Bevan Brittan was a leading adviser in a bond deal to re-finance a PFI project for Leeds Teaching Hospitals NHS Trust, that has just reached financial close.
The Trust is one of the largest teaching hospitals in Europe, serving a population of 850,000 people in Leeds and 4.5 million across Yorkshire and the Humber region.
Bevan Brittan was chosen for the advisory role after a competitive bid.
Our commercial health practice team advised the Trust on bringing its 2004 PFI contract up to date by the inclusion of some PF2 principles, negotiating a variation protocol to supplement the contractual change process and documenting the arrangements for rectification of some design defects.
The original funding for the scheme came from the Treasury – one of only two health PFIs to be funded this way – which was repaid as part of the arrangements. We also advised our client on the terms and conditions of the financing agreements with a new lender, including variation bonds and termination liabilities.
As a result of the renegotiation, almost £2 million annually can be saved over the lifetime of the agreement – providing a total of £51.6 million extra for patient care. It means the Trust can now build a £3 million specialist clinical trials centre at St James’s University Hospital in the city.
When it is built in summer 2018, the new facility will enable more patients to join early phase clinical trials, saving lives and providing new treatments in crucial areas including cancer and heart disease.
The original 2004 PFI scheme paid for the Bexley Wing at St James’s Hospital – now home to Leeds Cancer Centre - and has been successfully operated by St James Oncology SPC Limited.
Over the past year, the health team has advised:
- 59 percent of all NHS Acute and NHS Foundation Trusts
- 25 percent of CCGs
- 100-plus private sector organisations working with the NHS
Sharon Renouf, head of healthcare at Bevan Brittan, said:
“This was a ground-breaking deal in re-working one of the historic PFI agreements in the NHS, that affect so many Trusts and other health authorities.
“We are able to advise clients on a number of different legal routes and mechanisms they can negotiate to ensure their PFI schemes are delivering value for money and provide due diligence to ensure projects continue to work in the interests of patients.
“As the NHS reaches a critical point in radically re-thinking how healthcare is delivered, Bevan Brittan’s commercial health practice can support clients with three core offerings.
“These focus on financial health and managing the books; reorganisation (particularly around STPs); and service improvement, including patient safety.
“Our long history of working with the NHS means that we are the firm best-equipped to support the sector as it changes.”