We seem to be entering a new age of megaprojects as countries around the world mobilise the private sector to invest heavily in multi-billion or sometimes multi-trillion dollar infrastructure initiatives.
Megaprojects (sometimes also spelled “mega projects”) are very large investment projects and require care in the project development process to reduce any possible optimism bias and strategic misrepresentation.
The most expensive large-scale megaprojects in the world range from bridges, tunnels, highways, railways, airports, seaports, power plants, dams and wastewater projects to entire city districts.
Megaprojects seem to be practically recession-proof and have continued despite the 2008 global economic slowdown likely spurred megaproject construction, since the governments of some countries among them China, India, and the United States saw investment in infrastructure as a way to stimulate growth. Moreover, many large corporations are locked into megaprojects, because only enormous undertakings seem capable of nudging their bottom lines.
Here, we take a look at 5 of the biggest, most important and spectacular megaprojects around the world.
Waterworld Hotel Concept, Songjiang, China By Atkin’s Architecture GroupWaterworld Hotel, Songjiang, ChinaWaterworld Hotel, Songjiang, ChinaWaterworld Hotel Concept, Songjiang, China By Atkin’s Architecture Group
Songjiang Hotel, China
“We Drew Our Inspiration from the Quarry Setting” Says Atkins Design Studio
The five-star hotel is designed by UK architecture office Atkins for Shimao Group and will offer around 400 rooms, with underwater restaurants, clubs, shopping facilities, a 10-meter deep aquarium and various sport activities such as rock climbing and bungee jumping.
The waterfall is a key feature of this hotel built into a 328-foot-tall quarry outside of Shanghai. The 19-story hotel will have the waterfall cascading down the middle and two hotel floors that are entirely underwater.
The building will get its energy from geothermal sources and will feature a green roof.
With its 650 architects spread around the world in 60 offices, Atkins Design Studio is an enormous organisation, with some pretty amazing Megaprojects under its belt.
The Three Gorges Dam ProjectThe Three Gorges Dam ProjectThe Three Gorges Dam ProjectThe Three Gorges Dam Project
Three Gorges Dam
Man has long used technology to harness nature and dam building has always been one of the most controversial methods.
Building a dam causes dramatic effects on the environment, yet can benefit man in innumerable ways.
Three Gorges Dam located in Sandouping, Yiling, Hubeiis is the largest power station in the world and took 14 years to complete at a cost of USD $37 billion ( ¥180 billion). The original estimated cost was USD $6 billion ( ¥20 billion). It can produce as much as 15 nuclear power plants and is expected to create 10% of China’s entire energy supply.
The Three Gorges Dam has moved 39 trillion kilograms of water 175 metres above sea level which scientists believe has altered the planet enough to change the speed at which the earth rotates.
The dam was first suggested by Sun Yat-sen, the first president of the Republic of China in 1919 and people have been working on it, researching how it would work and where exactly it would go for nearly 100 years.
London Crossrail
London Crossrail
Crossrail is Europe’s largest infrastructure project and is set to boost London’s rail capacity by 10%. The project will deliver approximately 11.9km of twin bore tunnels.
The $23 billion development 73-mile rail project will connect London from East to West, improving access to Heathrow Airport, central London as well as city’s surrounding towns and suburbs.
Eight boring machines have been cutting their way through earth to create 26 miles (42km) of tunnels.
Construction of Crossrail began at Canary Wharf in London Docklands on 15 May 2009, with tunnelling work starting in May 2012.
The Crossrail project is about 65% complete and engineers will now continue upgrading existing stations and building new stations in central London and London Docklands.
Working in partnership with China Southwest Architectural Design and Research Institute and the China Railway Design Institute, ADPI also won the competition to design and develop Terminal 3 at Chongqing Jiangbei International Airport in 2011. Phase 1 of the project will increase the airport’s capacity to 45 million passengers per year by 2020.Beijing’s new international airportBeijing’s new international airport
Beijing International Airport Terminal 1 to be World’s Biggest
Beijing’s new international airport
January 2013 saw work approved for a new airport in Beijing. With large sweeping, non-conforming arches that span inwards with curves to the interior, there is a definite stamp of Zaha Hadid Architects with their design language.
