Healthcare Construction Market - UK 2007

SUMMARY

AMA Research has published the 2nd Edition of the Healthcare Construction Market - UK 2007 report, focusing on key market trends, structure and change within the NHS, major healthcare providers and companies, contractors and procurement issues. This report continues a series of shorter insights on key areas within public sector construction. Other completed reports include higher education sector and student accommodation market, an analysis of the Building Schools for the Future Initiative and the Procure21 and NHS LIFT forms of procurement in healthcare construction.

Key Areas Covered:-

• An overall review of both primary and acute healthcare in the public and private setting.
• Procurement of work by contractors, includes an analysis of PFI, Procure21 and NHS LIFT.
• Review of the structure and reform of the NHS in England, including the restructuring of PCTs and SHAs.
• Analysis of public sector funding for NHS acute and primary care facilities.
• Analysis of recent policy issues which have re-shaped the way in which primary care is being delivered including Out of Hours Care, Payment By Results and Practice-based Commissioning.
• Detailed analysis of the Government's targets for capital spending as outlined in the NHS Plan, an update of construction progress and an assessment of contractor's output of work in the healthcare market.

This report continues a series of shorter insights on key areas within public sector construction. Other completed reports include higher education sector and student accommodation market, an analysis of the Building Schools for the Future Initiative and the Procure21 and NHS LIFT forms of procurement in healthcare construction.

Of Particular Interest:-

• Reviews the progress of the PFI, Procure21 and NHS LIFT programmes and provides an update of schemes built since 2004.
• Focus on the different clinical areas - modernisation of GP surgeries, ‘one stop shop' healthcare centres and treatment centres and the introduction of a new wave of community hospitals.
• NHS commissioning now accounts for around 12.5% (£335 million) of independent acute sector revenues in 2005-06.
• The pace of growth is likely to moderate and healthcare expenditure beyond April 2008 will be set within the framework of the next 2007 Comprehensive Spending Review, which is expected to allocate less money to new hospital programmes.
• There are likely to be future changes to healthcare facilities characterized by an overall shift of resources from hospitals to ‘practice based care' in smaller, community-based facilities.
• Key drivers and future prospects for the healthcare contracting market.

Key areas of coverage in the report include:-

THE STATE HEALTHCARE MARKET IN THE UK

• Structure and Reform of the NHS, including restructuring of PCTs and SHAs.
• Legislative Drivers and Policy Issues shaping the way in which care is being delivered.
• Overview of the Primary Care Sector, including provision of GP surgeries, treatment centres, walk-in centres, dental provision.
• An overview of the Secondary/Acute care sector, including foundation hospitals and plans to increase the provision of foundation trusts and community hospitals and in the UK.
• Healthcare spending in the UK, including total healthcare spending, NHS budgets and primary care spending.

THE PRIVATE ACUTE HEALTHCARE MARKET IN THE UK

• Structure and size of the private acute healthcare sector in the UK.
• Increasing partnership of the private sector with the NHS.
• Acute Hospital provision & leading independent providers.

CONTRACTORS OUTPUT IN THE HEALTHCARE MARKET

• Value of construction new work output.
• Construction output by sector in 2006.
• Construction output in 2007 and Beyond.
• Analysis of contractors output in the public healthcare sector.
• Outlook for Healthcare Construction Work.
• The NHS Building Programme/Primary Healthcare Estate in the UK.
• Capital Expenditure in the NHS.
• Healthcare Work Output - Government Targets & Progress to Date.

PROCUREMENT OF HEALTHCARE CONSTRUCTION WORK

• Overview of principal procurement routes used in the NHS.
• The Private Finance Initiative - background, market size, progress to date, leading contractors.
• NHS LIFT - background, investment, scheme update & progress, principal consortia, future of NHS Lift
• Procure 21 - background, investment, scheme update & progress, future of Procure 21, PSCPs.
• The effect of Government policy on PFI, NHS LIFT and Procure21.

CONTRACTOR PROFILES

• Structure and size of the contracting industry.
• Key construction companies and contractors.
• Private sector consortia in healthcare.
• Contractor profiles - key contractors operating in the healthcare market.
• Healthcare developers - companies specialising in GP and primary care premises investment and development.

