently, the project was expanded to include feasibility of a tripartite solution with WAST and both North Wales Fire & Rescue Service and North Wales Police WAST has received formal confirmation from Police and Fire services that they wish to engage with WAST in this OBC, increasing the scope for practical tri partite working, as well as enhancing efficiency, better value for money and improvements in services. Main outcomes and benefits The investment objectives of the proposed investment are summarised in the table below, which also shows the rationale from the case for change, the benefits and measure of success set out in the SOC. It also identifies the benefit criterion for the assessment of options within the Economic Case. Version 08 - For approval 17

30 Figure 2-11: Objectives and Benefits of the Proposed Investment Investment Objective Case for Change Benefit Criteria Measure (SOC) Improve service performance Unsuitable and sub optimally located premises have degraded response time performance Enable WAST to achieve and sustain improvements to patient and community focussed services Deliver and sustain performance targets as set out in Annual Operating Framework Higher quality premises Poor quality estate with high cost of backlog maintenance and serious risk of imminent breakdown Improve the quality and standard of the estate Provide for much higher standards of cleaning and enhanced infection control Provide facilities which are fit for purpose and address staff welfare and community integration Reduce the percentage of property deemed unfit for purpose from 35% to 14% at the end of the programme Reduce backlog maintenance from 13.3m to 8.1m Facilities which enable the preparation of ambulance vehicles for immediate delivery of frontline services (including compliance with infection control standards) Better resource utilisation Significant productivity gains from new model of working Increase productivity of ambulance resources and improve fleet utilisation A demonstrable reduction in lost productive hours by using support staff to prepare ambulances for deployment in suitably designed facilities Improve asset management Increasing productivity by an estimated 3,000 hours per annum in NE Reducing administrative burden by having 20% fewer properties to manage Version 08 - For approval 18

31 Investment Objective Case for Change Benefit Criteria Measure (SOC) Improve synergy with other services Collaboration with other emergency services to optimise benefits to the people of Wales Take advantage of local authority support to help improve facilities and services Enable greater co-operation and sharing with other emergency services with increased opportunities for co-location and collaboration To maximise the synergy and partnership working with related services e.g. A&E departments and other emergency services 2.6 Potential Scope This section describes the potential scope for the project in relation to the above business needs and the changes since submission of the Strategic Outline Case (SOC). The potential scope has been assessed against a continuum of need ranging from: a minimum essential or core requirements/outcomes an intermediate essential and desirable requirements/outcomes a maximum scope essential, desirable and optional requirements/outcomes The options within these ranges are considered within the Economic Case. Figure 2-12: Potential Scope Minimum Intermediate Maximum Range of business and user functionality (service content) Current estate configuration upgraded only to meet required condition standards Ambulance Resource Centre (ARC) and Make Ready Depot (MRD) Ambulance Resource Centre (ARC) and Make Ready Depot (MRD) with incorporation of tripartite co-location with Fire and Police Requirement for underpinning Services This will require little change to the current requirements form underpinning services This will involve a revised service model focussing on the make ready concept and providing wider functionality whilst concentrating the estate in a reduced number of locations The requirement for underpinning services is similar to the intermediate scope but will include colocation with Fire and Police Version 08 - For approval 19

32 2.7 Main Risks The main business and service risks associated with the potential scope for this project are shown below, together with their counter measures. Figure 2-13: Main Risks Main Risk Countermeasures Design, Construction and Planning Risks Design quality Site acquisition Build risks Current site risks Planning risks The Trust will continue to work closely with its Designed for Life PSCP, staff and other key stakeholders to ensure that the design is fit for purpose and meets the future needs of the service The Trust will continue to work closely with Welsh Assembly government to secure suitable sites that meet the operational needs of the proposed facilities Once approval to proceed is granted the Trust will develop and agree a programme with its PSCP to ensure timely completion of the programme A thorough assessment of existing sites has recently been undertaken and this would be used as the basis for assessing the suitability from upgrading and refurbishment The Trust will work closely with the planning authorities to secure the required approvals sharing relevant information and supporting this with face to face dialogue Service Risks Productivity risk Demand risk Service model risk Staffing risks Co-location risks Deployment point risks The Trust will set a target for productivity improvements which it will agree with local managers and adjust budgets accordingly. It will then closely monitor progress against target. The Trust will size future accommodation requirements to match anticipated demand both in terms of vehicles and staff The facilities will be specifically designed and configured to support the proposed service model and facilities will be in place to reflect and underpin any changes to service provision The Trust will commence early communication with staff regarding changes in the location of their reporting base. In addition excess travel allowances will be paid to staff in instances where distances from home to the reporting base are increased. The Trust will work with other emergency service partners to agree the benefits of co-location including principles for sharing accommodation and facilities Social deployment points will mainly be located within existing fire stations and the Trust will work closely with the local fire services to secure these on a sustainable basis Version 08 - For approval 20

33 Main Risk Maintenance risks Countermeasures The Trust is clearly committed, as part of the investment proposals, to bring all of its operational estate in the North East up to an acceptable condition standard. Stakeholder Risks Lack of cooperation from partners Local population Both Fire and Police authorities are fully committed to the joint development of the OBC and are actively involved in its development including agreement of key principles and accommodation and service requirements The Trust will work closely with communities to set out the proposed changes, their benefits and impact on the local settings These risks will be used to assess the options within the Economic Case. 2.8 Constraints The project is subject to the following constraints: There must be no adverse impact on operational performance following the reconfiguration of the estate Must be affordable to all partners both in terms of capital and revenue Business continuity whilst building work is being undertaken Joint solutions must incorporate physical co-location in a single building 2.9 Dependencies The project is subject to the following dependencies: An appropriate range of suitably located social deployment points must be secured Changes in accommodation requirements during or shortly after development Appropriately sized and located sites must be available to support new developments Version 08 - For approval 21

34 3 The Economic Case 3.1 Introduction In accordance with the Capital Investment Manual and requirements of HM Treasury s Green Book (A Guide to Investment Appraisal in the Public Sector), this section of the OBC documents the wide range of options that have been considered in response to the potential scope identified within the Strategic Case. 3.2 Critical Success Factors The key Critical Success Factors (CSF s) considered within the SOC were as follows: CSF1: Strategic fit Does the option give the Trust sufficient long term flexibility and ability to change in response to new service demands Does the option allow co-location with other emergency services Does the option facilitate integration with other health service providers CSF2: Achievability Is the option deliverable given the Trust s capacity and capability to manage the subsequent change programme CSF3 Affordability Is the option likely to be funded in capital and revenue terms CRF4 Timescale for implementation Is the option deliverable within the strategic timescale These have been revisited in the context of the OBC and remain valid. 3.3 The Long-Listing of Options A long list of options was generated on a Trust wide basis as part of the SOC development The development of the long list considered potential solutions in line with the options framework which generates options within a range of categories of choice. Each is then assessed against the investment objectives and critical success factors. This allowed a preferred direction of travel to be established within the SOC Subsequently the individual OBCs, of which this is the first, consider the shortlist of options for individual geographically based investment proposals taking account of local factors and the agreed direction of travel. The Trust consider this approach still to be valid and as such we have not revisited the options long-list presented in the SOC. Version 08 - For approval 22

35 3.3.4 A summary of the options framework for each category of choice is summarised below. Scope choices in terms of coverage What level of emergency service performance and delivery of the 8 minute response standard is the Trust aspiring to deliver. Service Solutions choices in terms of solution Geographically, to what extent does the Trust implement the new service model. Service Delivery choices in terms of delivery This was to be considered as part of the development of the individual OBCs. Implementation - choices in terms of the delivery timescale How the Trust would manage the modernisation and rationalisation programme across Wales. Funding option choices in terms of financing and funding What capital and / or revenue funding routes are available. 3.4 The Short-Listed Options The analysis provided within the SOC concluded that three options be shortlisted and taken forward. These are summarised in the table below along with their assessment against the options framework outlined above. Figure 3-1 Summary of SOC Shortlisted Options Option Framework Do minimum Option 2 Option 3 Scope Current obligations Sustain targets Sustain targets Service Solution Existing estate Ambulance Resource Centres (ARCs) Mainly Make Ready Depots (MRDs) Service Delivery To be determined in OBCs To be determined in OBCs Implementation Opportunistic Prioritised Prioritised Funding Public capital and revenue Public capital and revenue Public capital and revenue Version 08 - For approval 23

36 3.4.2 These options were subsequently refined by the Trust as part of the process to develop the SOC. The revised short list that was developed is shown in the table below. Figure 3-2: Revised SOC Option Shortlist Original Option Ref Revised Option Ref Description 1 1 Do minimum: existing ambulance station configuration 2 2 Large ARCs: Wrexham, Bangor, Cardiff, Ystradmynach, Swansea, Carmarthen 2 3 Large ARCs: Cardiff, Ystradmynach, Swansea, Carmarthen Small ARCs: Wrexham, Bangor, Colwyn Bay, St Asaph 3 4 Large ARCs: Cardiff, Swansea, Wrexham MRDs: North 3, Central & West 3, South East Following an economic appraisal of the options outlined above, the SOC concluded that Option 4 Mainly MRDs produced the best overall value for money and was therefore selected as the preferred direction of travel Whilst this OBC is intended to explore different ways in which the preferred direction of travel can be implemented in North East Wales, the preferred option is however not fixed. The OBC therefore also needs to take account of relevant changes in circumstances since the SOC was submitted Consequently, the Trust has revisited the shortlisted SOC options as part of the development of the OBC to ensure that the preferred direction of travel is: Complete, reasonable and practical Maximises the scope for tri partite working (a requirement of WAG s approval to proceed with the OBC) without compromising the potential benefits that can be achieved moving them from the reference position to the more ambitious solutions The range of options for this OBC has been expanded from that set out in Figure 3-2 to place greater emphasis on differing degrees of estate rationalisation and consideration of tripartite solutions involving ambulance, fire and police services In light of this the Trust has identified four positions for further appraisal and evaluation. The first is the do minimum, which has been retained in line with option appraisal best practice. The other three are reference positions, which are all linked to the direction of travel identified in the SOC and take due account of the issues discussed above. Version 08 - For approval 24

37 3.4.8 The four positions are The do minimum based on retaining the existing estate configuration as a benchmark for VfM Reference position less ambitious option based on an ARC in Wrexham and no change in Flintshire Reference position SOC preferred option these are options centred on implementing the preferred direction of travel as set out in the SOC, which involve introducing the MRD concept Reference position more ambitious option options that introduce the MRD concept through tri partite working In translating these into options for the OBC, the Trust has considered six potential solutions to meeting these positions which are summarised in the table below. Figure 3-3: Short-listed OBC Options Option Reference Summary Description Do Minimum existing estate configuration with facilities brought up to estate condition B standard Reference Position - ARC in Wrexham with no changes to Flintshire ambulance estate configuration but facilities brought up to do minimum standard Reference Position - ARC in Wrexham and MRD in Flintshire ARC in Wrexham shared with Police & Fire with no changes to Flintshire ambulance estate configuration but facilities brought up to do minimum condition standard ARC in Wrexham shared with Police & Fire MRD in Flintshire ARC/MRD in Wrexham shared with Police and Fire to rationalise all WAST estate into Wrexham Option type Comparator Less ambitious option SOC preferred option More ambitious option More ambitious option More ambitious option Each of the shortlisted options delivers a different mix of new (ARC and MRD) and retained estate and varying requirements for Social Deployment Points (SDP s). The configuration for each option is summarised in the table below. Version 08 - For approval 25

