1.6 Funding for small scale redevelopment and refurbishment of primary care premises may still be available from traditional public capital investment. But the scale of investment and resources needed to redevelop substantial portions of the primary care estate required an innovative approach. LIFT offers many advantages to the local health economy while its structure fits with Government policy to use private sector investment where feasible to increase investment in healthcare. LIFT schemes are a partnership - the private sector provides a large proportion of the overall funding and have expertise in, for example, property development and project management. Furthermore because LIFT transfers property development and management risk to the private sector, the partnership enables public sector healthcare professionals to focus on delivery of a good quality service. For example, unlike a conventional lease, the lease agreement in LIFT was designed so that the LIFTCo, as landlord, takes responsibility for repair, maintenance and insurance of the premises.
1.7 Conventionally, improvements to premises may also be procured as third party developments - where GPs or Primary Care Trusts engage a private sector contractor to redevelop premises on their behalf and then lease the premises back from the contractor. LIFT may be less appealing to GPs attracted to third party development; they do not retain their capital asset and tend to lose overall control of the development. In some cases GPs take out private loans to fund improvements and keep control of the development. The development process in these cases can, however, be a burden on the GP practice particularly in the early stages of site selection and agreement of terms. Third party developments generally do not have the advantages of LIFT. In particular ad hoc GP developments may not fit with local strategic priorities, can lack input from Primary Care Trusts and may not encourage co-location of healthcare professionals.
1.8 More recently, PFI has also been used as a route to develop larger premises. Most primary care developments are, however, relatively small scale - at an average development cost of around £5 million.7 They are unsuited to PFI because of high transaction costs (current Treasury guidance suggests PFI should not be used for projects under £20 million). LIFT is designed as a batched approach to investment in a portfolio of properties to make smaller projects viable. The common approach and delivery through a national programme is a key advantage of the LIFT model. Primary Care Trusts and GPs do not need to develop contract documentation for new schemes as is the case using alternative procurement routes.
1.9 One further key advantage of LIFT is that it can also deliver quickly. Ashton, Leigh and Wigan LIFT completed negotiations on a bundle of projects in 13 months, compared to the very varied and unpredictable lead times which alternative routes for primary care development have taken to provide just one building.
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7 The development cost represents total capital cost including fees and interest.