ProCure 21 to roll out 30 new mini-hospitals

A national publicly funded hospital building programme worth £2.2bn a year, launched last month under the ProCure 21 initiative, has pledged to deliver up to 30 new diagnostic and treatment centres (DTCs) worth £600m by March 2005.

The national programme, which follows hot on the heels of two ProCure21 pilot projects in the North West and Midlands, represents a revolution in the way NHS publicly funded construction work is procured. Under the national ProCure 21 programme, between five and eight principal supply chain partners (PSCPs) working in partnership with the NHS. They will deliver £2.2bn of hospital building and refurbishment work a year under a national framework contract rather than on a regional basis as originally planned.

The PSCPs will deliver and manage the work through large and complex supply chains of around 80 suppliers. The framework contracts are expected to run for between five and ten years and will include stringent performance targets for cost, quality, design and supply chain management.

Bolted on to this programme is a separate ProCure 21 package of around 30 DTCs, worth £600m, to be delivered by March 2005 if the government is to fulfil its pledge to radically cut NHS waiting times for routine operations such as cataract, knee and hip operations.

NHS Estates is now calling for expressions of interest for both packages from potential framework partners. PSCPs are expected to be chosen by August this year and the first work awarded by October.

Peter Woolliscroft, head of partnering at NHS Estates told CJ: "We are looking for national-sized supply chains that can work across the whole country but also have the flexibility to work locally using local SMEs. We are committed to protecting the local economies and local experience. We want to see many of the SMEs that already do excellent work for the NHS on a local basis included in these supply chains."

Woolliscroft said he expected some construction firms to form Special Purpose Vehicles (SPVs) in order to cope with the size and scope of the workload. He commented: "You have to be pretty substantial to do this amount of work a year, so I would expect to see SPVs and strategic alliances or consortia led by banks and developers."

Contractors welcomed the news but added a note of caution.

One said: "We would want some reassurance from the government that the workload was guaranteed. Governments have a habit of cutting back on spending plans when times get tough. We wouldn't want to be left high and dry two or three years down the line."

Another contractor warned: "Using local SMEs could be costly. The PSCP would be financially liable for any non-performance by the SMEs and would have to factor that into the profit in order to protect itself. That in turn would affect the value for money equation."

n Norwest Holst has been asked to proceed on a £12m diagnostic and treatment centre for Milton Keynes NHS Trust under the ProCure 21 pilot programme. The contract is unusual in that Milton Keynes is outside the two ProCure 21 pilot regions.

Milton Keynes NHS Trust had originally advertised the contract as a PFI project but decided to take the ProCure 21 route after winning £12m of trailblazer funding.