The requirement to consider PPP

2.5  All procurements in the NHS, which would involve capital expenditure, should normally consider PPP as a potential procurement method. Generally, PPP is suited for projects with capital expenditure requirements in excess of £20m, however, projects with capital expenditure of between £5m and £20m have previously demonstrated value for money under PPP, and projects of this size should be tested on a case by case basis. Where an NHSScotland Body considers that a project is not appropriate for procurement under PPP the NHSScotland Body should fully explain this in the OBC.

2.6  The role of the CIG is explained more fully in Chapter 3 of this section. Appendix 2a of this section contains a tool for conducting a formal assessment of whether a project is likely to be viable as a PPP scheme. In addition there may be circumstances when the outcome of the assessment is borderline or there are unique features which lead to choices in procuring the project. In such circumstances an informal market sounding exercise may be appropriate, together with a review of the market and evidence from other similar projects. Appendix 2b of this section sets out a model for conducting an informal market sounding exercise. The CIG will determine whether or not the project should be exempt from the requirement to consider PPP. Each project will be considered on its own merits and will not necessarily set a precedent for later schemes.

2.5  Fig 1: NHS Board/Special Health Board Process

2.6  Those NHS bodies with delegated responsibility can determine for themselves whether or not to consider these projects for PPP but ought to be able to justify their decisions, particularly in the context of their duty to achieve value for money. If responsibility has not yet been delegated then all Initial Agreements (IA) and Outline Business Cases (OBC) for projects other than IM&T projects in excess of £1.5m must receive approval from the SGHFD before continuing. The Approval limits are outlined at Appendix 1b of this section.