38 Figure 3-4: Impact on Estate Configuration Option Ref Estate Profile ARC MRD SDP s Retained Estate 1 Chirk, Old Wrexham, Holywell, Flint, Queensferry, Mold 2 Wrexham Johnstown, Chirk Holywell, Flint, Queensferry, Mold 3 Wrexham Flintshire Johnstown, Chirk, Holywell, Deeside, Flint, Mold 4 Wrexham (tripartite) Johnstown, Chirk Holywell, Flint, Queensferry, Mold 5 Wrexham (tripartite) 6 Wrexham (tripartite) Flintshire Johnstown, Chirk, Holywell, Deeside, Flint, Mold Johnstown, Chirk, Holywell, Deeside, Flint, Mold 3.5 Qualitative Benefits Appraisal of Short listed Options The benefits associated with each option were identified during a Workshop held on 16 April 2009 to evaluate the qualitative benefits associated with each option. The workshop was attended by a range of stakeholders representing ambulance, fire and police services. 3.6 Methodology The appraisal of the qualitative benefits associated with each option was undertaken by: Identifying the benefits criteria related to each of investment objectives Weighting the relative importance (%) each benefit criteria in relation to each investment objective Scoring each of the short-listed options against benefit criteria on a scale of 0 to 10 Deriving a weight benefits score for each option A detailed analysis of the scores is provided at Appendix A. 3.7 Qualitative Benefits Criteria The benefits criteria were weighted as follows for each investment objective. The links between the investment objectives and the benefit criteria is provided in Version 08 - For approval 26

39 Figure Figure 3-5: Benefit Criteria Qualitative Benefits Achieve and sustain improvements to patient and community focussed services Increase productivity of ambulance resources and improve fleet utilisation Enable greater cooperation and sharing through co-location and collaboration Provide facilities which are fit for purpose and address staff welfare and community integration Provide for higher standards of cleaning and enhanced infection control Weight 20% 19% 17% 15% 14% Improve quality and standard of the estate 10% Optimise estate management 5% The ranking and weighting of the benefit criteria shows clearly that improvements in both service and performance rank higher than the quality of the estate in non financial terms. This should ensure delivery of a preferred option which will maximise the improvements to the patient s experience in terms of outcomes and safety as well as offering value for money from the stakeholder organisation s perspective. 3.8 Qualitative Benefits Scoring Methodology Benefits scores were allocated on a range of 0-10 for each option and agreed by discussion of the workshop participants to confirm that the scores were fair and reasonable. 3.9 Analysis of Key Results The results of the benefits appraisal are shown in the table below. Version 08 - For approval 27

40 Figure 3-6: Benefit Appraisal Results Benefit Criteria & Weight Raw & Weighted Scores Achieve and sustain improvements to patient and community focussed services Increase productivity of ambulance resources and improve fleet utilisation Enable greater cooperation and sharing through colocation and collaboration Provide facilities which are fit for purpose and address staff welfare and community integration Provide for higher standards of cleaning and enhanced infection control Improve quality and standard of the estate Optimise estate management Option 1 Option 2 Option 3 Option 4 Option 5 Option 6 raw weight raw weight raw weight raw weight raw weight raw weight TOTAL RANK Version 08 - For approval 28

41 3.9.2 The key considerations that influenced the scores achieved by the various options were as follows: Option 1 Do Minimum (comparator) This option ranks last using qualitative measures with a total weighted score of points. It fails to meet the minimum standards for the project and is only taken forward to provide a baseline for comparison with the other options This option does little to improve the quality of the service provided as it does not support the make ready concept and therefore improve standards of cleaning. In addition as paramedics will continue to be utilised to stock and wash vehicles it will involve the continued loss of operational unit hours within EMS shifts thus not delivering improvements in productivity It fails to address any requirements regarding co-location with other emergency services. Whilst it will lead to some improvements in the quality of the overall estate there will still be compromises in building layout and functionality. In addition the effectiveness of estate management will be compromised by the scale and diversity of the retained estate. Option 2 - Reference Project ARC in Wrexham with no changes to Flintshire (less ambitious option) This option ranks fifth using qualitative measures with a total weighted score of points This option does improve the quality of the service provided through securing the make ready concept in Wrexham. However, this is compromised through not delivering the make ready concept across Flintshire which will retain some of the disadvantages associated with the do minimum option As is the case with the do minimum option it does not address tri-partite co-location with fire and Police. Option 3 - Reference Project ARC in Wrexham and Ambulance MRD in Flintshire (SOC preferred option) This option ranks second using qualitative measures with a total weighted score of points It does deliver significant improvements in the services provided by implementing the make ready concept across the whole North East sector. Through the introduction of AFA s in both facilities this will allow EMS staff to reduce lost unit hours and thus provide the potential for improved performance It will deliver significant improvements in the quality and standard of the estate through securing premises which are fit for purpose. By reducing the number and range of ambulance infrastructure this should improve the effectiveness of estate management This option does not address tri-partite co-location with fire and Police. Option 4 Tripartite ARC in Wrexham with no changes to Flintshire (more ambitious option) This option ranks fourth using qualitative measures with a total weighted score of points. Version 08 - For approval 29

42 As is the case with option 2 this option does improve the quality of the service provided through securing the make ready concept in Wrexham. However, this is compromised through not delivering the make ready concept across Flintshire which will retain some of the disadvantages associated with the do minimum option It does however provide for co-location with Fire and Police which will deliver benefits in terms of shared space and scope for closer working relationships. Option 5 Tripartite ARC in Wrexham and Ambulance MRD in Flintshire (more ambitious option) This option ranks first using qualitative measures with a total weighted score of points It does deliver significant improvements in the services provided by implementing the make ready concept across the whole North East sector. Through the introduction of AFA s in both facilities this will allow EMS staff to reduce lost unit hours and thus provide the potential for improved performance. In addition vehicle mileage and lost unit hours associated with vehicle movements to Wrexham will be reduced with the provision of a more central fleet facility in Flintshire It will deliver significant improvements in the quality and standard of the estate through securing premises which are fit for purpose. By reducing the number and range of ambulance infrastructure this should improve the effectiveness of estate management In addition this option provides for co-location with Fire and Police which will deliver benefits in terms of shared space and scope for closer working relationships. Option 6 Tripartite ARC/MRD in Wrexham rationalising all WAST estate into Wrexham (more ambitious option) This option ranks third using qualitative measures with a total weighted score of points As is the case with option 5 it does deliver significant improvements in the services provided by implementing the make ready concept across the whole North East sector. It does however impact adversely on staff travel which will is likely have a knock on effect on overall productivity It will deliver significant improvements in the quality and standard of the estate through securing premises which are fit for purpose. By reducing the number and range of ambulance infrastructure this should improve the effectiveness of estate management In addition this option provides for co-location with Fire and Police which will deliver benefits in terms of shared space and scope for closer working relationships. Sensitivity Tests This analysis involved changing the weighting of the benefit criteria and eliminating the scores for the highest ranked criteria Sensitivity testing made little difference to the ranking of the options in terms of their total scores. The order of options 3 and 6 do change in both sensitivity tests, however, there base benefit scores are so close so are sensitive to minor changes in the assumptions. All other options remain unchanged in terms of their ranking. Version 08 - For approval 30

43 This demonstrates consistency over all the group scores in terms of the perception of how well each option delivers against the benefit criteria Economic Appraisal of Short listed Options Introduction This section describes and presents the economic appraisal that has been undertaken to assess the overall value for money for each shortlisted option A discounted cash flow analysis for each of the options has been undertaken over a 60 year appraisal period (plus initial construction) using a discount rate of 3.5% for years 0 to 30 and 3.0% up to year 60 in line with the requirements of HM Treasury and the Green Book Both the Net Present Cost (NPC) and the Equivalent Annual Cost (EAC) have been calculated. The EAC is used for comparison where the options have different life spans as it converts the NPC to an annual figure. Methodology and Assumptions The Trust has used the Department of Health Generic Economic Model (GEM) to conduct the economic appraisal which has been populated with the base data for each option. The key outputs from the model are available at Appendix B It should be noted that capital cash flows exclude depreciation, as this is not a cash payment. VAT is also excluded as it represents a funds flow around the Government system The economic appraisal incorporates the impact of Optimism Bias and further details of the allowances incorporates is provided within the Capital Costs section of the economic appraisal The key elements used in the economic appraisal along with the supporting assumptions are summarised below. Figure 3-7: Economic Appraisal Methodology and Assumptions Area Initial capital costs Comment VAT has been excluded. Optimism Bias has been included (see for further details). For the purposes of calculating capital costs and to ensure consistency with other prices these have been adjusted to MIPS FP 517 Q as this equates to prices for contracts let in April 2008, which is consistent with the other costs. The other costs are at 2008/09, which means that they are based on prices for the 12 months from April The equipping costs have also been adjusted to Q in order to be consistent with other costs. All costs are at 2008/09 price base; year zero has been assumed to be year 2009/10. Version 08 - For approval 31

44 Area Lifecycle costs Comment As is the case for the capital costs, building lifecycle costs reflect a constant price base of MIPS FP 530 in line with the completion of the initial construction period for all options; they have been rebased to MIPS 517 (NHS Estates Quarterly Briefing Volume 17 No.3 4/2008) to ensure consistency with all other costs. They include for all planned cyclical maintenance over the life of the concession to the Building fabric, including elements such as roof, external walls and windows; rainwater goods; external and internal doors; wall, floor and ceiling finishings, repainting and redecoration, replacement carpets, vinyls etc.; fixed fittings and furnishings and equipment replacement; mechanical and electrical engineering services excluding lamps, filters and similar consumables; Where existing buildings remain within each option for WAST, lifecycle costs for each building has been calculated based on the backlog maintenance required to bring the estate up to condition B standards. The phasing of this backlog maintenance will occur on completion of the new premises for all options (option 1 will reflect the same timing of backlog maintenance as option 2). The rationale for this is that the priority from the Trust s perspective is to ensure the new ARC & MRDs are developed before pursuing any refurbishment of current estate. This backlog maintenance will recur every 10 years as indicated by Trust Finance representatives. The current cost of per m2 for the Police and Fire Services included in the revenue costs take account of maintaining their asset at condition B. The lifecycle cost of replacing the fleet of EMS Ambulances has been factored into the appraisal, at a replacement cost of 130,000 per ambulance every 5 years as advised by Trust finance representatives. The current fleet of Ambulances totals 49, however within Options 2 to 6, a reduction of 2 Ambulances will be achievable as the centralised ARC & MRD will demonstrate more efficient use of the vehicles through maintenance and turnaround. As such the lifecycle costs of these options have been reduced to reflect this. Includes all revenue costs and transitional costs as already outlined however excludes capital charges. Version 08 - For approval 32

