SaHF DMBC Volume 1 Edition 1.1.pdf - Shaping a healthier future

Figure 9.81: Approach to estimating transition costs 14
Transition Cost
Double
Running
(Staff)
Modeling Assumption
▪ 90% of staff (excluding consultants) in affected services
transfer, of which half incur 2 months double running
cost at a 10% premium
Calculation
▪ 90% * 50% * Staff
impacted 1 * WAAP 2 * 2
/12 * 110%
Redundancy
Training
Travel or pay
protection
▪
▪
▪
10% of staff (including consultants) in affected services
unable to transfer and get paid 12 month‟s salary as
severance
All staff (including consultants) transferring incur training
costs of an average of £1.5k
Half the staff (including consultants) transferring incur
excess travel costs or pay protection costs at £2k p.a. in
year 1 and £1kp.a. in year 2
▪ 10% x Staff impacted 1 *
WAAP 2
▪ 90% * staff impacted *
£1.5k
▪
50% * 90% * staff
impacted * £2k yr one
and £1k yr two
Transition
costs are
assumed to be
phased in over
2 years prior to
the end of
construction
Double
Running
(estate)
▪
2 months of fixed cost due to double running of services
with additional 100% for any on-going costs between
decommissioning and removing building e.g., securing
site, moving costs, etc.
▪ Fixed costs * 2/12 * 2
Although this is a more detailed methodology, the evaluation assessment remains
unchanged from pre-consultation, as summarised in Figure 9.82.
Figure 9.82: Evaluation of transition costs 15
£m
Option
A
B
C
Major hospitals
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
West Middlesex
St Mary‟s
Chelsea & Westminster
Northwick Park &
St.Mark‟s
Hillingdon
West Middlesex
St Mary‟s
Charing Cross
Northwick Park &
St.Mark‟s
Hillingdon
Ealing
St Mary‟s
Chelsea & Westminster
Northwick Park &
St.Mark‟s
Hillingdon
Double
running
(staff)
10
11
10
Redundancy
estimate
15
16
15
Training
costs
5
5
4
Excess
travel
costs
5
5
4
Double
Running
(estate)
18
22
22
Total £m
-53
-58
-55
VfM evaluation
(-)
(-)
(-)
Evaluation
▪ Revised „transition
costs‟
are approximately
£10m
more for each
option than in
the PCBC
▪ Options A, B
and C have
comparable
levels of
transition
costs, so
methodology is
to evaluate
each option „-‟
against this
criteria, as in
the PCBC
14 Notes from Figure 9.81:
1. „Staff impacted„ is the proportion of staff working in services moving from one site to another. This is
estimated based on assumptions on pay cost by service line
2. WAAP – Weighted average annual pay for staff members at the hospital. Double Running (staff) includes
consultant pay, other elements exclude consultant pay
3. Fixed costs include establishment, premises and fixed plant, depreciation and PDC, estimated at 10% of
costs for all sites except for PFI sites where it is estimated at 15% of costs
15 Reconfiguration modelling
9d. Decision making analysis stage 6 and stage 7 397