TABLE OF CONTENTS

1. INTRODUCTION

2. SUMMARY

3. ECONOMIC ENVIRONMENT

• 3.1 GDP
• 3.2 INFLATION & INTEREST RATES
• 3.3 UNEMPLOYMENT
• 3.4 HOUSEHOLD CONSUMPTION
• 3.5 HOUSING & CONSTRUCTION
• 3.6 STERLING
• 3.7 POPULATION PROFILE
• 3.8 CONCLUSIONS

4. HEALTHCARE SECTOR OVERVIEW - THE PUBLIC SECTOR

• 4.1 OVERVIEW & STRUCTURE OF THE NHS
  • 4.1.1 Legislative Drivers
• 4.2 THE PRIMARY CARE MARKET
  • 4.2.1 Overview & Primary Care Trusts
  • 4.2.2 GP Surgeries & Health Centres
  • 4.2.3 Treatment Centres
  • 4.2.4 Walk in Centres
  • 4.2.5 Dental Provision
• 4.3 SECONDARY/ACUTE CARE MARKET
  • 4.3.1 Overview & Structure
  • 4.3.2 Types of Hospital
  • 4.3.3 Emergency Care
  • 4.3.4 Hospices
• 4.4 HEALTHCARE SPENDING IN THE UK
  • 4.4.1 Total Healthcare Spending
  • 4.4.2 NHS Spending
  • 4.4.3 Primary Care Spending

5. THE PRIVATE ACUTE HEALTHCARE SECTOR IN THE UK

• 5.1 OVERVIEW AND SIZE
• 5.2 PARTNERSHIP WITH THE NHS
• 5.3 ACUTE HOSPITAL PROVISION & LEADING PROVIDERS
• 5.4 PRIVATE DENTAL CARE

6. CONTRACTORS OUTPUT IN THE UK HEALTHCARE SECTOR

• 6.1 TOTAL CONSTRUCTION OUTPUT
  • 6.1.1 Value of Output - Construction New Work
• 6.2 CONSTRUCTION OUTPUT BY SECTOR
  • 6.2.1 Repair & Maintenance
• 6.3 CONSTRUCTION OUTPUT IN 2007 AND BEYOND
• 6.4 CONTRACTORS OUTPUT IN THE HEALTHCARE SECTOR
  • 6.4.1 Outlook for Healthcare Construction Work
• 6.5 THE NHS BUILDING PROGRAMME/PRIMARY HEALTHCARE ESTATE IN THE UK
• 6.6 CAPITAL EXPENDITURE IN THE NHS
  • 6.6.1 Capital Funding Reforms
• 6.7 HEALTHCARE WORK OUTPUT - GOVERNMENT TARGETS & PROGRESS TO DATE

7. PROCUREMENT OF HEALTHCARE CONSTRUCTION WORK

• 7.1 OVERVIEW
• 7.2 THE PRIVATE FINANCE INITIATIVE
  • 7.2.1 Size of PFI Healthcare Market and Progress to Date
  • 7.2.2 Leading Players in the PFI Healthcare Market
  • 7.2.3 Problems with the PFI Process
  • 7.2.4 Affect of Government Policy on PFI
• 7.3 NHS LOCAL IMPROVEMENT FINANCE TRUST (LIFT)
  • 7.3.1 Background & Overview
  • 7.3.2 Investment in NHS LIFT
  • 7.3.3 Scheme Update and Progress to Date
  • 7.3.4 Principal Consortia and LIFT Partners
  • 7.3.5 Affect of Government Policy on NHS LIFT
  • 7.3.6 Future of NHS LIFT
• 7.4 PROCURE21
  • 7.4.1 Background & Overview
  • 7.4.2 Investment in Procure21
  • 7.4.3 Scheme Update and Progress to Date
  • 7.4.4 The Effect of Government Policy on P21
  • 7.4.5 Future of Procure21

