Royal National Orthopaedic Hospital: Redevelopment

Baroness Dean of Thornton-le-Fylde Excerpts

Thursday 17th March 2016 Grand Committee

Asked by

[Baroness Dean of Thornton-le-Fylde]

To ask Her Majesty’s Government what plans they have for the redevelopment of the Royal National Orthopaedic Hospital, Stanmore; and in particular what the timings will be for that redevelopment.

[Baroness Dean of Thornton-le-Fylde (Lab)]

My Lords:

“I am very grateful to have an opportunity of raising the question of the future of the Royal National Orthopaedic Hospital in Stanmore. I also appreciate the courtesy of the Minister in coming to the House to reply. I hope that he will respond positively to my remarks on the future of the hospital”.—[Official Report, Commons, 25/5/1984; col. 1413.]

I agree with those words, which are very relevant to today’s Question for Short Debate. However, they are not my words: I was quoting from the introductory remarks of Hugh Dykes—now the noble Lord, Lord Dykes, in this House—who was then the MP for Harrow East when he opened his debate on 25 May 1984, over 30 years ago. In his response, the Minister, the then Parliamentary Under-Secretary for Health, John Patten MP—again, now a Member of your Lordships’ House—referred to the noble Baroness, Lady Trumpington, then a Minister, answering a Question in the House of Lords on the same topic from Lord Diamond. I could have quoted from a debate in Westminster Hall sponsored by the current honourable Member for Harrow East, Bob Blackman, on 4 March last year, at col. 347.

So the issue of the redevelopment of the Royal National Orthopaedic Hospital has been debated for 30 years. In that time there have been 13 independent reviews, all of which have concluded that the hospital should remain as an individual organisation, continuing to provide on the Stanmore site the excellent care that it has done for over 100 years of its existence.

The hospital has a national and international reputation for excellence and is the UK’s leading provider of specialist orthopaedic treatment and surgery. It is the nation’s largest provider of complex spinal surgery and it trains 25% of the nation’s orthopaedic surgeons. It is rated in the top 20% of hospitals in the national in-patient survey. Its 1,400 staff—70% of whom provide clinical services—look after some 15,000 in-patients and over 100,000 out-patient attendances every year. The care provided by the hospital is highly rated by the Care Quality Commission, which gave it outstanding for medical care, outstanding for clinical outcomes for patients, outstanding for innovative surgery to improve the quality of patients’ lives, and outstanding for the executive board, which it declared as,

“demonstrating leadership and vision for the hospital”.

It judged children and young people services as needing improvement, a factor being that the location of the wards for these patients meant that they had to be taken outside the buildings in order to access and return from theatre—one of the many reasons why a decision to proceed on the redevelopment is now, after over 30 years, not only pressing but urgent. A decision must be taken and acted on.

Indeed, the National Clinical Advisory Team review concluded that reprovision of services on the Royal National Orthopaedic Hospital site was urgent given the condition of the estate and the potential impact on quality of services of any further delay. That is not surprising as some of the buildings go back to the Second World War, built for the airmen defending our shores in that conflict. They are totally unsuited for today’s needs of a modern health service.

Another review concluded that some £50 million was required to be spent on the backlog of maintenance and repairs to bring it up to the required standards. That is more than the cost of delivery of the proposed development now being considered.

So how does it get done? It is not too surprising—those of us who have worked in the public sector will possibly have experience with projects—that the redevelopment of this hospital has gone through several iterations over 30 years. Hopes have been raised and then dashed for a variety of reasons. But now, with a strong executive leadership and vision commended by the Care Quality Commission, the hospital has the best chance yet to get the go-ahead. Some in the hospital and its partners say it is the last chance. One said to me, “Brenda, it is a bit like the Elvis song, ‘It’s Now or Never’”, and, frankly, that is how it is seen by many associated with the hospital.

The outline business case was approved by the NHS Trust Development Authority in March last year. It came, unsurprisingly, with conditions, all of which have been addressed. The full business case is scheduled to be officially approved by the hospital board on 30 March and then submitted to the TDA. The hospital is not asking the Government for enormous sums of money, just £40 million—yes, that is a lot of money in anyone’s terms but, when you put it in the big picture, it is not. Half of that £40 million would be repaid immediately as land is released to a private development partner. The balance of £20 million would be a loan to be repaid by the hospital over 20 years. This is not a PFI scheme; the hospital will not be tied into a project of crippling fees on a never-ending merry-go-round. The TDA has said that it needs eight weeks after receipt of the final business plan to approve the money. Against that promise, the hospital has planned on a contract signature to go ahead by the end of June with Balfour Beatty, which is lined up to start on the site in July this year.

