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Funding for local health infrastructure
The Local Improvement Finance Trust (LIFT) initiative is a Government-endorsed finance scheme based on long term joint ventures at national and local level to improve investment in primary and community facilities. It was introduced by the Department of Health in 2000 with the aim of attracting a total of up to £1 billion of private investment by 2010.
Already more than £2.3 billion of funding has been injected into GP premises and other community facilities. Over 500 GP practices have been accommodated in new, purpose built premises through the programme and patients have benefited from raised standards, additional capacity and co-location with other service providers. This means that local LIFT companies (LIFTCos) have the relevant experience.
NHS England chief executive Simon Stevens set out a vision in a recent interview in the Financial Times, in which he called for an increase in multi‑use facilities to help improve public health and control rising costs, as well as leading on integration between health and social care. LIFT is well placed to support this vision.
Working for local needs
The success of LIFT as a partnership model was highlighted in a 2012 report by the National Audit Office on the Lessons from PFI and Other Projects, when it was noted that: “Achieving better outcomes for less also requires an ability to work collaboratively with the private sector. NHS Local Improvement Finance Trusts, for example, also act entrepreneurially to build local partnerships between public bodies, such as NHS Trusts and local authorities, and think creatively about the needs of their local area to help bring about the co-location of services.”
Furthermore, the LIFT model was also formative in the creation of the Private Finance 2 initiative (the follow-up to PFI) which HM Treasury announced in 2012 and which mirrors LIFT in many crucial ways, including public sector shareholding and representation on project Boards. In a session with the Business, Innovations and Skills Select Committee in 2013 Geoffrey Spence, chief executive of Infrastructure UK, noted that LIFT companies had a “better sense of partnership” with the public sector than other Public Private Partnerships (PPPs) and that this was something that the government was looking to replicate through PF2.
LIFT was also set up with the aim of attracting investment into the most deprived areas of the country, which may otherwise not have had access to high quality healthcare facilities. In total, £891 million has been invested in the 10 per cent most deprived areas of the country, with £1.34 billion invested in the 20 per cent most deprived. Over 30,000 people have been employed by LIFT schemes nationally, and 80 per cent of construction spent has been on local businesses, highlighting LIFT’s significant contribution to local economies.
One of the major benefits of LIFT is that the local LIFTCo recommends and supports the development a Strategic Services Development Plan (SSDP) from which it is possible to identify where the current infrastructure provision is constraining the delivery of improved services. Drawing on local population data and the service delivery plans of the local public services providers, the SSDP underpins the estate development and management plan and allows the local NHS to point to areas where investment is required or where shifts in service delivery can be accommodated.
From this infrastructure review and reform comes the flexibility to implement new models of care and facilities that can often be used by a large number of providers including secondary care trusts. Plans are then signed off by Strategic Partnering Boards made up of representatives of the local public sector and private sector partners who are also accountable for the success of schemes.
Continuity and support
With a LIFTCo being established and part of the structure within its specific locality for at least 25 years they are part of the community and committed for the long haul of ensuring there is high quality estate in place, no matter which provider is contracted to deliver a service.
With full maintenance and life cycle replacement covered under LIFT agreements, for the full term of the lease, the estate will remain in excellent condition even after 25 years with none of the backlog maintenance issues that the majority of the public estate suffers from.
Moreover, the corporate and historical knowledge obtained through their work in their localities has placed LIFTCos in an excellent position to provide continuity and support in the future design of service and estate strategies for their local areas. As partnerships have developed over time LIFTCos have also provided more of their ‘Partnering Services’ to the local health sector, including consultancy, business cases, advisory services and extension of facilities management commitments. However much depends on leadership priorities within various localities meaning that there is a mixed picture across the country in how local areas seek to utilise LIFTCo expertise.
With the experience and expertise that exists within local LIFTCos we believe that public sector partners should be actively looking to partner with our members to design estates and service strategies fit for their local population.
Integrated Care Centre, Oldham
An example of a new facility incorporating multi-specialty services as part of the local overall service strategy is the Integrated Care Centre (ICC) in Oldham, part of the Community 1st Oldham LIFTCo.
The ICC is an eight-storey building in the centre of Oldham adjacent to the public transport bus terminal, Greater Manchester tram route and main link road from the M60.
The services provided from this one central location include GP surgeries, unscheduled care, dentistry and primary out of hours services. The ICC also accommodates services for district nursing, pharmacy, radiology, physiotherapy, occupational therapy, minor operations and orthoptics.
Audiology and children’s audiology, podiatry, MSK, breast screening, family planning and child health, including children’s mental health services also operate from the ICC.
Value for money
Tenants, such as GPs, occupy space in LIFT buildings under Lease Plus Agreements (LPAs), which differ from conventional leases as rents under LPAs cover whole lifecycle costs for the building as the landlord (the LIFTCo) is responsible for maintaining the premises to an operational standard throughout the asset’s life. Rent increases are also limited to the increase in the Retail Prices Index (RPI) meaning that they are more predictable than under a conventional private sector lease. The Strategic Partnership Agreement, to which all partners in a LIFT scheme are signatories, requires the LIFTCo to demonstrate that it is delivering value for money in relation to new projects by market testing or benchmarking. Market testing is undertaken at minimum five-year intervals and in the first five years the LIFTCo is allowed to demonstrate value for money through the production of benchmarking data.
What next for LIFT?
What is clear is that the LIFT model has brought about a number of positive changes to local healthcare economies and increased both choice and quality of care for patients with access to a range of services in often deprived communities. Despite this, there exists two key obstacles to further success.
Since the passing of the Health and Social Care Act, there has been much confusion surrounding the responsibility for planning and commissioning new estates at a local level, and many CCGs have not looked to frame their service strategies with a view to the needs of the local healthcare estate. Even in areas which have looked to push ahead with plans for the estate, a lack of clear approvals guidance from NHS England has meant commissioners are unable to move forward on even ‘shovel ready’ projects.
The LIFT Council believes that efforts should be made at a local level to develop Local Estates Forums, modelled perhaps on LIFT’s Strategic Partnering Boards, to enable CCGs, Health and Wellbeing Boards, Local Area Teams, Commissioning Support Units, Local Authorities, LIFTCos and the local outposts of NHS Property Services to map estate needs and plan what is necessary to deliver Joint Strategic Needs Assessments and local service strategies. To ensure that these bodies become more than just a ‘talking shop’, we would encourage the government to define their roles in statute with these forums working towards clearing defined Key Performance Indicators. Whilst CHP is leading on a similar strategic grouping in some LIFT areas, more needs to be done to ensure forums are established across all LIFT, and non-LIFT, areas.
In developing new premises the LIFT Council believes that the conclusions of the discussions which take place in Local Estate Forums need quickly taking forward and operating within a streamlined authorisation process.
The confusion in commissioning processes described above led to a complete freeze in all funding for primary care developments from NHS England early in 2014, whilst it looked to develop what is described as a ‘consistent national process to evaluate bids for funding’. This was finally lifted in the 2014 Autumn Statement as chancellor George Osborne announced a £1 billion fund, spread over four years, to help improve primary care infrastructure. We are pleased that further guidance published by NHS England in a recent letter to GPs has prioritised plans for funding that will extend service provision outside hospital settings, given the inherent experience of LIFTCos in already providing for such a shift in care. However, with much to do to bring the existing NHS backlog maintenance up to scratch (current estimates place the bill at around £4 billion) the £250 million annual fund will only scratch the surface of what is needed.
The LIFT Council is the trade association for the private sector equity investors in Local Improvement Finance Trusts (LIFT).