Playing host to eight runways and with the capabilities to cater for 130 million passengers every year, Beijing’s new international airport will be among the world’s largest and busiest once complete in 2017.
International Space Station (ISS)
One Giant Leap for Mankind
International Space station
The International Space Station (ISS) is the largest artificial body in orbit and can often be seen with the naked eye from Earth.
It may be one of the most ambitious scientific ventures ever and also the largest masterpiece of the human engineering in orbit around Earth at present. The station consists mainly of habitable and science modules, external trusses and solar panels to provide power.
The ISS provides a platform to conduct scientific research including astrobiology, astronomy, human research including space medicine and life sciences, physical sciences, materials science, space weather and weather on Earth.
What exciting projects did we miss on our list? Let us know in the comments section below.
Project Journal had the privilege of interviewing AXELOS previous CEO Peter Hepworth. Peter provided us with an insight into his role and AXELOS as a whole in October 2015.
AXELOS CEO Peter Hepworth
Peter joined AEXLOS as CEO in July 2013 and was previously Managing Director for Activision Blizzard a $400 million turnover and $150million EBIT business. In 2014, Activision Blizzard was the fifth largest gaming company in the world by revenue.
Peter is an economics graduate, chartered accountant, with an M.B.A. from Cranfield and A.M.P. from INSEAD.
What is AXELOS?
AXELOS is a joint venture set up in 2014 by the Government of the United Kingdom and Capita, to develop, manage and operate qualifications in best practice, in methodologies formerly owned by the Office of Government Commerce (OGC).
AXELOS is an independent organisation, allowing the user community to focus more on the content of frameworks and guidance without much interference. The firm puts a heavy focus on the guidance given, ensuring the content is fuelled by good ideas to keep the ITIL structure up to date. But while the business has a combination of access to one of Britain’s largest corporations and the UK government, more than 75% of publication sales and Prince2 certification is sold outside of the UK, a trend that is growing faster due to emerging markets.
The company varies its training approach. Its Portfolio, Programme, and Project Management Maturity Model (P3M3), for example, encourages users to assess their performance against benchmarks. Mike Acaster, PPM portfolio manager, says: “PRINCE2 is applicable to many sizes of organisation, but sometimes it’s better to be a bit more specific. It’s about tailoring advice for that context. In some cases it has been tailored, and people don’t realise it’s PRINCE2 – you have to scratch the surface.
How do you view the future of project management?
After years of being associated with large engineering and construction projects, project management has moved beyond infrastructure. Firms across different countries and sectors now acknowledge the need to manage their processes and keep costs and timing under control. As businesses begin to recognise the importance of project management worldwide, questions are being asked about the standards required. AXELOS is focusing on how these can apply to different staff and situations, as well as how workers can develop a career path in project management.
Is AXELOS popular aboard?
“It’s hard to measure the adoption of our products, but if you look at the number of exams taken, you can see strong growth outside the UK, as well as in the UK,” he says. “In the US there’s a lot of interest, and the biggest international user of PRINCE2 is the UN, to make sure their aid development is correctly managed.
“Our Managing Successful Programmes (MSP) product was used to deliver the Olympic Games. I was in Tokyo after they had won the right to host Tokyo 2020 and the focus was ‘When can we have MSP?’ They want to see the same success as London has had.”
What are the future priorities for AXELOS?
“Career path. For the individual, it’s about how your career can develop. There’s a different skill set between project and portfolio management, and no linear route. It comes to modularisation. We have been able to offer different dimensions.
Cyber Resilience is next. Companies need to put more emphasis on improving their reactions to cyber attacks rather than continuing to focus on prevent. Although there are a number of standards and best practices in place to prevent cyber attacks, firms are still falling foul, and this is usually due to the internal attitude and people, rather than technology.
New products launched in 2015 include PRINCE2 Agile; Cyber Resilience Best Practice and Continuing Professional Development (CPD).