Mitigating the cost of the project will require some of the 112-acre site to be sold for redevelopment. Planning permission is in place and there is no local campaign against the project. It is all going in a positive direction, except for the decision. The hospital board submitted the necessary land sale part of the project to the NHS TDS Investment Committee in March this year, which was approved. The cost to build will be £42.5 million, which is why the initial £40 million investment is needed. The first build will be a ward block and completion of the first stage will allow for the sale of the land for redevelopment—decanting into the new building will release the land. This will bring in, according to the professional assessments, an estimated £20 million, which will be repaid immediately to the NHS.

The project is visionary and will secure not only world-class facilities for a hospital providing world- class treatments, but more than 300 new homes locally, including affordable housing, as well as staff accommodation for the hospital itself. The plans include a new private patient care centre, which will generate income from outside the NHS both nationally and internationally, as the hospital has international patients. Investment of £23.5 million, of which £16.5 million is from University College London, with the balance coming from the sale of the orthopaedic hospital land, will be used to build a new bioengineering hub, with UCL. This will increase the orthopaedic hospital’s role as a national research reference centre. In addition, the redevelopment will provide for the expansion of the current National Orthopaedic Alliance vanguard and getting it right first time programmes. All this will help to realise improved care and savings for not just this hospital but the wider NHS.

Before I close, I should cover the issue of the current financial position of the hospital. For the last six years it has been in surplus. This year, for the first time in quite a long period, as with the overwhelming majority of hospitals in the NHS, the hospital will be in deficit by circa £5 million—not the eye-watering amounts that we have seen elsewhere. That is for the year, not the month, as it is in some other parts of the NHS, particularly in London. It is most certainly not something that should cause a delay in approval to go ahead.

This hospital is not part of a big trust group; it is not, in that sense, a local hospital simply providing services for people in the area. It therefore has no active campaign group making a noise to make sure the development goes ahead. It is a national, and international, provider of excellent care. It deserves support in our UK national interest, with an ageing population needing the very services the hospital provides, because it is a centre of excellence leading the way in so many areas of speciality—and, yes, because it is so highly regarded internationally too.

I could put it no better than the statement of the Care Quality Commission itself, which said:

“The Royal National Orthopaedic Hospital is a recognised world leader in treating patients with complex orthopaedic conditions”.

My request today, and the purpose of this debate, is to ask the Minister and his department for their full and active support in getting approval for the final business case to go ahead. Furthermore, I ask the Minister for his department to commit and lend support to the eight-week timetable given by the TDA. I ask for support to be given in minimising the barriers to the April to June period, given the history of delay, and that a clear, yes or no, decision is given, not a maybe.

I thank all Members of the House who have given up their time today to take part in this debate; it is just one hour but it is very important. I look forward to their contributions as much as I do to the Minister’s.

--- Later in debate ---

[The Parliamentary Under-Secretary of State, Department of Health (Lord Prior of Brampton) (Con)]

I thank the noble Baroness, Lady Dean, for bringing forward this debate. I did not know anything about the history of Stanmore until today and the briefing I had beforehand. It has been an extremely good debate. I echo the words of my noble friend Lord Finkelstein that we have reached the stage where everything has been said but not everyone has said it. I fall into that category. Let me put on record that I agree with everything the noble Baroness said in her speech rather than repeating it, as I would otherwise have done.

I wish to address a number of points and themes. First, this is not a PFI. We need not today go into the pros and cons of PFIs, save to say that my sympathies are with my noble friend Lord Tebbit: many of them have been incredibly expensive. When he used the word “pernicious” I think he meant that not only were they expensive but they have hidden liabilities that should appear on the public sector balance sheet. He may like to know that the future costs of the PFI schemes for health alone total £79 billion. This includes some of the soft FM contracts but it is a huge liability that ought to be on the face of the public balance sheet but is not. I say that on PFI, but this is not a PFI scheme.

Secondly, my noble friend Lord Tebbit and others made reference to the land sales that are part of this scheme. We use our property resource in the NHS fantastically badly. I am not saying whether or not the £20 million assumption here is a low level of money but sometimes in the NHS, because we are in a hurry, we sell things off quickly, whereas if we had more time and could explore matters through a joint venture or a more creative arrangement we might be able to bring in a lot more money. That is something I would ask the management to look at, but not as a way of deferring this scheme. I am pleased that Rob Hurd and Professor Goldstone, respectively the chief executive and chairman of the RNOH, are here today listening to this. We do not deal properly with our massive property resource. In gross terms we have £40 billion to £50 billion-worth of property assets within the NHS, which we do not use very well. If we walk around London we can see some of our hospitals in prime residential areas. These are worth a huge amount of money which we could use to redevelop our real estate within the NHS.

