Annual Report and Accounts - The Great Western Hospital

Great Western Hospitals NHS Foundation Trust
Accounts for the year ended 31 March 2012
27. Private Finance Initiative contracts
27.1 PFI schemes on-Statement of Financial Position
The Trust has 3 PFI schemes which are deemed to be on-Statement of Financial Position at the period end.
These are the Main Hospital and Brunel Treatment Centre (treated as one agreement), Downsview Residences
and the agreement in place with Systems C.
Great Western Hospital
The contract commenced on 5 October 1999 for a period of 30 years until 4 October 2029. In terms of the contract
the operator company was obliged to build the Great Western Hospital, which was completed in November 2002,
for subsequent occupation and use by the Trust. The Trust pays the operator company a quarterly availability fee
for the occupation of the hospital and a quarterly service fee for the services provided by the operator such as
portering and catering. In October 2003 the Trust entered into a variation of the original agreement for the
construction of the Brunel Treatment Centre which is an extension to the original hospital. The construction of the
Treatment Centre has resulted in increased availability and service charges, however, the main terms of the
contract including the termination date remain unchanged. Subsequently, in September 2006, the Trust entered
into a refinancing agreement which resulted in a reduction in the annual availability payment again with no change
to the contract term. The amount of the availability payment is determined annually and increased based on a
combination of the annual increase in the Retail Price Index (RPI) and a fixed percentage increase of 2.5%. The
operator is obliged to maintain the buildings and replace lifecycle elements of the buildings where necessary. At
the end of the contract term the hospital buildings revert back to the Trust for Nil consideration. The nature of the
contract meets the criteria for treatment as a service concession under IFRIC 12. Accordingly the hospital
buildings are treated as an asset under property, plant and equipment with the resultant liability being treated as a
finance lease under IAS 17.
Downsview Residences
The contract commenced on 5 October 1999 for a period of 30 years until 4 October 2029. In terms of the contract
the operator company was obliged to build the Downsview staff residences on the Hospital site for the provision of
housing to hospital staff. At commencement of the contract the Trust made a capital contribution of £649k towards
the construction cost of the building. The residences are managed by the operator company who rent the
accommodation units to, primarily, Trust staff. The Trust does not pay the operator company an availability fee,
however, a monthly service fee is paid for the servicing of the units which is based on usage. The operator is
responsible for maintaining the buildings over the contract term. At the end of the contract term the accommodation
buildings revert back to the Trust for Nil consideration. The nature of the contract meets the criteria for treatment as a
service concession under IFRIC 12. Accordingly the residences are recognised as an asset under property, plant and
equipment. The cost of the building less the capital contribution has been accounted for as deferred income and is
released to income equally over the entire contract term.
Systems C
The Trust has a PFI contract in respect of the Integrated Clinical Information System which meets the criteria for
recognition as a service concession agreement as envisaged under IFRIC 12 and has, accordingly, been treated
as on statement of financial position. The contract is dated 27 May 2002 with an effective date of 13 November
2001. The contract is for 12 years and is due to expire on 12 November 2013. The contract is for the supply of
computer hardware and software together with the provision of ongoing support and system management services.
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