What’s next?
Young people are learning things online and changing how it is done. We want our members to feel proud about having AXELOS qualifications and have launched digital badges so that project professionals can display their mark of professionalism across popular social networks.
Digital badges are tokens that appear as icons and are awarded to signify learning achievements in a way that can be easily verified and shared online. Our members digital badge’s will hold and display information about their professional development activity as well as the issue date and an expiry date.
Individual workers, organisations and entire industries can benefit from badges. Badges are a new form of currency – a more transparent and efficient way to communicate the acquisition and development of workplace skills.
From AXELOS to Microsoft, IBM to Oracle, many leading companies have adopted digital badges as a form of recognition for continuing professional development and certifications. The individuals who earn these badges enthusiastically share them to LinkedIn, Twitter, Facebook and other online destinations. Once shared, anyone can verify the authenticity of and learn more about the individual’s abilities. That shareability and verification can make all the difference in a competitive job market, whether an individual aspires to move ahead in her current position or move into a different job.
We also want continued openness from AXELOS, even more community collaboration and specific actions to further increase the relevance of AXELOS in the future.
Where do you believe project management is heading?
Anyone can benefit from project management guidance. “We are all project managers now,” he says.
The term ‘Modern Methods of Construction’ (MMC) embraces a range of technologies involving various forms of prefabrication and off-site assembly.
MMC is increasingly regarded as a realistic means of improving quality, reducing time spent on-site, improving on-site safety and addressing skills shortages in the construction of UK housing.
Bridge Crossing Modern Design
The variety of systems now available potentially allows the designer enough choice to sidestep problems deriving from constraints posed by the use of any one method. MMC systems, from closed-panel timber framed systems to bathroom pods are a palette from which designers can make choices. They are not necessarily stand-alone solutions that anticipate all the needs of an individual site and can be mixed and matched as appropriate.
These limitations are not obstacles to achieving the good design in MMC-based schemes, but may hinder the incorporation of more complex and innovative types of MMC from which greater overall benefits may be obtained which are considered under the following headings:
1. COST UNCERTAINTY
There is no doubt that, given products of comparable performance the key issue in purchases of MMC construction systems is the price. At present not enough is known about the potential costs of using volumetric and closed panel systems to enable confident specification at an early date. This inhibits designers from exploring the full potential of MMC systems. This is particularly true of the less repetitive, small, one-off scheme, where a smaller margin of benefits is gained from using MMC. The principal barrier to the uptake of MMC, therefore, seems to be the perception of cost uncertainty with respect to using more complex systems. Without doing substantial project-specific research, consultants and their clients simply do not know with enough degree of certainty how much the volumetric or closed panel systems are likely to cost, and what would be the savings to overall project costs produced by potential speed gains to offset against increased capital expenditure.
This is due to the complexity of assessing the ratio of cost of repetitive elements where pricing is relatively straightforward to the cost of adjusting elements or building in another method for the abnormal condition. Decisions to use innovative systems are likely to be made once designs are well progressed to enable teams to be more certain of costs. This can increase the potential for change or result in design compromise as the designer attempts to incorporate the specific limitations of a particular system in their design.
In an attempt to improve this situation, the MMC consultant and or clients could pull together a directory of MMC expanded to include cost comparison data. The huge range of variables involved inevitably makes this difficult, but a database of current construction cost information would be an invaluable resource.
Contemporary Building Facade
2. PLANNING PROCESS AND EARLY COMMITMENT TO A SYSTEM
The time it can take to obtain planning permission has obvious implications both for project cost but also, in some circumstances, for architectural design innovation.
Most of the more complex types of MMC have an impact on dimensioning, the choice of external finish and detailing may have some effect on the buildings mass. Therefore, the construction system should be chosen prior to a planning application to avoid abortive work, redesign or amendment, or even resubmission for planning permission.
However, developers whose money is at risk, frequently hold off deciding on the construction technique until the last practicable moment, in order to get any advantage from fluctuations in material or component pricing.