Thirdly, Stanmore is not only a beacon of excellence but the work that Professor Tim Briggs is doing to spread his Getting It Right First Time scheme across the NHS is hugely important. If we are going to get long-term sustainable improvement for the NHS we must have clinical engagement. The work that he is doing through his exposure of variation in orthopaedic practice is hugely important. If we can spread the learning that he has gained in orthopaedics into other surgical and medical specialties, it will make a huge contribution to the massive saving programme that we need to achieve over the next five years. Related to that, the fact that the RNOH is leading the National Orthopaedic Alliance vanguard around the country with a view to franchising the excellence in the RNOH into DGHs and other hospitals around the country must be a good thing.

My noble friend Lord Lansley raised the issue about specialist institutions. I agree the evidence is that, from a patient and clinical outcome point of view, specialist institutions are extremely successful. However, there are two caveats to that. One is that they can become insular; and the second is that they can be high cost. Often they are relatively small institutions and, because the tariff does not favour complex specialist work, they can be a disadvantage to the tariff.

The RNOH has addressed that insularity issue in two ways: first, through the tie-up with UCL on the biomedical engineering facility; and, secondly, through developing its work with the Royal Free, which is very important. That may enable it to take some costs out of its existing institutions.

The tariff, which my noble friend also raised, is something that we should address with NHS England and with NHS Improvement to be sure that it does not favour just those more commodity or routine orthopaedic operations at the expense of the more specialised, complex operations. I think—and my noble friend will know more about this than I do—that, originally, the tariff was structured to encourage the private sector to come into the more routine, so to speak, orthopaedic business. It has disadvantaged the more specialist institutions, which is something that we need to address. If I were coming here to say, “No, we’re not going to do this”, I would have to deal with not just my noble friend Lord Tebbit but an even burlier character in Professor Tim Briggs. He is a fairly typical orthopaedic surgeon and saying no to orthopaedic surgeons is never a happy experience.

I am, as I say, leaving aside the speech I would have made because it would simply repeat what has already been said. The TDA received the trust’s revised outline business case in January last year. Following its review of the business case, the TDA required assurances on two strands of work to be completed. The first was the development of an interdependent estates strategy and land disposal business case for the Stanmore site. The second was the further development of the NHS England vanguard partnership with the Royal Free London NHS Foundation Trust as part of securing the long-term sustainability of the trust. In relation to the vanguard partnership, the trust plans to present a formal report to the TDA on progress ahead of the full business case submission. Negotiations with the Royal Free have gone well, with an MoU between the two organisations signed, which aims to identify the clinical synergies of the two organisations and how their working more closely together could strengthen the clinical model. Those discussions have gone extremely well.

An outline business case for the land sale has been submitted by the trust and approved by the TDA investment committee and will go to the full TDA board. That should not hold up this project. If there is a way of increasing the receipts from the land sale, then clearly the management will be trying to do so. A full business case containing Balfour Beatty’s final proposals for the redevelopment of the hospital is expected to go to the trust’s board on 30 March. In April, the trust is expected to submit a full business case to NHS Improvement for review. In June and July the full business case is expected to go to NHS Improvement’s investment committee and, following that, to the NHS Improvement board. Approval will allow the trust both to clear the site available for sale and to fund the part of the new facility not covered by the land sale receipt. Construction will be completed in December 2017, with the new facility opening to patients in February 2018.

To conclude, this is very much a priority project for the Department of Health and NHS Improvement. The Government fully support the redevelopment of the RNOH and are grateful for the contribution it has made to the Getting It Right First Time project, led by Professor Briggs. I am happy to arrange a meeting, as the noble Lord, Lord Hunt, requested, with NHS Improvement on this issue. If it is all proceeding according to plan, that meeting might not be necessary but, if there is a glitch, I am happy to come back for another debate, but we fully support this and can see no reason why it will not be given the go-ahead according to the timetable that I suggested. Before I sit down, is there anything that noble Lords would like to raise that I have not covered?

[Baroness Dean of Thornton-le-Fylde]

We are not often asked to intervene in a Minister’s contribution so I thank the Minister very much indeed and welcome his contribution. If the hospital reaches any glitches, will his door be open for a meeting with the CEO and chairman of the hospital?

[Lord Prior of Brampton]

Yes, any time. I should have said that I have not had a chance to visit Stanmore but I would certainly like to do that. We are fully behind this case. I will go to the hospital anyway, but I hope that this will go ahead on this timescale.

[Baroness Dean of Thornton-le-Fylde]

They hope to break the land—first spade in—on 7 July. How wonderful it would be if the Minister did it.

[Lord Prior of Brampton]

Perhaps at the same time we could fill in the hole dug by my predecessor.