Partnerships Bulletin explores Prime's growth

14th February 2017

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Partnerships Bulletin explores Prime's growth

Prime’s Leighton Chumbley and Richard Laing talk to Partnerships Bulletin about the company’s growth and delivering solutions for today’s healthcare challenges.

As Prime enters its 21st year, Managing Director, Leighton Chumbley, and Chief Executive, Richard Laing, talk to Partnerships Bulletin about how the company has evolved and delivering solutions to meet today’s healthcare challenges.

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Coming into their Prime

At its start, Prime delivered new buildings for individual GPs. As the company approaches its 21st birthday, Leighton Chumbley and Richard Laing tell Paul Jarvis how the company has grown up.

2017 marks the 21st year of operation for health investor Prime. Founded back in 1996 by chairman Richard Laing, the business has grown significantly from its early days as a provider of new facilities for individual GP surgeries.

Last year, the company began to undertake some of its most complex and biggest projects to date, signing the large Irish primary care centres PPP deal (in a consortium with Balfour Beatty and InfraRed) and, toward the end of the year, launching a new procurement framework with its NHS partner in Yeovil to create a new avenue for health providers to access private capital.

“There are much more complex situations in the health sector today than years ago, when more money was coming into the system,” says Laing. “We work best in complex situations. If a client comes to us and says they have got a particular plan with certain constraints, I often think that is when we work best.”

Laing and his team have had plenty of experience of working in complex situations and believe their background in small primary care facilities, where land and cash constraints often meant having to think outside the box, has held them in good stead for today’s market, where more and more health authorities are looking for a more strategic approach to delivering and maintaining their infrastructure.

“We have grown up on doing complex projects and that seems to be what the market needs at the moment,” he adds.

Not long after Prime had established itself in the market, it found itself perfectly placed to take advantage of a revolution in primary care delivery, as the government of the day launched the Lift programme. Designed to upgrade and professionalise the primary care estate – replacing the old Victorian house with purpose-built facilities – Lift delivered a complete change in the way primary care services were thought about.

In some respects, the improvements made through the programme enabled the more recent plans for a more integrated healthcare system between primary and acute services to be more realistic, with many centres now capable of carrying out work that at one time was the preserve of the large hospital.

Laing remains convinced that the Lift programme provided a strong and successful model for the sector. “It offers a procurement-safe partnering environment,” he explains. “It is a great shame that there has been a degree of negativity in the press towards it, because it is a really good opportunity to create significant improvements.”

After the Lift programme began to fade, though, Prime chose not to stand still. It had built up a range of capabilities, not least through its largest and most complex project at the time, the £50m Birmingham School of Dentistry.

Leighton Chumbley, Prime’s managing director, takes up the story: “Three years ago, we recognised that things needed to change in the health sector and there was clear work needed between the primary, acute and elderly social care areas.”

“We realised we need a business that covers all these areas if it is going to be successful in healthcare,” adds Laing.

A change is coming

Chumbley believes that the market we are seeing emerging today is in part down to the Health and Social Care Act 2012 – or rather, a reaction against it.

“It is not seen in the same radical way as the 2012 Act was,” he says, “but it is as radical. The health sector is trying to turn the clock back to a pre-2012 world in some ways. Clients are asking for support and are being encouraged by the government to challenge us to come up with innovative solutions to existing problems.”

This, says Chumbley, is different to the world in the immediate aftermath of the 2012 Act, when NHS providers were encouraged to see all other operators – both public and private – as essentially competitors. That approach, many believe, has been proven to be a failure, because a truly market-driven, competition-focused NHS is not how healthcare operates most efficiently and effectively for patients.

“The Department of Health is now encouraging the NHS to work much more as a collaborative, unified system that puts the needs of patients at the forefront, rather than focusing on looking after their own organisations,” says Chumbley.

That may well be the theory, but is it the case in practice? The big healthcare news in January was a statement from the Red Cross charity suggesting that the NHS is facing a “humanitarian crisis” this winter, suggesting trust chief executives have far more on their hands to worry about than what to do with some surplus land.

Laing and Chumbley disagree. “There are a lot of opportunities out there because there are lots of problems that people want to solve,” says Laing.

“There aren’t any short-term fixes,” adds Chumbley. “To solve these issues, they need to be looked at in the long-term. While chief executives are having to do their best to manage the short-term issues, there is as much effort if not more than before being put into the long-term solutions.”

Both agree that organisations like Prime and others can help ensure momentum on the long-term agenda is not lost in the battle to deal with day-to-day crises.

It is this long-term thinking, combined with the focus on improved integration in the NHS, that has led to the rise of strategic estates partnerships (SEPs), something that Prime considers itself well-placed to deliver, and has already been involved in.

The concept has taken the company in some unusual directions, admits Laing. He explains that Prime arranged deals with a variety of food and retail providers to help fund the redevelopment of the University Hospital Southampton NHS Foundation Trust’s welcome centre.

However, it is Prime’s SEP with Yeovil District Hospital NHS Foundation Trust that could yet have the biggest impact on the direction of travel in the healthcare market. In November, Prime and Yeovil tendered an £800m Private Investment Construction (PIC) framework. Under the plans, Yeovil and a range of public and private sector clients will be able to procure construction services for projects funded through private capital, where the client has selected a Prime group company through a procurement process.

Chumbley explains the PIC’s purpose: “Yeovil has got limited capital and was looking for private finance to be injected into projects. But when we looked at the relevant construction frameworks, all had been designed with the assumption that the trust has the capital it needs. They don’t fit the requirements of an external investor.”

He adds that it was also recognised that establishing a framework just for Yeovil’s requirements would not be sufficient to attract the biggest players in the market. “We recognised we would encounter similar problems in Southampton and on other SEPs,” he continues, explaining that this then made the decision to set up a more widescale framework the obvious answer.

“The whole beauty of the SEP environment is that this is a joint problem and therefore a joint opportunity for us to deliver a framework that works for all trusts.”

And the response has been encouraging. “It has exceeded our expectations,” says Laing. “People have recognised that there is going to be activity to come out of it. It helps when you have our track record of delivering real buildings.”

Over the next year or so, Prime expects to see a lot more activity in this space – and intends to be leading it from the front.

“Lift and SEPs have proven that these partnering arrangements can work really well,” concludes Laing. “So that is our direction of travel.”

Article courtesy of Partnerships Bulletin

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