3.30 If there are areas of accommodation that are not required and cannot be efficiently sublet, then it might be possible to mothball them so that full day-to-day service under the contract is not necessary and variable service costs can be avoided. Authorities should consider how long this arrangement will be for7 and what flexibility may be required to use the space again. A minimum service should be provided to ensure that assets do not deteriorate and lead to non-VfM restoration costs later. As noted above, PFI projects typically have a high proportion of fixed costs relative to variable costs. As such, Authorities should carefully consider the amount of variable costs that could be avoided by mothballing and discuss mothballing proposals early on with departmental PFUs.
3.31 Depending on the type of project and the space that is mothballed, there may be payment mechanism consequences. For example, reducing floor area in less operationally critical spaces may concentrate deduction risk in areas that are more operationally critical. As such, a recalibration of the payment mechanism may be required by senior lenders and/or investors.
3.32 As part of a wider efficiency programme, the Queen's Hospital is considering the potential for mothballing ward space for contingency. Any Trust considering similar estates and services strategies to reflect changes to clinical service requirements need to work with local PCT commissioners.
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7 If the period is too short, then the costs of mothballing might outweigh the savings, leading to negative