Joint NHS/University capital projects - A guide to the treatment of embedded accommodation in joint projects
Reference M 7/96
Published March 1996
The electronic version of this document contains the Introduction, Contents and Scope only. The complete printed document is available from the HEFCE.
Introduction
1. Proposed changes to the configuration of health services can have important implications for the accommodation and facilities of medical and dental education and research. Likewise, the planned mergers of Medical Schools, to create new schools linked to multi-faculty colleges with strong life science departments, will potentially impact on the NHS. This paper summarises guidance in relation to Medical and Dental School (referred to here as University) accommodation that is "embedded" within NHS hospitals, and the implications should the NHS decide to rationalise or transfer its services and facilities. It is equally applicable to circumstances in which NHS accommodation is "embedded" within University buildings or estate.
2. 'Joint Medical Capital Projects' (EL(95)92) was issued in August 1995 and contained guidance on University/NHS capital planning interactions. Following its publication, the Steering Group on Undergraduate Medical and Dental Education and Research (SGUMDER) set up a subgroup to examine issues relating to the impact of NHS capital charges on the reprovision of Medical and Dental School accommodation and to consider the need for further national guidance. The subgroup comprised representatives of the NHS Executive, the Higher Education Funding Council (HEFCE) and the Committee of Vice Chancellors and Principles (CVCP).
3. SGUMDER has accepted the subgroup's recommendation that no new guiding principles are required, but that existing guidance should be brought together into a single document for both NHS and University use. This document therefore consolidates extant guidance on embedded accommodation and clarifies the capital charges position with regard to NHS reprovision of embedded University accommodation. It summarises, and does not replace, existing guidance.
Contents
- Introduction
- Section 1 Scope of guide
- What is embedded accommodation?
- The importance of local negotiation
- Scope of the guidance
- Section 2 Consolidated guidance
- Justifying capital investment
- Securing capital finance
- Paying for new capital assets
- Ownership, leasing and disposal of assets
- Section 3 Further information
- Contacts
- References
- Appendix
- References and further guidance
Section 1 Scope of guide
What is embedded accommodation?
4. The term "embedded" is used here in its broadest sense. It refers to accommodation that is truly embedded (or enclosed) within the buildings of another organisation, and also to accommodation which, though not strictly enclosed, is intrinsically related to the accommodation or activities of another organisation. The latter interpretation of "embedded" will include, for example, University accommodation located on an NHS site (whether adjoined or freestanding) which is affected by an NHS Trust's plans to rationalise services or accommodation. Proposed Medical School mergers may similarly impact on the ability of an NHS Trust to continue to provide services in the way in which it currently does, or the way in which it plans to in the future.
5. NHS Trusts and the Universities associated with them, will need to communicate effectively and at an early stage about proposed changes to configurations that might affect the other party. The organisations involved will need to decide locally whether their particular circumstances give rise to an issue for embedded accommodation. Where there is agreement that this is so, both parties should familiarise themselves with the principles contained within this guide and any other relevant associated guidance.
The importance of local negotiation
6. It is not possible to provide clear guidance which covers every potential circumstance in which a University or NHS Trust may find itself in relation to embedded accommodation. This guide provides some general principles but, most of all, emphasises the importance of local negotiation to resolve areas of uncertainty or potential conflict between the NHS and associated Universities. Major changes to the configuration of one organisation that impact on the other should be discussed fully by both parties and resolved at an early stage of capital planning.
7. Without mutual agreement to the proposed changes and the respective responsibilities for funding them, it will not be possible to justify the proposed investment and so secure its approval (NHS Executive and the HEFCE). The normal channels of advice will be available to Trusts and Universities and should be consulted where further clarification or guidance would be helpful for individual cases:
- the Trust Units (performance management) of the Regional Offices of the NHS Executive; and
- the Regional Finance Advisors at the HEFCE.
8. In addition, NHS Trusts and Universities should take account of the liaison arrangements defined in 'The Fourth Report' of SGUMDER, which reflect the revised "ten key principles" for cooperation between Universities and the NHS set out in that report.
Scope of the guidance
9. This paper draws together a range of existing guidance which impacts on the treatment of embedded accommodation in joint projects. It introduces no new principles, but consolidates into a single document the guidance which is already available to Universities and the NHS. Further, related guidance and other relevant documentation are listed in the Appendix.
10. This guidance covers the four main areas that represent the key issues for joint NHS/University projects. These are:
- justifying the need for capital investment through business case (NHS) and option appraisal (University) processes; securing the capital finance needed to implement the proposed investment;
- paying for the use of the new capital asset (including servicing the debt) once it is secured; and
- ownership, leasing and disposal of assets.
11. The remainder of this guidance deals with each of these areas in turn.