45 Area Opportunity costs / land acquisitions & sales Comment Opportunity costs associated with land and buildings have been based on: Net Book Value of all existing Ambulance sites A revaluation of each of the existing Ambulance Stations was undertaken by King Sturges Property Consultants in April 2008 to recognise the reduction in the development potential of the estate. The impairment of the assets within the Trust Accounts recognising the revaluation of the estate is to be undertaken outside of this OBC. No further valuations of the existing properties have been undertaken since this date, however, to reflect prevailing market conditions these valuations have been abated by 50%. No opportunity costs of land have been included for existing Police and Fire The costs in relation to the acquisition of the land have been estimated at 252k per acre. These valuations have been taken from the original Estates Strategic Outline Case whilst land is being sourced and valuations are being completed. The value of the land for the ARC at Wrexham has been valued at 504k for 2 acres (WAST only) and will be included in option 2 and 3, value of the land for the ARC at Wrexham (including Police and Fire) is 1,260k for 5 acres and will be included in options 4 to 6, whilst the acquisition of the land for the MRD at Flintshire has been valued at 378k for 1.5 acres and will be included in options 3, 5 & 6. The land would be acquired 6 months before development began. In this instance land would be acquired during 2009/10 for all options. The valuation of the land as indicated above also includes any purchasing fees associated with the acquisition (legal, governmental and agents). The sale of the existing Ambulance Stations have been included at their revaluation figure as provided by King Sturges. The selling costs (legal and agents fees) associated with the sale of the estate have been estimated by Welsh Health Estates at 2.5% of the property valuation. It has been assumed that these would be disposed of 6 months after each of the replacement premises were commissioned. Chirk Ambulance Station currently has a Medical Centre adjacent to the premises. An estimation of 50,000, provided by Welsh Assembly Group Health Estates has been included in the OBC to reaccommodate this Medical Centre in other premises. Residual values reflect the value of land for all options. There are no building residual values as it is assumed the assets will have fully depreciated over the 60 year appraisal period based on the Trust s standard building lives (60 years). The HM Treasury Green Book suggests a typical time appraisal period of 60 years plus construction (2 years included) to reflect the lifecycle of the buildings. Version 08 - For approval 33

46 Area Efficiency assumptions Comment There are capital and revenue benefits reflecting sharing of tri-partite facilities in options 4, 5 & 6. To make the costs comparable we need to recognise what the additional cost would be for each organisation participating in the shared facilities for those options where new facilities are required but where these are not being shared. These are options 2 and 3. Capital Costs The SCP have produced capital cost schedules for options 4, 5 & 6 for shared and non shared facilities scenarios. These schedules break the costs down into fire, police and ambulance services. This allows the additional cost burden placed on the fire and police services from a non-tripartite solution to be identified. The additional costs to be included in option 2 and 3 are identified below: Total Police Fire Shared scenario costs k 8,558 2,498 6,060 Non-shared scenario costs k 9,329 2,790 6,538 Total Saving k Capital cost adjusted to MIPS 517 k Revenue Cost This relates to the additional building related costs required. Similar to capital costs the Police and Fire would need an additional 369m2 for options 2 and 3 where individual facilities would be required but where no account has been taken within the current revenue costs. This cost would be at the current cost per m2 of This equates to an additional annual cost of 31.6k Version 08 - For approval 34

47 Capital Costs The Trust s Supply Chain Partner has developed the capital costs for the Do Minimum Option 1, basing this on the costs to bring up the estate to NHS condition B. The remaining short-listed options have all been prepared by the Trusts SCP. The capital costs reflect the functional content required by the Trust. As described in previous sections, options 4, 5 & 6 include shared accommodation with the Police & Fire A copy of the OB forms is provided at Appendix C An explanation of how these costs have been treated in the economic appraisal has been discussed in the economic appraisal methodology and assumptions sections above. Key assumptions made are highlighted in the table below. Figure 3-8: Key Capital Assumptions Calculated by the Trust s Supply Chain Partner, using NHS Estates Quarterly Briefing Volume 17 No.3, 3/2009. The Construction Costs are therefore assessed at MIPS FP 530 Equipping Costs have been made at Equipment Price Index 129 Q It is assumed for OBC purposes that no abatement is included for re-used equipment, at this stage. Appropriate on-costs have been applied. Fees have been applied at 30.96% and includes in-house Trust project support and Architects fees It has been assumed that no items of equipment will transfer; this position will be reviewed prior to transfer. Contingencies have been included at 10% VAT has been excluded The costs in relation to the acquisition of the land for each option have been based on 252k per acre. All ambulance stations in the North East (see note below) are under the ownership of the Trust and therefore sale proceeds are available to finance new capital spend. The Queensferry Ambulance Station is freehold but included in the asset register of the National Assembly for Wales (regarded as residual estate in 1990 s and transferred to NAW books as expected to be disposed of). Proceeds of the sale would go to NAW, however these have been included within this OBC on advice from Trust Finance representatives as these would be critical to the project proceeding. Version 08 - For approval 35

48 A summary of the capital costs is provided below. OB forms have been produced for each option at MIPS FP index 530. Copies of the OB analysis is provided at Appendix C. Figure 3-9: Capital Costs 000 Option 1 Option 2 Option 3 Option 4 Option 5 Option 6 Departmental costs - 2,296 3,816 4,349 6,601 5,630 On costs - 1,911 3,192 4,131 5,970 5,195 Sub total - 4,206 7,008 8,481 12,571 10,825 Provisional location adjustment Works cost - 3,996 6,658 8,057 11,942 10,284 Fees - 1,140 1,900 2,505 3,342 2,985 Non works costs Equipment costs Capital risk contingency ,345 1,613 2,354 2,036 Sub total - 6,204 10,315 12,367 18,044 15,612 VAT ,473 1,726 2,573 2,210 Sub total Costs from OB Forms Costs of non-sharing facilities (Police and Fire) Refurbishment of estate to NHS estate condition B Sub total capital costs (less land acquisition and sales) Land acquisition costs (less fees) - 7,090 11,787 14,092 20,617 17, , ,362 8,374 12,558 14,605 20,617 17, ,260 1,638 1,638 Disposal proceeds (net of fees) - (356) (665) (356) (665) (665) Total project costs 1,362 8,522 12,775 15,509 21,589 18,794 Source OB1 forms and Trust data Version 08 - For approval 36

49 Optimism bias Optimism bias has been calculated based on the Department of Health guidance and the results are shown below. Option 1 8.3% Option 2 8.6% Option 3 8.8% Option % Option % Option % The supporting analysis is provided for each option at Appendix D Optimism bias has been calculated for the purposes of the economic appraisal on the capital costs less land acquisition and sales. An analysis of the capital costs including optimism bias is provided in the table below. Figure 3-10: Capital Costs incorporating Optimism Bias Option 1 Option 2 Option 3 Option 4 Option 5 Option 6 Total costs per Figure ,362 8,522 12,775 15,509 21,589 18,794 Optimism bias ,124 1,753 2,526 2,199 Sub total 1,475 9,255 13,899 17,262 24,115 20,993 Revenue costs of the shortlisted options There are a number of key assumptions made in relation to the revenue costs of the short-listed options, whether recurrent or non-recurrent. These are identified below. Version 08 - For approval 37

50 Figure 3-11: Key Revenue Assumptions Area Comment General Costs are stated at 2008/09 price levels. Pay costs Baseline pay costs are included within each option for WAST staff only who will accommodate within the configuration of each option. These costs have been provided by the Trust s Finance Department. There has been no recognition of pay costs relating to the Police and Fire within any of the options Additional pay costs have been calculated for Ambulance Fleet Assistants (AFAs) based on servicing the number of ambulances within the fleet whilst covering the Make Ready Depot from 7am until Midnight 365 days a year with appropriate absence cover. This allows for 7 wte AFAs for Wrexham & Chirk and 9 wte AFA s for Flintshire at a cost of 25,076 per wte. Where AFAs have been included in each option, there is an assumption that there will be an efficiency cash releasing benefit of EMS staff given some of their duties will now be undertaken by AFAs. The assumption made is that each EMS staff undertakes training as overtime and claims additional pay at overtime rates. The time released has been evaluated at 60 hours per wte per year at an overtime rate of 21 per hour. This will release 2,323 hours per year in Wrexham & Chirk and 3,406 hours per year in Flintshire. It has been assumed that the current supervisors within the existing Ambulance stations will manage the ARC and MRD. Pay costs are inclusive of full on-costs. Pay costs utilise Agenda for Change (AfC) banding where appropriate. Version 08 - For approval 38

51 Area Non pay costs Comment Baseline non pay costs are all operational non pay costs excluding any building related running costs and have been included within each option for WAST only. These costs have been provided by the Trust s Finance Department. For options 2 to 6, where there will be a centralisation of stock it has been assumed that a one-off reduction in costs as a result of a reduction in stock levels will occur once the ARC and MRDs have been developed. For options 2 and 4 this saving will equate to 2,500, whilst in option 3, 5 and 6 this saving will equate to 5,000. For options 2 to 6 there will be a recurrent saving of 1,200 per year reflecting efficient use of gas supplies and storage costs. There has been no recognition of non pay costs relating to the Police and Fire within any of the options. It has been assumed that the re-location of the ARC and MRD will have a negligible effect on the overall mileage the Ambulances will be undertaking carrying out normal operations as WAST will identify stand points within the Flintshire/Wrexham area where Ambulances can park in order to respond to requests within these areas. For options 2 to 6 there will be an additional non recurrent cost of funding staff excess mileage from their home to the new ARC base. This has been estimated for a maximum of 4 years. For options 2 to 5 where staff will be travelling to a mixture of Wrexham ARC and outposts in Flintshire, the additional cost will be 16,762 per year. For option 6 where all staff will be travelling to Wrexham ARC, this will be 32,562 per year. For options 2 to 6 there are additional revenue costs of requiring additional stand points (i.e. lay bys) for Ambulances to allow quicker response times within the Wrexham and the Flintshire area as a result of the main station being centralised. This has been assessed at 5,000 per annum per stand point by Trust Estates/Finance representatives. For options 2 and 4 where new facilities are being provided in Wrexham only, 2 stand by point is required; whereas for options 3, 5 & 6, where new facilities are being provided in Wrexham and Flintshire, 6 stand by points are required. Version 08 - For approval 39

