Queen’s Hospital – Review of PFI Contract


Barking, Havering and Redbridge University Trust


Queen’s Hospital, Romford, Essex



Client Details:

Replacing the former Old Church Hospital, Romford’s new 939 bed Queen’s Hospital, was handed over to the Trust on 16 October 2006, following a 39 months’ construction period.

Containing 4,500 rooms over 4 floors, the hospital was built by Bovis Lend Lease under a £261m PFI agreement. Catalyst Healthcare (Romford) Ltdhelpdesk, a consortium of Bovis Lend Lease, Bank of Scotland and Sodexo funded the construction of the hospital and Catalyst Lend Lease was responsible for managing its day to day upkeep and long term maintenance under a 36 year concession. A Managed Equipment Service was provided by Siemens Healthcare.

The Challenge:

We were engaged in July 2008 to review the performance of the facilities management services manager and work to achieve the following objectives:

  • Maintain working relationships
  • Achieve a complete understanding of the contract mechanisms and obligations
  • Accurately measure current service delivery against contractual specifications
  • Establish whether there had been any service creep, by way of variation or ad hoc deviation
  • Compare standards against the contract requirements
  • Validate work requests for delivery of value for money
  • Identify opportunities for cost savings and improving efficiency

Our Approach / Solution:

Having assembled a team with appropriate legal, commercial and operational experience, we then undertook (as part of its 7 step approach) a process which included:

  1. A systematic desktop review of the Project Agreement and principal subcontracts to ascertain the respective obligations, entitlements and reliefs.
  2. A workplace review of service delivery standards and charges.
  3. Preparation of proposals and recommendations. These were then presented to the Trust and an action plan agreed.
  4. Implementation of the agreed action plan.

The Results:

The following financial benefits were received by the Trust up to 1 December 2009:

Saving Amount
Insurance premium review rebate £900,000 (over a three-year period)
Reduction in clinical waste disposal costs £180,000 pa
Saving on theatre maintenance £30,000 pa
Reduction in cost for alteration work £70,000 (lump sum)
Increase in car parking tariff – share mechanism £175,000 pa
Total to date £1,355,000

Non-financial benefits have included more effective liaison, improved accountability and more rigorous claims management.

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