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The Private Finance Initiative – How Arts Add Value

Introduction

PFI is the public building procurement policy introduced by the government in 1993. Private companies have always built NHS hospitals. However, under PFI, a private consortia (funder, building contractor, architect and facilities management company) finance, build and then service and maintain a new hospital in return for an agreed annual charge from the NHS for both the use of the building and the provision of non-clinical services over a period of 25 years or more.

Thirty-three new hospitals, as well as other health facilities, are currently being built through PFI. It is the single biggest building programme in the history of the NHS. By 2008, the NHS will have a projected £4.2 billion worth of new investments through PFI.

The challenge for the NHS is to use this extensive building programme to raise the quality of healthcare design and architecture. It is a challenge widely supported by a number of key organisations: The Department of Health, NHS Estates, The Modernisation Agency, The NHS Confederation, The Medical Architecture Research Unit, The Commission for Architecture and The Built Environment, The Construction Industry Council, The Royal Institute of British Architects, The Kings Fund andThe Nuffield Trust among others.

How arts add value

The arts and artists have much to offer in helping the NHS rise to this challenge.

Artists can develop creative ways of helping the NHS trust develop an overall design vision for a scheme. They are also very effective at facilitating communication and devising consultation methodologies to ensure that users and local communities have a say in the developmentof design criteria.

As part of the design process artists working alongside architects and interior designers can contribute fresh ideas and new ways of thinking about materials and how they can be used.

There are also strong arguments for incorporating commissioned artworks into PFI schemes. The Achieving Excellence Design Evaluation Toolkit (AEDET) developed by The Centre for Healthcare Design, NHS Estates, recommends that design be evaluated under three basic headings: Functionality, Excellence and Impact. The arts have a significant contribution to make in creating impact. In particular, the arts can be used to:

  • Create local distinctiveness
  • Ensure that the built environment reflects individual human scale
  • Meet the spiritual and emotional needs of patients and staff
  • Support and improve wayfinding, for example by creating landmarks at entrances and in key public spaces
  • Enhance landscaping and interior design through creative use of materials and finishes
  • Enhance the prestige and reputation of the NHS trust during the redevelopment process.

The PFI design process

Commissioning artworks for the new building

Traditional building procurement allows a trial-and-error attitude during the development of detailed design, with solutions being created and modified in an iterative process. This is appropriate when the detailed design comes before a contractual commitment to build and means that changes and additions to the design can be made at any stage before final building contracts are issued.

However, under PFI, contractual commitments are being made with a private sector partner before the detailed design is complete. Once these contractual agreements are in place, any additions or changes to them will incur significant additional costs.

The requirements of the design are defined in advance by identifying the outputs required. These requirements set the framework for the design, within which more detailed requirements for the services to be provided can be accommodated.

To ensure that the arts are incorporated into both building and maintenancecontracts, they must be part of the output specifications.

These specifications should be quantifiable and measurable. By setting clear objectives for an arts projects at the beginning of the procurement process, the NHS trust and its private partner will be able to work together to achieve it.

If the arts are not included in the output specifications, it is likely that the private contractor will be unwilling to collaborate with an arts programme that might jeopardise the building schedule and add additional unexpected costs for items such as:

  1. The relocation and installation of artworks from existing hospitalsinto the new hospital.
  2. The installation of artworks in the newly built hospital as part of an ongoing arts programme.
  3. The cleaning, repair and maintenance of artworks in the new building as part of an ongoing arts programme.
  4. Any changes made to the design of the building in order to incorporate commissioned artworks such as:
  • Re-specifying windows to incorporate stained glass designs
  • Re-specifying floor finishes to include commissioned floor designs
  • Requesting additional lighting or electrical supplies linked to artworks
  • Strengthening ceilings so that they can take hanging artworks

Guidance on preparing output specifications is included in Public Private Partnerships in the National Health Service: The Private Finance Initiative Good Practice Section One: The Selection and Preparation of Schemes.

Managing the transfer of existing works of art to the new building

Artworks should be classified as equipment and be included on the NHS trust’s asset register. If the NHS trust wishes to transfer artworks as well as items of historical value or interest from an existing building to the new hospital, it is most likely that the private contractor will install the works in the new building, in which case they will be classified as ‘Group 2 Equipment’.

If it hasn’t done so already, the trust should carry out an inventory of all of its existing artworks and historical artefacts. This is a good opportunity to review whether all the works of art should be moved or whether some should be sold off or given away depending on their value, appropriateness and state of repair. Historical artefacts, while not always of great decorative value, are often a significant part of an institution’s history. Retaining them and sensitively locating them in the new building may help to create a sense of place and continuity.

Setting service agreements in place for an ongoing arts programme

The trust will have to set out what services it expects to be provided by the private sector as part of the project in the Invitation to Negotiate (ITN).

If there is to be an arts programme, output specifications will needto be developed for that service, whether or not it is to be providedby the trust or the PFI partner. Such output specifications should include:

  • The scope and aims of the arts project
  • Quantifiable objectives
  • Performance standards
  • Constraints
  • Estimated activity/output levels
  • System for performance management

If the service is to be provided by the private partners, bidders will be responsible for developing operational policies covering

  • Installation of artworks
  • Maintenance of artworks
  • Insurance of artworks
  • Provision of stage/platform for performance work
  • Provision of workshop and storage space for future arts projects
  • Provision of a temporary exhibition space

If the service is to be provided by the trust, careful thought and negotiation must take place as to how this will interface with services provided by the private partner. For example, will the arts project be permitted to install works on walls managed by the private facilities management company?