52 Area Building related running costs Comment The baseline building related running costs for WAST include rent, rates, leases, heat, light, water, maintenance and cleaning. The total current cost for the Ambulance Stations within the scope of the OBC is 151,334. With the current footprint of the stations totalling 3,172m2, the average cost per square metre for existing Ambulance Stations is The costs and information have been provided by the Trust s Finance Department. Options 4, 5 & 6 are tri partite solutions with WAST sharing facilities with the Police and Fire Service, relocating from Police Divisional Headquarters in Wrexham and the Fire Station in Wrexham. As such to ensure all options are comparable the baseline building related running costs for the Police HQ and Fire Station have been included within options 1, 2 & 3. The current cost of the existing premises has been provided by representatives within the Police, where they have divided the total cost for all of their existing estate of 3,701,521 by the total footprint of 43,165m2 to calculate an average cost of per square metre. This has then been applied to the existing footprint included within the scope of this OBC, with a total of 1,000m2 for Police and 2,831m2 for Fire. It is assumed that the cost per m2 for the Police and Fire Service eliminates any requirement for additional backlog maintenance. The building related running costs per m2 for the new premises has been calculated at Per m2 for the proportion of the building occupied by WAST utilising the estimate from the original Estates Strategic Outline Case. The building related running costs for the new premises has been calculated at Per m2 for the proportion of the building occupied by Police and Fire Services as per current rates. It has been assumed that this will remain as per the current cost per m2 as this is based on a different usage to the WAST The baseline and future revenue costs for each option are outlined below. Baseline costs include current fire and police building running costs. Costs exclude capital charges. Figure 3-12: Revenue Cost Impact of Shortlisted Options 000 Option 1 Option 2 Option 3 Option 4 Option 5 Option 6 Pay Costs 5,366 5,493 5,647 5,493 5,647 5,647 Non Pay Costs 1,353 1,362 1,382 1,362 1,382 1,382 Building Related Running Costs Total Revenue Costs ,242 7,432 7,625 7,359 7,542 7,486 Baseline Costs 7,242 7,242 7,242 7,242 7,242 7,242 Impact Version 08 - For approval 40

53 Transitional costs for the shortlisted options Allowance has been made for non-recurring transitional costs/savings as follows: Excess travel costs for staff who require to relocate their reporting base as a result of estate reconfiguration. Savings on reduced stock levels as a result of centralisation of stock NPC Findings The detailed Economic Appraisals for each option are attached at Appendix B, together with detailed descriptions for costs and benefits, and their sources and assumptions For the purpose of the appraisal there have been no quantified non-cash releasing benefits identified. The table below summarises the key results of the Economic Appraisals for each option: Figure 3-13: Economic Appraisal Undiscounted ( 000) Net Present Cost ( 000) Option 1 Do Minimum (comparator) Capital 77,922 31,853 Revenue 449, ,044 Total Costs 526, ,897 Less Cash Releasing Benefits - - Non- Cash Releasing Benefits - - Total 526, ,897 Option 2 - Reference Project ARC in Wrexham with no changes to Flintshire (less ambitious option) Capital 89,170 39,493 Revenue 552, ,126 Total Costs 641, ,619 Less Cash Releasing Benefits 3,035 1,262 Non- Cash Releasing Benefits - - Total 638, ,357 Version 08 - For approval 41

54 Undiscounted ( 000) Net Present Cost ( 000) Option 3 - Reference Project ARC in Wrexham and Ambulance MRD in Flintshire (SOC preferred option) Capital 96,014 44,272 Revenue 571, ,840 Total Costs 667, ,112 Less Cash Releasing Benefits 3,035 1,262 Non- Cash Releasing Benefits - - Total 664, ,850 Option 4 Tripartite ARC in Wrexham with no changes to Flintshire (more ambitious option) Capital 114,704 61,856 Revenue 573, ,247 Total Costs 688, ,103 Less Cash Releasing Benefits 3,035 1,262 Non- Cash Releasing Benefits - - Total 685, ,841 Option 5 Tripartite ARC in Wrexham and Ambulance MRD in Flintshire (more ambitious option) Capital 111,936 56,126 Revenue 582, ,748 Total Costs 693, ,874 Less Cash Releasing Benefits 3,035 1,262 Non- Cash Releasing Benefits - - Total 690, ,612 Version 08 - For approval 42

55 Option 6 Tripartite ARC/MRD in Wrexham rationalising all WAST estate into Wrexham (more ambitious option) Capital 106,932 52,696 Revenue 573, ,420 Total Costs 680, ,116 Less Cash Releasing Benefits 3,035 1,262 Non- Cash Releasing Benefits - - Total 677, , Option Ranking The results are summarized and shown below. Figure 3-14 Summary of Results ( 000) Option Description Undiscounted Net Present Cost Equivalent Annual Cost Ranking 1 Do minimum (comparator for VfM purposes) 2 ARC in Wrexham with no changes to Flintshire 3 ARC in Wrexham and MRD in Flintshire 4 Tripartite ARC in Wrexham with no changes to Flintshire 5 Tripartite ARC in Wrexham and MRD in Flintshire 6 Tripartite ARD in Wrexham rationalising all WAST estate 526, ,897 8, , ,357 8, , ,850 9, , ,841 9, , ,612 9, , ,854 9,460 4 Version 08 - For approval 43

56 3.13 Cost per Benefit Point Analysis The Trust has conducted a cost per benefit analysis drawing together the benefits appraisal scores and the results of the economic appraisal. This analysis is presented below. Figure 3-15: Cost per Benefit Point Analysis Option 1 Option 2 Option 3 Option 4 Option 5 Option 6 NPC 223, , , , , ,854 Benefit points per Figure Cost per benefit point 1, Ranking The analysis shows that Option 5 delivers the lowest costs per benefit point of the shortlisted options Sensitivity Analysis The results of the economic appraisal illustrated above have been subject to a sensitivity analysis to examine the impact of movements in capital and revenue costs. Switching value analysis has been applied to areas of material cash flows, to identify the extent that costs must change in order for the ratio of NPC to benefit points to equal that of Option 5. The results are presented below. Figure 3-16: Switching Values Change in Cost Items to Equal Option 5 Change to equal cost: benefit ratio of Option 5 Cost Option 1 Option 2 Option 3 Option 4 Option 6 Total NPC ( 000) 223, , , , ,854 Benefit Points Cost per Benefit Point ( 000) NPC required to equal Option 5 cost per benefit point ( 000) Change in NPC to equal minimum cost per benefit point ( 000) 1, , , , , ,650 (164,329) (83,842) (26,749) (69,525) (33,203) Version 08 - For approval 44

57 Change to equal cost: benefit ratio of Option 5 Cost Option 1 Option 2 Option 3 Option 4 Option 6 Changes in key variables to give NPC reduction required: Opening Value -12,039% -6,142% -1,960% -5,093% -2,432% Transactions 84,479% -38,378% -8,699% -7,135% -3,122% Initial Capital Costs -11,529% -1,108% -239% -248% -186% Lifecycle Costs -562% -276% -85% -221% -102% Service costs -86% -43% -13% -36% -17% Total NPC -73% -35% -11% -27% -13% The analysis above indicates that significant change would be required for options to deliver the same ratio. These results are because the options have very similar NPCs and very different benefits scores. It should be noted that when calculating these switching values the costs of Option 5 were unchanged. This is a simplification as it is unlikely that the revenue costs for clinical services for one option would change dramatically while the comparable costs of another option remained the same Option Appraisal Conclusions The figure below compares the benefit scores and EACs of the short-listed options. The blue line represents the cost benefit-efficiency frontier. Options that fall below this frontier cannot be optimal, as it is possible to increase the benefits delivered by either reducing costs or holding costs constant. For example, Option 4 cannot be the optimal option as it delivers fewer benefits than Option 3, but at a higher cost. More benefits can be delivered and money saved, by switching from Option 4 to Option 3. The same applies to Option 6 as this delivers less benefits but for increased costs than option The options that are represented by the blue line of the cost-benefit efficiency frontier are options 1, 2, 3 and 5. Version 08 - For approval 45

58 Figure 3-17: Cost Benefit Efficiency Frontier The efficiency frontier shows that option 5 offers the greatest benefits and this option is also ranked highest in terms of cost per benefit point Option 5 delivers significant improvements in the services provided by implementing the make ready concept across the whole North East sector. Through the introduction of AFA s in both facilities this will allow EMS staff to reduce lost unit hours and thus provide the potential for improved performance. In addition vehicle mileage and lost unit hours associated with vehicle movements to Wrexham will be reduced with the provision of a more central fleet facility in Flintshire It will deliver significant improvements in the quality and standard of the estate through securing premises which are fit for purpose. By reducing the number and range of ambulance infrastructure this should improve the effectiveness of estate management In addition this option provides for co-location with Fire and Police which will deliver benefits in terms of shared space and scope for closer working relationships Risk Appraisal A qualitative risk assessment has been undertaken covering the range of risks identified in Figure The quantification of capital risks has been measured through the optimism bias assessment. Version 08 - For approval 46

59 3.17 Methodology The risk appraisal involved the following distinct elements: Agreeing the range of risks to be assessed the Risk Register Scoring the risks for each option The risk register items were assessed via a dedicated workshop attended by members of the Project Team. Following an overview of the process and a review of the Risk Register, the group scored the project risks Initially the potential impact of each area was assessed and this was assumed to be constant across the range of short-listed options. Differential risk exposure was assessed through assigning probabilities to events. The probability of each of the above risks occurring and the impact should it occur were assessed using the following scale:- 1 - Low 2 - Low/Medium 3 - Medium 4 - Medium/High 5 - High The product (by multiplying together) of the assessment of the potential impact and the probability of occurrence gives rise to an overall analysis of the risk e.g. low to high as detailed below. Figure 3-18: Analysis of Risk Levels Figure Probability Impact Low (1) Low/Med Medium Med / High High (5) (2) (3) (4) Low (1) Low / Med (2) Medium (3) Med / High (4) High (5) Key: Low Risk (1-3) Moderate Risk (4-9) Significant Risk (10-14) High Risk (15-25) This provides a useful indicator in determining the areas requiring the greatest degree of risk management effort Risk Scores The Workshop assigned the following risk scores on the basis of their assessment of previous procurements and judgment. A more detailed assessment of the individual risks is shown in the risk register at Appendix E. Version 08 - For approval 47

60 Figure 3-19: Summary of the Risk Appraisal Results Summary Risk Category Option 1 Option 2 Option 3 Option 4 Option 5 Option 6 Design, construction and planning risks Service risks Stakeholder risks Total Risks Ranking The key considerations that influenced the scores achieved by the various options were as follows: Option 1 Do Minimum (comparator) This option ranks third highest in terms of its qualitative risk In design, construction and planning terms it presents significant risks in relation to supporting a design that can deliver the services to the required standards and the extent to which current premises are suitable for refurbishment and upgrading In service terms the areas of significant risk relate to the potential failure to realise productivity gains and that backlog maintenance is not adequately addressed resulting in continued operational difficulties in providing services from the current sites. Option 2 - Reference Project ARC in Wrexham with no changes to Flintshire (less ambitious option) This option ranks third lowest in terms of its qualitative risk In design, construction and planning terms it presents intermediate risks arising from the extent of retained estate in Flintshire In service terms this option has a similar risk profile to the do minimum, albeit at a lower level. There is an additional risk that failure to secure suitable deployment points could have a significant impact on required performance. Option 3 - Reference Project ARC in Wrexham and Ambulance MRD in Flintshire (SOC preferred option) This option ranks lowest in terms of its qualitative risk There are no significant design, construction and planning risks In service terms there is a perceived risk that all of the required productivity gains are not realised allied to risks around securing an adequate number and range of deployment points. Version 08 - For approval 48