8. CONTACTOR PROFILES

• 8.1 STRUCTURE AND SIZE OF THE CONTRACTING INDUSTRY
• 8.2 KEY CONSTRUCTION COMPANIES AND CONTACTORS
• 8.3 PRIVATE SECTOR CONSORTIA IN THE HEALTHCARE SECTOR
  • 8.3.1 NHS LIFT Consortia
  • 8.3.2 Procure21
• 8.4 CONTRACTOR PROFILES
  • 8.4.1 Alfred McAlpine
  • 8.4.2 Balfour Beatty
  • 8.4.3 Bluestone Construction
  • 8.4.4 Bovis Lend Lease
  • 8.4.5 Carillion Plc
  • 8.4.6 Costain Group Plc
  • 8.4.7 Galliford Try
  • 8.4.8 HBG (Hollandische Beton Groep)
  • 8.4.9 Interserve Project Services
  • 8.4.10 Kier
  • 8.4.11 Laing O'Rourke
  • 8.4.12 Robertson Group
  • 8.4.13 The Rydon Group
  • 8.4.14 Skanska
  • 8.4.15 Willmott Dixon
• 8.5 HEALTHCARE DEVELOPERS

TABLES AND CHARTS

• TABLE 1 SUMMARY OF MAJOR CAPITAL SPENDING PROGRAMMES IN THE PUBLIC HEALTHCARE SECTOR 9
• CHART 2 INTEREST RATES AND INFLATION (CPI) FROM 1990-2009
• CHART 3 PDI & SAVINGS RATIO AT CURRENT PRICES 1990-2009
• TABLE 4 EXCHANGE RATE FLUCTUATIONS 2000-2007 - STERLING TO THE DOLLAR, AND THE EURO, SPOT RATES
• CHART 5 AGE DISTRIBUTION OF THE RESIDENT UK POPULATION 2001 (‘000)
• CHART 6 VALUE OF UK NHS EXPENDITURE 2003-2010 (£ BILLION)
• TABLE 7 UK NHS PRIMARY CARE TRUST SPENDING ALLOCATIONS - 2003-2010 (£BN)
• CHART 8 PRIVATE ACUTE HEALTHCARE MARKET - % BY SECTOR (£ BILLION) 2005-2006
• TABLE 9 LEADING UK PRIVATE HOSPITAL PROVIDERS
• TABLE 10 MAJOR DENTAL COMPANIES IN THE UK
• CHART 11 VALUE OF CONSTRUCTION OUTPUT NEW WORK 1999-2009 (£ BILLION)
• CHART 12 VALUE OF CONSTRUCTION OUTPUT NEW WORK BY SECTOR - % BY VALUE 2006
• TABLE 13 CONTRACTORS' OUTPUT OF HEALTH SECTOR WORK (PUBLIC/PRIVATE) 1996-2006 (£M)
• TABLE 14 UK NHS CAPITAL SPENDING - 2003-2010 (£M)
• TABLE 15 CONSTRUCTION ACTIVITY IN THE UK HEALTHCARE SECTOR - PROGRESS TO DATE DECEMBER 2006
• TABLE 16 PFI HOSPITAL SCHEMES - BY STAGE OF DEVELOPMENT 2006
• TABLE 17 LEADING PFI CONTRACTORS BY TOTAL WORK WON (INCLUDING HEALTHCARE WORK) (£M) - TO DECEMBER 2006
• TABLE 18 LEADING PFI CONTRACTORS BY TOTAL PFI HEALTHCARE WORK WON (£M) - TO DECEMBER 2006
• TABLE 19 NHS LIFT SCHEMES - ENABLING FUND ALLOCATIONS (2005-06) (£M)*
• TABLE 20 NHS LIFT WAVE 4 - PREFERRED BIDDERS
• TABLE 21 MAJOR NHS LIFT PREFERRED BIDDERS/CONSORTIA TO DATE
• TABLE 22 MAIN PRIVATE CONTRACTORS - BY NUMBER OF EMPLOYEES 2006
• TABLE 23 UK'S TOP 20 CONTRACTORS BY GROUP TURNOVER 2005/2006
• TABLE 24 LEADING HEALTHCARE CONTRACTORS AND PRINCIPAL PRIVATE SECTOR CONSORTIA
• TABLE 25 PRIMARY HEALTHCARE DEVELOPERS/INVESTMENT COMPANIES
• TABLE 26 HEALTHCARE CONTRACTING - GLOSSARY OF TERMS