Under NHS revenue funded projects, usually referred to as Design, Build, Finance & Maintain ("DBFM") schemes, the Health Board pays the private sector partner (i.e. either sub-hubco under the hub programme or the private sector partner under the Non-Profit Distributing ("NPD") model) for the services it provides, which may include the construction of a new facility.
What does this mean?
• No payment is made until the facility is available and ready for use - no stage payments during construction;
• Payment of an annual Unitary Charge or Service Payment for the life of the project (this is not rent and it is not a lease);
• No service, no payment - deductions apply if, for example, consulting rooms are unavailable due to a burst pipe which is not fixed within a certain timeframe;
• DBFMs generally have a fixed end date - usually 25 years from the completion of the construction;
• Unitary Charge Payment from Service Availability throughout 25 Year life of the contract, a proportion of which increases in line with inflation; and
• Unitary Charge paid on a monthly basis less any deductions levied against the sub-hubco (which is a special purpose vehicle (SPV) set up by hubco for the purposes of ring fencing individual DBFM projects under the hub programme)