61 Option 4 Tripartite ARC in Wrexham with no changes to Flintshire (more ambitious option) This option ranks second highest in terms of its qualitative risk In design, construction and planning terms it has a similar risk profile to option 2, however, it has a higher level of build risk reflecting the tri-partite requirements and the potential impact agreeing requirements with all parties will have on timescales In service terms significant risk areas include realising productivity gains, deployment point requirements and maintenance risks relating to retained sites A significant stakeholder risk has also been identified reflecting the challenges in securing the benefits arising from co-location. Option 5 Tripartite ARC in Wrexham and Ambulance MRD in Flintshire (more ambitious option) This option ranks second lowest in terms of its qualitative risk In design, construction and planning terms, as is the case for all of the tri-partite solutions, there is a risk relating to agreeing construction specifications and timescales The service risk profile is similar to option 4, however, the maintenance risk is reduced reflecting the minimal level of retained estate There is an additional stakeholder risk relating to the impact on local populations arising from the level of existing estate rationalisation. Option 6 Tripartite ARC/MRD in Wrexham rationalising all WAST estate into Wrexham (more ambitious option) This option ranks highest in terms of its qualitative risk In design, construction and planning terms, as is the case for all of the tri-partite solutions, there is a risk relating to agreeing construction specifications and timescales This option has the highest level of productivity risk reflecting the challenges in staff reporting to a single base and the loss of productive time as well as the potential for increased travel for vehicles from their base to individual incidents and SDP s This option also demonstrated the highest stakeholder risks reflecting the combination of co-location with other emergency services and the scale of estate rationalisation into a single facility for the entire sector. Version 08 - For approval 49

62 3.19 The Preferred Option The results of investment appraisal are as follows: Figure 3-20: Summary of Overall Results Evaluation Results Option 1 Option 2 Option 3 Option 4 Option 5 Option 6 Benefits Appraisals (benefit points) Economic Appraisal (NPC) Risk Appraisal (risk score) , , , , , , Overall Ranking Conclusion The preferred option is Option 5 - Tripartite ARC in Wrexham and Ambulance MRD in Flintshire, because this offers the best combination of benefits, costs and risks. Version 08 - For approval 50

63 4 The Commercial Case 4.1 Introduction This section of the Outline Business Case (OBC) outlines the proposed deal in respect of the preferred option outlined in the Economic Case The commercial case is for the provision of a tripartite facility in Wrexham and a standalone ambulance Make Ready Depot in Flintshire The construction of these premises will be managed through the NHS Design for Life: Building for Wales framework. 4.2 Required Services The facilities required for the three partner organisations are: Ambulance Resource Centre (ARC) in Wrexham; Fire station in Wrexham (co-located with the ARC); Police Facility in Wrexham (co-located with the ARC); Ambulance Make Ready Depot (MRD) in Flintshire; 4.3 Proposed Contractual Arrangements As the project is funded by the Welsh Assembly Government it is envisaged that the Welsh Ambulance Service NHS Trust (WAST) will be the lead body The Fire and Police Services will indemnify WAST for the agreed Guaranteed Maximum Price (GMP) of the development and any other works which they authorise during the construction of their element of the facilities which affects the GMP The partners will agree and share the GMP and any authorised changes during construction of the shared areas based upon an agreed percentage of shared area for each partner The contract will be under NEC 3 and signed by the Welsh Ambulance Service NHS Trust on behalf of the three parties and the chosen supply chain partner under the Design for Life: Building for Wales framework. 4.4 Proposed Mechanisms for Funding Construction Costs As the development of the tripartite facility is funded by the Welsh Assembly Government (WAG) it is expected that the funds will flow from WAG to each organisation It is envisaged that the funds required to pay for each partner s element of the project will be held in a project account held by the Welsh Ambulance Service NHS Trust who be responsible for the overall control of the expenditure and payment to the supply chain partner A protocol for the certification of works and payment of invoices will be agreed by the three partner organisations before the contract is signed. Version 08 - For approval 51

64 4.5 Transfer of Assets on Completion of the Building Phase It is envisaged that the legal ownership of each element of the tripartite development will be transferred on practical completion to the appropriate partner organisation It is envisaged that the shared areas will be owned by the Welsh Ambulance Service Trust and be transferred to WAST ownership on practical completion It is envisaged the ownership of the site will be in the name of the Welsh Ambulance Service NHS Trust It is envisaged that the use of the shared site and premises areas within the tripartite facility will be secured by all three partners under a contract or licence agreement drawn up by WAG and signed by each party. 4.6 Proposed Revenue Charging Mechanisms As it is envisaged that the utilisation of some assets will be shared by the partner organisations there needs to be a mechanism to fairly share costs that should be borne collectively by the three partner organisations The proposal for shared facilities is that: Site costs would be reimbursed to WAST based upon floor and surface area of the external areas used; The costs of energy and utilities will be measured by each organisation and reimbursed to the Ambulance Trust; The costs associated with the running and maintenance of the shared areas of the premises will be reimbursed by the other two parties to the WAST based upon agree percentage of use; Maintenance costs of the shared site areas and boundaries etc will be agreed based upon the floor area of the premises and use of the external area used, and The cost of shared staff for security etc will be apportioned based upon occupied floor area Each partner will be responsible for the cost and maintenance of their own assets. 4.7 Disposal of Assets The Trust envisages that in delivering the preferred option the following ambulance station premises and sites will be surplus to operational requirements and therefore available for disposal. Wrexham Ambulance Station and vehicle workshop; Chirk Ambulance Station; Flint Ambulance Station; Mold Ambulance Station; Holywell Ambulance Station; Queensferry Ambulance Station. Version 08 - For approval 52

65 4.7.2 The Trust has developed a robust disposal strategy for each of the above sites taking into account the construction programme of the new facilities and the possible vacation dates The key considerations which the Trust has used to develop the disposal strategies are as follows: location; possible planning approvals for reuse; impact on site value or opportunities to secure planning relating to the affordable housing protocol; timing of disposal; impacts of retaining the premises for longer than desired; The strategies have identified that it should be possible to dispose of the sites for either housing or commercial premises purposes Where there is a potential to use sites for housing they will be assessed against WAG s affordable housing protocol and the local planning context to maximise the planning gain whilst securing affordable housing for the local areas The site disposal values within the business case are based upon current market value discounted to take account of prevailing market conditions The Trust has yet to engage with the local planning authorities and the public. The engagement process will start once the OBC has been approved. 4.8 Potential for Risk Transfer This section provides an assessment of how the associated risks might be apportioned between the Trust and the Supply Chain Partner The general principle is that risks should be passed to the party best able to manage them, subject to value for money (VFM) The table outlines the allocation of responsibility for key risk areas. Version 08 - For approval 53

66 Figure 4-1: Risk Transfer Matrix Risk Category Potential allocation Public Private Shared 1. Design Risk 2. Construction & Development Risk 3. Transition & Implementation Risk 4. Availability and Performance Risk 5. Operating risk 6. Variability of Revenue Risks 7. Termination Risks 8. Technology & Obsolescence Risks 9. Control Risks 10. Residual Value Risks 11. Financing Risks 12. Legislative Risks 13. Other Project Risks 4.9 Proposed Contract Duration The Design for Life: Building for Wales framework, is based up the NEC 3 contract which provides a robust design and construction contract for the delivery of projects. The contract period will cover the construction period and a one year defects liability period post construction It is envisaged that there will be a licence and or contractual agreement (terms and length to be agreed) between the partner organisations covering the management of the site It is envisaged that there will be a contractual agreement between the partner organisation to cover the operational use and reimbursements for the cost of the shared elements of internal spaces and any other shared site costs, based on the principles set out in Section 4.6 above. Version 08 - For approval 54

67 4.10 Proposed Contractual Arrangements The contractual framework will be defined by the following: The Design for Life: Building for Wales framework, appointment of the supply chain partner under the NEC; The development of the GMP and NEC 3 contract; Legal ownership of the sites in Wrexham and Flintshire; 4.11 Personnel Implications (including TUPE) It is anticipated that TUPE (Transfer of Undertaking and Protection of Employee) will not apply to this investment Procurement Strategy and Implementation Timescales The procurement strategy will follow the Design for Life: Building for Wales framework It is anticipated that the implementation milestones are as follows: Approval of the OBC May 2009 Development of the designs and GMP / FBC April 2010 WAG FBC approval June 2010 Enabling works start on site November 2009 Start of MRD / ARC / Tripartite construction onsite April 2010 Completion of Wrexham tripartite facilities March 2011 Completion of Flintshire MRD October 2010 Operational date for Wrexham tripartite April 2011 Operational date for Flintshire MRD November FRS5 Accountancy Treatment It is envisaged that the assets developed through this OBC will be on balance sheet and reflect the pattern of ownership set out in Section 4.5. Version 08 - For approval 55

68 5 The Financial Case 5.1 Introduction 5.2 Introduction The purpose of this section is to set out the indicative financial implication of the Preferred Option (as set out in the Economic Case section) and the Proposed Deal (as described in the Commercial Case) The Trust assumes that the scheme will be publicly funded by the Welsh Assembly Government. 5.3 Capital Funding Requirement As the preferred option is a joint project involving ambulance, fire and police services the capital requirements represent the total sum required to deliver the co-located facility. However this OBC presents the Welsh Ambulance Service Trust requirements and as such it is necessary to show the net capital contribution to cover this element of the total requirement The WAST requirement takes into account the estimated proceeds arising from the disposal of surplus estate. This is based on 2008 revaluation of the ambulance stations in the North East sector. The expected proceeds have been reduced by 50% to reflect the fall in asset values due to the current global financial crisis. These proceeds are sensitive to prevailing market conditions and can therefore only be treated as an estimate of likely proceeds The following table sets out the capital requirement in total, the phasing of costs across financial years and the contributions to be made by the partner organisations which has been calculated by the SCP. This includes VAT but excludes the impact of optimism bias and land acquisition costs. Clarification is required on the extent to which VAT may be recoverable on certain elements of the construction. Figure 5-1: Capital Funding Requirement excl Optimism Bias ( 000) 2009/ /11 Total Total capital requirement per OB Forms 1,434 19,183 20,617 Contribution from North Wales Fire Service 471 6,302 6,773 Contribution from North Wales Police 194 2,598 2,792 Contribution required by WAST ,283 11,052 Total Contribution 1,434 19,183 20, The figure below outlines the total capital requirements for WAST by year to support their component of the scheme, totalling m. This analysis factors in land acquisitions and disposals. At this stage it is assumed that all land would be acquired by WAST. However the possibility of contributions by the Police and Fire Services towards land costs will be explored at FBC stage. Version 08 - For approval 56

69 Figure 5-2: Capital requirements for WAST ( 000) 2009/ / /12 Total Capital Spend - Ambulance Service , ,052 Land acquisition costs 1, ,638 Land disposal costs Asset Sale Receipts 0 0 (683) (683) Total Capital Requirement 2,407 10,283 (665) 12, Impact on the NHS Organisation Income & Expenditure Account The intended lifespan of the project is 60 years plus construction. However the initial incremental revenue costs associated with the preferred option is presented over the first 3 years of the project. This is shown in the table below. Depreciation has been based on an asset life of 60 years, as suggested by the Trust s estate department. Figure 5-3 Summary of WAST Financial Appraisal ( 000) Impairments - land 843 Impairments - buildings 1,149 Existing Depreciation / / / / / / /16 New Depreciation Rate of return existing assets Rate of return new assets Total Capital Charges costs 202 2, Clinical costs baseline 5,366 5,366 5,366 5,366 5,366 5,366 5,366 Non-clinical costs baseline 1,353 1,353 1,353 1,353 1,353 1,353 1,353 Building running costs baseline Ambulance Fleet Assistants Excess staff travel Stand by points Additional Building running costs Productivity savings due to AFA's (10) (120) (120) (120) (120) (120) Centralisation of stock (5) Gas Storage 0 (1) (1) (1) (1) (1) Total Operating Costs 6,871 6,898 7,257 7,262 7,262 7,260 7,245 Total Revenue costs 7,073 9,226 7,908 7,881 7,874 7,866 7,844 Version 08 - For approval 57