The arts strategy

It is recommended that the NHS trust start to develop an arts strategy or arts development plan alongside the Outline Business Case and continue to refine it in line with the PFI procurement process, so that a full arts strategy is in place alongside the Full Business Case.

In order to be of any use to the private partners, enabling them to calculate risk and cost, ensure that the arts strategy has defined parameters. As well as the output specifications for an ongoing arts programme as outlined above, it should also include a clear strategy for commissioningnew work, including:

  • Aims and objectives of the arts commissioning programme in relation to the PFI build
  • How the arts commissioning programme will be managed, including individual roles and responsibilities
  • A summary of the individual commissions, including information on where they will be located, what medium they will be made in and how they will be installed
  • Detailed briefs for each commission
  • Detailed budget and cash flow
  • Fundraising strategy
  • Timetable and key milestones
  • Communications strategy relating to the arts programme
  • Clarification as to who will own the commissioned work
  • Insurance and maintenance responsibilities

Key factors for success

Build consensus early in the process

  • Make sure that the trust design champion, the PFI project board and project director, as well as the private partners, understand the potential of the arts to deliver added value and meet key design objectives
  • Use examples of successful arts and health projects elsewhere to convince a sceptical audience
  • Organise visits to show what is possible, or invite those with arts and health experience to talk about the benefits
  • Involve the architect and other consortia designers at an early stage. Remember that designers are only human. If they have already produced a final scheme design they may take it personally if the client wants to make changes in order to ‘enhance’ it.

Art and Design Committee

  • Ensure that you have a well managed arts committee with clear terms of reference
  • Include the contractor, architect, PFI partner, facilities management company, local authority or regional Arts Council arts officers, the design champion (chief executive), the project director and members of the PFI board, as well as staff and patient representatives
  • This committee could also comment on and agree the interior design scheme

Professionalism

  • If art is brought into PFI developments it must be professionally managed so that all partners have confidence in the process and the art committee’s ability to meet deadlines. This may require the recruitment of a professional arts adviser or arts co-ordinator, employed either by the trust or the private partner
  • There needs to be a commissioning methodology that is clear and thorough without being too prescriptive
  • If you do not have an in-house arts adviser, consider using a specialist arts and health or public art consultant to guide you through the process

Managing Risk

PFI is about managing risk:

  • The proactive nature of art means that it is difficult for contractors to manage since it can be seen to represent risk
  • Be clear about the scope and parameters of the arts project. Identifythe quantity of work to be commissioned, locations, medium and method of installation
  • Write full and detailed briefs for each commission

Timing

  • Develop an outline arts strategy at the same time as the Outline Business Case
  • A clear statement about the arts in relation to design objectives early on will avoid arguments and save time and money later
  • Bring specialist arts advisers on board early
  • Start fundraising as soon as you have an outline strategy in place

Funding

  • The budget for the arts strategy needs to be secured early in the process in order to meet contractual deadlines
  • Even if it is to be raised from charitable sources, it might need to be underwritten by the trust or a charitable foundation
  • Think about who does the arts fundraising. It is a specialist job and it might be necessary to employ a fundraiser or to work with an arts adviser who has fundraising experience
  • If the money is to be raised by the trust’s fundraising campaign, a commitment to this and clear priorities must be set by the chiefexecutive

Summary of input required at design stages

Outline Business Case (OBC)

  • Commitment to incorporating arts written into OBC
  • Solicit specialist arts advice
  • Art and design committee established
  • Develop draft arts strategy with clear parameters
  • Identify funding for strategy
  • Negotiate underwriting if funding not already in place

Invitation to Negotiate (ITN)

Note in the ITN that the PFI partner should work with the trust to develop a final arts strategy in response to the design output specifications. Such output specifications might be a part of:

The Whole Development Statement

  • Design objective statement
  • Town planning issues, including the visual impact of the scheme
  • Key policy statements such as the arts strategy

The Architectural Output Specification

  • Standards for design, construction and finish
  • Schedule of general architectural requirements dealing with more subjective aspects of design, where requirements will be non-mandatory, such as an aesthetic statement and reference to an arts strategy
  • The type of environment – deinstitutionalised atmosphere etc

Equipment Schedules, including information as to the serviceissues and requirements of equipment

Artworks should be classified as equipment and be included on thetrust’s asset register

Itemise artworks according to whether they fall under:

  • Group 1 Equipment supplied and fitted by the contractor
  • Group 2 Equipment supplied by the trust and installed by the contactor
  • Group 3 Equipment supplied and installed by the trust

Highlight any existing equipment to transfer to the PFI partner.

Full Business Case (FBC)

  • Final arts strategy included in FBC
  • Detailed briefs written for all commissions
  • Roles and responsibilities, timetable and key milestones agreed for managing the commissioning process
  • Funds to implement arts strategy secured or underwritten
  • Management structures put in place to deal with ongoing arts programme post build
  • Identify opportunities for future commissions post build
  • Involvement of arts adviser and arts committee in interior and colour decisions at detailed design stage
  • Register of artworks to be relocated complete
  • Policy on installation and maintenance agreed with PFI partner

Reproduced by kind permission of NHS Estates.

Source: Improving the Patient Experience: The Art of Good Health – A Practical Handbook

NHS Estates ISBN 0-11-322499-0

©Crown Copyright

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April 2003