70 5.5 Impact on the Balance Sheet The proposed balance sheet impact of the project over the first five years is shown below. Figure 5-4: Projected balance sheet impact of scheme 2009/10 to 2013/14 ( 000) 2009/ / / / /14 Existing Land 1,460 1,460 0 Existing Buildings 1,214 0 New Land 1,638 1,638 1,638 1,638 1,638 New Buildings 10,868 10,683 10,499 Assets under construction ,052 Total relevant assets 5,081 14,150 12,506 12,321 12, Impairments The total value of impairments is expected to be 1,992k. These have been assumed to fall in 2010/11, based on the expected contract start date (impairments have been assumed to occur only when there is certainty that the scheme will progress) It is assumed that the Trust will receive additional resource to recover the impact of these impairments in the same way as previous impairments have been funded. 5.7 Overall Affordability The revenue impact of the scheme from 2009/10 to 2011/12 is 835k. The key components are as follows: 449k increase in capital charges. It is anticipated that funding from WAG will be provided for these costs. 401k in ambulance fleet assistants. 17k in excess staff travel. This is expected to last for only 4 years 30k to fund standby points. 65k in additional building running costs. 120k saving in paramedic costs. 5k one off saving in stock levels Therefore the Trust will require 449k strategic capital charge support and 387k in additional revenue support from its commissioners. Version 08 - For approval 58

71 5.8 Commissioner and Partner Support Commissioner support Health Commission Wales (HCW), the current commissioner of services provided by the Welsh Ambulance Service NHS Trust, has provided a statement of support in relation to the revenue impact and to progress to FBC. A copy of this statement is attached at Appendix F. Partner support North Wales Fire and Rescue Service have provided a letter of support in relation to the OBC. A copy of their letter is provided at Appendix F North Wales Police have provided a statement position regarding the OBC. A copy of their letter is attached at Appendix F. Version 08 - For approval 59

72 6 The Management Case 6.1 Introduction This section of the Outline Business Case (OBC) addresses the achievability of the scheme. The management case builds on the SOC by setting out in more detail the actions that will be required to ensure the successful delivery of the project in accordance with best practice A key change since the SOC is that part of the project is to be developed on a Tripartite basis. Whilst this brings a number of benefits, it also means that the project and programme management have to be developed to address the requirements of all three organisations All three emergency service partners have a number of different key reporting requirements to meet their own governance criteria but have agreed it is necessary to develop a unified approach to delivering and managing the scheme It has therefore been agreed that the project and programme management will be based upon a partnership approach 6.2 Project and Programme Management Arrangements To ensure successful project delivery a robust tripartite project and programme management structure has been established The structure has been developed to facilitate direct reporting whilst ensuring it is sufficiently robust to incorporate the detailed inputs required for each element of the project The structure recognises the requirement of each of the partners to have responsibility for the delivery of its own elements, while ensuring there are flows of information to an overall group responsible for the inputs required to develop the shared tripartite element The structure has been designed to ensure there is one overall Project Director and Project Manager each with the required authority and responsibility to manage the project on behalf of the three organisations. An overarching structure above this will ensure that each of the partner s individual requirements are accommodated This approach will provide a single agreed control mechanism for project delivery, whilst ensuring each organisation meets its own governance requirements One of the key elements of successful delivery will be the contractual framework. This will ensure the project and programme structures are robust from the outset and that the parties have agreed the contractual approach to be adopted The contractual approach will be the NHS Design for Life: Building for Wales framework, the details of the approach are set out in the Commercial Case The programme will be managed between the three partner organisations and the supply chain partner (SCP). 6.3 Project Management Arrangements For the tripartite partners to successfully deliver this project, it is vital that the following overall approach is taken for the organisational management of the project: Version 08 - For approval 60

73 The partners will provide individual project coordinators to represent their organisational requirements. This individual will be responsible for managing their organisation s outputs and for reporting back. The partners will use the general framework and methodology of Prince 2 in managing the activities and outputs of the project; The partners will use NHS standard documentation issued under the Design for Life: Building for Wales framework, processes and where necessary develop bespoke reporting formats to meet the governance requirements of the partner organisations. All participants will seek to benefit from experience and best practice from other partner projects; Specialist professional and technical advisers will be employed for those activities where the necessary skills and experience are not otherwise available to the project. The transfer of skills and knowledge from specialist advisers to the project team members will be achieved wherever possible and appropriate; and In managing the project the partnership aims to: Deliver the project on time and to budget; Ensure effective and proactive lines of accountability and responsibility for the project deliverables; and Establish user involvement at all stages of the project. Version 08 - For approval 61

74 6.4 Project Reporting Structure The partners have developed a robust reporting structure which will ensure the all parties are fully engaged and have delegated the required responsibilities The reporting organisation and the reporting structure which is proposed for the delivery of the project from OBC onwards are shown in the diagram below. Figure 6-1: Decision Making Structure 6.5 Project Roles and Responsibilities The paragraphs below set out the responsibilities of each role within the project structure. The Investment Decision Maker (IDM) / Senior Responsible Officer (SRO) function To ensure overall control of the project there should be a single Investment decision maker. However as this is project involves the three emergency services and a supply chain partner, each individual organisation needs to ensure that there is accountability and control of their elements of the project and participation in the scheme To overcome this issue the parties have agreed that: As the Ambulance service has the greatest element in cost terms, they will be nominated the Overall Investment Decision Maker / Overall Senior Responsible Officer (OIDM/OSRO) and will take overall responsibility for the project. Version 08 - For approval 62

75 Alongside the OIDM / OSRO role, the Fire and Police services will also have there own Investment Decision Maker / Senior Responsible Officers (IDM / SRO) who will be responsible for their individual organisation s contribution to the scheme The three investment decision makers will be members of the Tripartite Project Board and will use this forum to manage the process The Overall Investment Decision Maker / Overall Senior Responsible Officer is Alan Murray - Chief Executive, Welsh Ambulance Service NHS Trust The OIDM / OSRO will: Work closely with the partner Investment Decision Makers to ensure the project is delivered; Ensure that a viable and affordable business case exists for the project, with the revenue impact clearly identified; Ensure the business case remains valid; Maintain visible and sustainable commitment to the project; Authorise the allocation of funds to the project; Resolve any issues between the parties which impact upon the overall project; Oversee project performance through cost and schedule performance, and Resolve any issues which fall outside the project owner s delegated authority The Fire Service s Investment Decision makers and Senior Responsible Officer is Colin Hanks - Assistant Chief Fire Officer, North Wales Fire and Rescue Service The Police Service s Investment Decision Maker and Senior Responsible Officer is Mike Parkin - Director of Finance and Resources, North Wales Police The above Fire and Police Services IDM / SROs will: Work closely with the Overall Investment Decision Maker to ensure the overall project is delivered; Ensure their element of the business case is viable and affordable with the revenue impact clearly identified; Ensure the business case remains valid; Maintain visible and sustainable commitment to the project; Authorise the allocation of funds to the project; Resolve any issues of their elements which impact upon the overall project, and Oversee project performance through cost and schedule performance. Version 08 - For approval 63

76 Tripartite Project Board The Project Board will be responsible for: High level stakeholder involvement; Providing strategic direction for the project; Ensuring continuing commitment to stakeholder support; Programme monitoring; Ensuring the preferred option is satisfactory to funders; Agreeing the GMP; Sign-in off the FBC; Managing the overall budget; Ensuring the public consultation is managed successfully, and Meeting at key stages throughout the project, the dates of which are to be agreed. Tripartite Project Group The Tripartite Project Group will be responsible for: Develop the filing and control structure for information flows; Day to day project involvement; Development of the operational polices; Development of the output specifications; Development of the GMP with supply chain partner; Responsible for overall budget development; Involved in project meetings; Stakeholder involvement including public consultation; Development of the Full Business Case; Responsible for meeting the needs of the Project Board, and Managing and coordinating the inputs of the working groups. Version 08 - For approval 64

77 Project Director The Project Director is David Jackland - Director of ICT and Estates, Welsh Ambulance Service NHS Trust The Project Director will: Take the lead responsibility for the overall success of the project, and the services that support the change; Define the project owners terms of reference; Agree and direct the activity of the project; Take the lead responsibility for risk relating to the programme and for the realisation of associated benefits balancing the acceptable level of risk against objectives and business opportunities; Agree and direct the activity of the programme; Instruct and manage external consultants; Manage the overall project programme; Manage the overall risks of the project; Develop the contractual agreements between the parties for the shared areas within the tripartite facilities; Responsible for ensuring that public engagement and consultation is undertaken and managed; Ensure the brief set by Project Board is adhered to, and Provide the key contact in respect of high level decisions required in order to progress work. Project Manager The Project Manager will: Report to the Project Director on all aspects of the project and SCP/ DfL :BfW framework. Responsibility for the day to day management of the project group, coordinators and processes; Be the principle point of contact between the partners and the supply chain partner; Will be responsible for the managing the overall delivery of the project with the supply chain partner; Will be responsible for managing the overall programme; Will be responsible for the development of the design and signing off by the partners; Version 08 - For approval 65

78 Responsible for the negotiation of the GMP on behalf of the partners with the supply chain partner. Responsible for the management of the NEC 3 contact from commission to completion; Responsible for the management of risks and reporting to project director; Responsible for the development and management of the overall implementation plans; Responsible for the development of the Full Business Case; Responsible for the management of the control documentation i.e. Highlight reports etc; Report to the Project director and partners as required to ensure they are kept informed on the project; Write and manage the flow of formal reports from the project and working groups to the Project Board, and Support the project coordinators to develop the post project evaluation processes. Project Coordinators The project coordinators will: There will be three Project Coordinators one for each partner organisation they will be: Welsh Ambulance Service NHS Trust: Alison Maguire North Wales Fire and Rescue Service: Richard Samuel Perry North Wales Police Service: Richard Samuel Perry The Project Coordinators will: Manage their working groups; Manage the information flows between the partner working groups into the tripartite group; Ensure that the overall and especially their element of the project team (which will include technical and capital planning, construction and service planning leads) is effectively directed and managed; Ensure effective liaison with their IDM and SRO; Ensure appropriate development of technical design specification, technical site analysis, capital costings and supporting documentation; Ensure production of detailed design, construction plans for scheme; Develop the Technical Quality Control Plan and responsible for ensuring compliance with appropriate environmental and health building standards; Version 08 - For approval 66

79 Undertake risk analysis and technical management of scheme; Input into the GMP of their element of the project with the supply chain partner; Ensure effective monitoring of all project activities, especially their element in is undertaken regarding time, quality and cost; Provide Highlight reports and Exception reports to the Project Board on all aspects of their own element of the project performance; Develop and mange the project programme in partnership with the supply chain partner; Develop Post Project Evaluation plan for their element of the project; Develop tripartite Project Management arrangements for implementation of the Wrexham project, and Development of the management arrangements for the implementation of the Flintshire MRD. Tripartite Operation and Design Policy Group The Welsh Ambulance Service NHS Trust s Project Coordinator, Alison Maguire, will lead the Tripartite Operational and Design Group with support from stakeholders from each of the partner organisations (with technical advice and facilitation from the SCP) The Tripartite Operational and Design Group will be responsible for working in collaboration with agreed service stakeholder representatives to: Describe current and future service needs demonstrating analysis of demand and capacity requirements and develop a service model to meet service objectives; Define and agree how the tripartite facilities will function; Develop the operational polices for each element and the shared areas; Define and agree the design principles of the tripartite and standalone facilities; Define resource requirements to support service models in the following areas: Workforce Technical Ensure the operational policies are developed to allow for the production of designs; Ensure production of detailed design, procurement & construction plans for scheme; Work with the supply chain partner to secure GMP; Support the production of the Full Business Case; Version 08 - For approval 67

80 Formulate the management policies for each of their respective services ensuring there are common understandings for the use of shared areas and site management, and Develop benefit realisation plans and measurable outputs. Working Groups There will be three working groups one for each partner organisation the role of the groups is to develop the brief as set out above but for their own element of the project The partner s project coordinators will be responsible for managing the outputs of their working groups The working groups will be supported by the supply chain partner In addition to these roles a number of key internal and external support functions will be provided as indicated below. Project Accountant There will be a lead project accountant which will be Tony Ashforth - Project Accountant, Welsh Ambulance Service NHS Trust The Project Accountant will be responsible for managing the inputs of each partner s financial requirements and reporting to the project group Each of the partner organisations will provide a designated finance lead to provide a range of financial and other related information to support the project. Each organisation will be responsible for overseeing and reporting their portion of spend against the budget during the delivery of the project The Project Accountant will: Provide the base data required for the economic analysis and appraisal of the FBC; Define the financial affordability ceiling for the development. Each partner organisation s finance departments will develop Financial Statements (for example, I & E, cash flow and balance sheet) for the development; Develop a financial plan demonstrating capital and revenue effects and affordability of the solution; Provide financial information for the FBC; Manage their organisations capital and revenue spend against budget, and Report to their respective organisations on the above. Design Groups Three Design Groups, one for each service, will be established to oversee the detailed design process relating to their individual requirements. These groups will work in conjunction with the SCP. Overall coordination of this work will be undertaken by the Tripartite Operation and Design Policy Group The responsibilities of the Design Groups are to: Version 08 - For approval 68

81 Develop the operational polices; Develop the functional content; Develop the design, and Develop the management policies; Supply Chain Partner The supply chain partner will be responsible for Project Management support to develop and drafting the 5 case FBC, in liaison with the Project Director, Project Manager, Project Coordinators, technical, capital planning and finance representatives The Supply Chain Partner s responsibilities include the following: Formulation of a detailed Five Case FBC providing information and support to the procurement partners team; Development of the final detailed drawings; Securing full planning approvals; The development of GMP; Development of the NEC 3 contract; Development of risk matrix and cost control measures; Project management processes and procedures of the physical delivery of the scheme, and Development of the OM manuals and project closed down. Project Membership The project structure in place for the Outline Business Case (OBC) is shown in Figure 6-1. The proposed composition of the Project Board and Tripartite Project Group is set out below Membership of the remaining groups will be finalised following OBC approval The membership of the Project Board is set out in the table below. Figure 6-2: Project Board Membership Name Position Organisation Alan Murray Chief Executive OIDM / OSRO overall project Welsh Ambulance Service Trust Mike Parkin Chief Fire Officer IDM/SRO fire North Wales Fire Service Colin Hanks Police Commander IDM/SRO police North Wales Police Version 08 - For approval 69

82 Name Position Organisation David Jackland Director of Estates and ICT Welsh Ambulance Service Trust TBC NEC Project Manager Welsh Ambulance Service Trust Dafydd Jones- Morris Regional Director North Wales Welsh Ambulance Service Trust Tim Woodhead Director of Finance Welsh Ambulance Service Trust Derek Johns National Estate Manager Welsh Ambulance Service Trust TBC Construction Director Supply Chain Partner Debbie Bateman Programme Manager Welsh Ambulance Service Trust Jo Davies Director of HR Welsh Ambulance Service Trust The membership of the Tripartite Project Group is set out in the table below. Figure 6-3: Tripartite Project Group Membership Name Position Organisation TBC NEC Project Manager Welsh Ambulance Service Trust Alison Maguire Richard Samuel Perry Richard Samuel Perry Project Coordinator Ambulance Service Projects Coordinator Fire Service Project Coordinator Police Service Welsh Ambulance Service Trust North Wales Fire Service North Wales Police Tony Ashforth Project Account Welsh Ambulance Service Trust Daffyd Jones- Morris Regional Director North Wales Welsh Ambulance Service Trust Derek Johns National Estates Manager Welsh Ambulance Service Trust Version 08 - For approval 70

83 Name Position Organisation Debbie Bateman Programme Manager Welsh Ambulance Service Trust Jackie Palmer Category Manager North Wales Business Support Partnership TBC Implementation manager Supply Chain Partner TBC Commercial Manager Supply Chain Partner 6.6 Project Communication & Reporting Arrangements Project records will be maintained at the central project office, on a shared I.T. drive in accordance with the Design for Life: Building for Wales framework, records management system Project records will be maintained based upon good management practice. The filing structure will be determined by the Tripartite Project Group following OBC approval Minutes will be taken at all meetings. In order to ensure the task-focus of the project, prior to the closure of each meeting, an agreed action list will be circulated and agreed by all team members The main method of communication of records will be via . All s will be copied to the Project Director / Manager for record purposes A Project Directory of contact data will be circulated following project initiation The internal reporting arrangements and responsibilities including links with the Supply Chain Partner are as follows: All members of the project board / groups will have individual responsibilities for cascading project information through their respective service functions; The Project Manager and coordinators will be responsible for producing a monthly progress report to their own organisations and to the Tripartite Project Group / Project Board on progress, opportunities, any potential problems and project risks; Project Managers will be responsible for producing weekly Highlight Reports and issuing to the Project Director; The Project Director / Manger will be responsible for producing formal Board Reports, and The Project Director / Manager will be responsible for producing ad hoc reports to the Project Board The external reporting arrangements and responsibilities are as follows: The Project Director will be responsible for providing the key link with major stakeholders not represented on the Project Board to report progress; Version 08 - For approval 71

84 The Project Director will be responsible for the inclusion of the public in the proposed developments; Any required media management will be in accordance with the Trust s media policy, and The Project Board may wish to consider the production of a regular newsletter for internal and external communication purposes. Responsibility for production and frequency (if required) to be identified. 6.7 Project Plan The dates detailed in the table below highlight the key milestones of the Project. Figure 6-4: Project Milestones Action Responsibility Date Completion of OBC Trust April 2009 Submit OBC to Project Board Project Director April 2009 Submit OBC to WAG OBC approval Capital Investment Board Capital Investment Board April 2009 May 2009 Develop the FBC Trust / SCP April 2010 Trust Board, partner organisations boards FBC approval FBC submission to WAG Trust Board /partner organisations Welsh Ambulance Service NHS Trust May 2010 May 2010 FBC approval by WAG WAG CIB June 2010 Enabling works SPC November 2009 Start Construction Tripartite Facility and MRD SCP April 2010 Completion MRD Flintshire SCP October 2010 Completion of Tripartite Facility, Wrexham Operational commissioning MRD SCP March 2011 Trust November 2010 Operational commissioning Tripartite facilities Trust / partner organisations April 2011 Version 08 - For approval 72

85 6.8 Use of Special Advisors The project is to be developed under the NHS Design for Life: Building for Wales framework. One of the advantages of this approach is the access to specialist Advisers which can be used in a timely and cost-effective manner to achieve GMP and contract closure Supply chain partners have been appointed through the Designed for Life: Building for Wales framework, at Outline Business Case stage. Figure 6-5: Special Advisors within the Framework Partnership Specialist Area Business Case Development Technical design and cost Procurement and legal Adviser SCP TBC SCP TBC Welsh Health Estates 6.9 Outline Arrangements for Workforce Planning General arrangements A workforce planning working group will be established led by the Regional Director, consisting of emergency vehicle, patient transport, hospital courier service teams and the Trust HR team As part of this group s work, it is planned to develop a new role for Ambulance Fleet Assistants (AFAs) the role of these staff will be to undertake vehicle washing, stocking and minor maintenance The appointment of these staff will release paramedics and technicians to focus on patient care rather than at present having this valuable resource preparing the ambulance fleet WAST has developed operational polices for these staff and is currently developing detailed job description, roles and responsibilities The Workforce Planning Group will look at the staffing structure of the new AFA s as well as developing the rotas, assessing training needs and the establishing the training packages. More detailed information regarding these requirements will be included in the Full Business Case. Managing staff relocation The Trust understands the need to review the impact of relocating the reporting base for staff working within Wrexham and Flintshire and will assess this in line with the Trust s terms and conditions The Trust has mapped the impact of the preferred option on the staff by reviewing current bases against the revised arrangements, this has been done for the Wrexham and Flintshire based staff. Version 08 - For approval 73

86 6.9.8 The impacts are surprisingly small on both travel distance and time with the average increase in travel distance being 11.3 miles which equates to around 15 minutes travel time per day for most staff The Trust will interview all staff who will be affected by relocation to fully understand the impact Public Consultation The Trust is aware that the closure of some of its existing ambulance stations could be sensitive to some local communities and, in response, have developed a robust public consultation process which will be implemented when the OBC has been approved The Trust will establish a project specific communications group that will have responsibility for developing a range of information which will clearly sets out the Trusts objectives, the basis for the proposed changes in service and estate configuration, how these will be achieved and how the relocation and improvement in facilities will impact on the overall service provision in the North East of Wales The Trust will organise a series of road shows in each of the locations where there is planned ambulance station closures. These road shows will run within a local amenity and will include a presentation as well as written material. There will be an opportunity for the public to debate the proposals and have one to one discussions with ambulance staff following the open session The Trust believes that this approach will provide the necessary reassurance to the public that the proposals will not impact adversely on local communities and will actually enhance the quality of services provided without endangering the ability to respond to local needs Outline Arrangements for Benefits Realisation The strategy, framework and plan for dealing with management and delivery of benefits is described in the Project Benefits Realisation Plan shown in Appendix G This appendix details who is responsible for the delivery of specific benefits, how and when they will be delivered and the required measures Outline Arrangements for Risk Management The strategy, framework and plan for dealing with management of risk is described in the Risk Management Strategy shown in Appendix H This details who is responsible for the management of the specific risks, the early warning signs, how and when they will be monitored and the required measures Outline arrangements for Post Project Evaluation The outline arrangements for Post Implementation Review (PIR) and Project Evaluation Review (PER) have been established in accordance with best practice and are as follows. The requirement for Post-Project Evaluation Post-project evaluation is a mandatory requirement on all Trusts who are undertaking a project of this scope and scale. Version 08 - For approval 74

87 This section of the OBC sets out the plans which the Trust has put in place to undertake a thorough and robust post-project evaluation (PPE) It should be noted that the resource required for each PPE stage listed above is still being assessed. Framework for Post-Project Evaluation The Trust is committed to ensuring that a thorough and robust post-project evaluation is undertaken at key stages in the process to ensure that positive lessons can be learnt from the project. The lessons learnt will be of benefit to: The Trust in using this knowledge for future projects including capital schemes; Other key partnerships and local stakeholders to inform their approaches to future major projects and The NHS more widely to test whether the policies and procedures which have been used in this procurement effective PPE also sets in place a framework within which the Benefits Realisation Plan set out in Appendix G can be tested to identify which benefits have been achieved and which have not The NHS has published guidance on PPE and the key stages which are applicable for this project are: Evaluation of the project procurement stage; Evaluation of the various processes put in place during implementation; Evaluation of the project in use shortly after the new unit is opened and Evaluation of the project once the new unit is well established The detailed plans for evaluation at each of these four stages will be drawn up by the Trust in consultation with its key stakeholders. The paragraphs below will also set out how these arrangements will be managed, how information will be disseminated and in what timescale. Stage 1: Evaluation Project Procurement The objective of the evaluation at this stage is to assess how effectively the project was managed from OBC approval to approval of the FBC It is planned that this evaluation will be undertaken within six months of FBC approval The evaluation at this stage will examine: The effectiveness of the project management of the scheme; The effectiveness of the tripartite partnership and project structure; The quality of the documentation prepared by the Trust and supply chain partner; Communications and involvement during procurement; Version 08 - For approval 75

88 The effectiveness of Supply chain and its advisers utilised on the scheme; The efficacy of NHS guidance in delivering the scheme and Perceptions of advice, guidance and support from, WAG Welsh Health Estates Stage 2: - Evaluation Implementation The objective of this stage is to assess how well the project was managed from the time of FBC approval through to the commencement of operational commissioning This evaluation should be undertaken six months following operational commissioning of the unit The evaluation at this stage will examine: The effectiveness of the Trust project management of the scheme; The effectiveness of the project management of the scheme; The effectiveness of the tripartite partnership to develop robust joint working policies and practices; The effectiveness of the Design for Life: Building for Wales framework for the delivery of multi agency projects; Communications and involvement during construction and Support during this stage from other stakeholder organisations WAG, Welsh Health Estates and any other significant stakeholders; Stage 3 Evaluation Project in Use It is proposed that this stage of the evaluation be undertaken up to 12 months after the completion of operational commissioning of the scheme so the lessons learnt are still fresh in the minds of the project team and other key stakeholders The objective of this stage is to assess how effectively the project was managed during the Trust s and partners operational commissioning phase and into the actual operation of the new units The evaluation at this stage will examine: The effectiveness of the Trust and partner organisation project management of the scheme; The effectiveness of the project management of the scheme by the supply chain partner; Communications and involvement during commissioning and into operations; The effectiveness of the joint working arrangements established by the partner organisations to delver a tripartite site and realise the benefits; Version 08 - For approval 76

89 Support during this stage from other stakeholder organisations WAG, Welsh Health Estates and any others as appropriate; Overall success factors for the project in terms of cost and time, etc and Extent to which it is felt the design meets users needs from the point of view of tripartite staff. Stage 4 Evaluation Project is Well-Established This evaluation is undertaken about two to three years after completion of commissioning The objective of this stage is to assess how effectively the project was managed during the actual operation of the new tripartite and make ready depot The evaluation at this stage will examine: The effectiveness of the joint working arrangements established by the partner and the Trust team and Extent to which it is felt the design meets users needs from the point of view of staff and service benefits in tripartite working Management of the Evaluation Process The process will be managed by the partnership project team All evaluation reports will be made available to all participants in each stage of the evaluation once the report has been endorsed by the partner s boards The majority of the work will be undertaken by the Partnership Project Team The costs of the final post-project evaluation, once the unit is fully-established, are not currently included in the costs set out in this OBC The Partnership Project Team will seek to ensure that they keep abreast of projects which have been fully evaluated when in use and which have utilised the latest PPE guidance. The team will then take a view of the extent to which external support is required and make a submission to local commissioners based on the evidence which is available with regard to costs. Summary The partnership project team has identified a robust plan for undertaking PPE in line with current NHS guidance, which is fully embedded in the project management arrangements of the project NHS Wales Gateway Reviews Arrangements The impacts/risks associated with the project have been scored against the NHS Wales Risk Potential Assessment (RPA) for projects. The RPA scored 34, which equates to a medium risk project, and is attached at Appendix I An external Gate 0 Strategic Assessment has not yet been formally undertaken in relation to the project, however, the Trust wide Strategic Estates SOC has been completed and submitted to WAG. Version 08 - For approval 77

90 The Trust plan to conduct an internal combined Gate 1 (Business Justification) and Gate 2 (Procurement Strategy) review on the Project following submission of the OBC and before development of the FBC. The intention is to review: Overall Programme to ensure the Project is compatible with aims and objectives; Resources provided to progress the Project; The VFM solution in conjunction with the SCP and The benefits of the tripartite solution Further reviews are planned in accordance with the NHS Wales Gateway Review arrangements Contingency Plans In the event that this project fails, the Trust will have to maintain the service within the existing facilities however they will not be able to meet the requirements of the proposed service model current HBN recommendations. Version 08 - For approval 78

91 Appendix A Analysis of Non Financial Benefit Scores Version 08 - For approval 79

92 Version 08 - For approval 80 North East Wales Estate Development OBC

93 Appendix B Economic Appraisal (Electronic Appendix) Version 08 - For approval 81

94 Appendix C OB Forms (Electronic Appendix) Version 08 - For approval 82

95 Appendix D Optimism Bias (Electronic Appendix) Version 08 - For approval 83

96 Appendix E Non Financial Risk Assessment Version 08 - For approval 84

97 Version 08 - For approval 85 North East Wales Estate Development OBC

98 Appendix F Letters of Support Version 08 - For approval 86

99 HCW statement of support for the WAST OBC the Development of Operational Estate in North East Wales The following is the HCW statement to be included within the draft OBC: The OBC is set within a solid strategic framework, begins to deliver the WAST Strategy: Time to Make a Difference and sees the provision of jointly located Emergency Services that support working across organisational boundaries in an integrated way, as envisaged in Making the Connections: Delivering Better Services for Wales. Additionally, the proposal to develop Ambulance Resource Centres and Make Ready Depot s supported by the introduction of new social standby and development points is in line with the key themes emerging from the Joint WAST/HCW sponsored external Efficiency Review of the Emergency Ambulance Service. WAST is seeking capital funding, including capital charges, from Welsh Assembly Government and approximately 380,000 p.a. revenue funding from the Commissioner of the Emergency Ambulance Service. There will be lead in costs over the period 2009/10 to 2011/12 by which time both parts of the proposed developments are up and running. HCW and WAST will confirm these costs in the development of the FBC. There are explicit benefits arising from the schemes, not least increased productivity by front line ambulance staff; improved operational systems, improved vehicle hygiene; estate rationalisation and reduced estate administration costs. There are also a number of implied benefits which are not sufficiently expressed within the document but can be covered more appropriately in the development of an FBC. Particular examples are improved patient services through improved performance responses (new standby and deployment arrangements) and strengthening arrangements under the Civil Contingences Act. A revenue ceiling of 380K p.a. has been set for this scheme at 2009/10 prices; however, in reviewing the OBC HCW believe that some potential savings have been understated or not included, and some of the costs require further discussion e.g. those associated with the cleaning regime for the vehicles. HCW firmly believes therefore that the net revenue cost will be less than stated, and will work very closely with the Trust to validate expected revenue costs and savings as part of the development of the FBC. It is not appropriate for HCW to commit a successor organisation(s) to future expenditure, but there are sufficient benefits already identified within the OBC that: HCW strongly recommends that the OBC be progressed to an FBC. During this process the new organisation(s) can be involved in the more detailed discussions and address the points covered in this submission. Version 08 - For approval 87

100 Version 08 - For approval 88 North East Wales Estate Development OBC

101 Version 08 - For approval 89 North East Wales Estate Development OBC

102 HEDDLU GOGLEDD CYMRU SWYDDFA R PRIF GWNSTABL GLAN Y DON BAE COLWYN LL29 8AW NORTH WALES POLICE CHIEF CONSTABLE S OFFICE GLAN Y DON COLWYN BAY LL29 8AW DX Old Colwyn Ffôn (Cymraeg): Bae Colwyn Ffacs: Bae Colwyn Telephone (English): Colwyn Bay Fax: Colwyn Bay: R. Brunstrom, B.Sc.(Hons.) Q.P.M., M.Sc. Prif Gwnstabl/Chief Constable Ein Cyf:/Our ref: CC/4311/MLJ 30 April 2009 Eich Cyf:/Your ref: Mr Alan Murray, Chief Executive Officer, Welsh Ambulance Service NHS Trust, Trust Headquarters, H.M. Stanley Hospital, St Asaph, Denbighshire. LL17 0RS Sent via alan.murray@ambulance.wales.nhs.uk Version 08 - For approval 90

103 HEDDLU GOGLEDD CYMRU SWYDDFA R PRIF GWNSTABL GLAN Y DON BAE COLWYN LL29 8AW NORTH WALES POLICE CHIEF CONSTABLE S OFFICE GLAN Y DON COLWYN BAY LL29 8AW DX Old Colwyn Ffôn (Cymraeg): Bae Colwyn Ffacs: Bae Colwyn Telephone (English): Colwyn Bay Fax: Colwyn Bay: R. Brunstrom, B.Sc.(Hons.) Q.P.M., M.Sc. Prif Gwnstabl/Chief Constable Ein Cyf:/Our ref: CC/4311/MLJ Eich Cyf:/Your ref: 30 April 2009 Mr Alan Murray, Chief Executive Officer, Welsh Ambulance Service NHS Trust, Trust Headquarters, H.M. Stanley Hospital, St Asaph, Denbighshire. LL17 0RS Sent via alan.murray@ambulance.wales.nhs.uk Dear Alan Wrexham Emergency Services Collaboration North Wales Police does support in principle the Outline Business Case for tri-service collaboration at Wrexham for submission to the Welsh Assembly Government. However the timescales included in the OBC for the development of the project do not align with the Force s existing 5 year capital programme. The time available prior to OBC submission has been insufficient for a full review and option appraisal of North Wales Police s requirements at Wrexham, and we must therefore reserve our position in terms of committing capital expenditure at this stage. The Force s option appraisal will be undertaken during the next 2 months and on the basis that the OBC is approved by WAG we will feed the result of the appraisal into deliberations during development of the Final Business Case for the tri-service collaboration. Yours sincerely Richard Brunstrom Prif Gwnstabl / Chief Constable Version 08 - For approval 91