Given the potential for lengthy duration of planning applications, this means that there is little incentive to prepare initial designs for planning with a prior decision to incorporate MMC firmly embedded. In cases where the developer has a financial or business link with the supplier, this is less likely to be the case. As the majority of commercial or residential developments involve some kind of arrangement with a developer, agreement on construction systems is often left to the stage after planning.
3. TIME INVESTMENT
Another very significant factor is the time investment required at the early stages of projects. This is needed to develop the design when the project is still at risk. There is a direct relationship between the scale and complexity of MMC component and the amount of time required to develop a design at an early stage.
The introduction of advanced or complex MMC techniques into the design process is potentially costly to the design team. A significant amount of research is needed to explore alternative systems, to obtain verification of suppliers’credentials, investigate mortgage and insurance issues, visit previous sites, talk to system suppliers, obtain technical performance guidelines, understand junctions and interfaces, coordinate other consultants, obtain building control input and so on.
For a consultant, the only way of investing in this research is either through timely payment of increased fees by a visionary understanding client or through the anticipation of increased future productivity through repetition when a project is phased, or large enough, or likely to be followed by another similar project.
The potential of learning a system and then being able to repeat lessons learned efficiently is a powerful incentive for both client and consultant. By contrast, HTA’ s project at Basingstoke is an example of a phased project with a three to four-year duration allowed the design team to repeat various elements of the design, and the manufacturer to develop improved solutions to technical and supply problems.
HTA’ s project at Basingstoke
4. INSUFFICIENT COMMUNICATION
Improved dialogue at the outset of the project is vital if design quality is to be maximised. Constraints and opportunities implicit within a particular system are more easily incorporated into design if partners communicate pre-planning. Increased early communication can be fostered through improved long-term partnering relationships.
Clients should also partner with a range of suppliers and architects so that choice and flexibility is not restricted.
5. INEXPERIENCE
Generally, the inexperienced client or design team will have to do more research, with the result that there is likely to be significant design development without a specific system being incorporated.
This is a disincentive to using a more complex system involving a higher proportion of MMC, where early decision making and knowledge of a system’ s capabilities have a decisive influence on the nature of the architecture. However, encouraging the take up of MMC through the use of a dedicated funding mechanism may assist clients in finding time for research into suitable MMC techniques.
Dome Construction Berlin
6. SUPPLIER’S ROLE
Site capacity studies and early stage pre-planning design studies could be undertaken directly by system suppliers on behalf of clients, cutting out the usual procedure of commissioning design work by independent consultants.
7. ASSUMPTIONS
There are a number of assumptions that are generally held about certain types of MMC that may have been valid at one time but are no longer true today. There is a need for reliable and up to date information comparing system criteria, performance data, timescales, lead in times, capacity, construction time, sequencing issues, limitations, and benefits.
Therefore it would be helpful if a forum for discussion and experience exchange was set up.
8. DEMONSTRATING THE BENEFITS OF MMC
There is still a large amount of skepticism about the need to go very far down the line with MMC. This is reflected in the acceptance of the desirability of maintaining or indeed enhancing the pool of traditional craft skills throughout the UK.
A balanced view is that there is a demonstrable need for the wider use of MMC which is recognized by both industry and government. The best way for clients and the public generally to become more confident and knowledgeable about the quality of design achievable through MMC is to see it demonstrated.
9. FINANCIAL INCENTIVES
There is no doubt that spreading the burden of investment through the life of a project helps to ensure a higher standard of specification and hence quality. In the Netherlands, a ‘ Green Financing’system has been developed by the Dutch government that provides favorable loan finance when certain sustainable standards are reached. In the UK, the Gallions HA has pioneered a study of this, based on a scheme in Thamesmead, ‘ the Ecopark project’.
Eco Park is an eco-friendly business park built on the False Bay coast. This business park is at the cutting-edge of sustainable design and offers a unique working environment in a secure, well-managed facility.
For the first time, millions of professionals across the globe qualified in ITIL ®, PRINCE2 ® and PRINCE2 Agile┞¢ will be able to track and record their professional development through a Continuing Professional Development (CPD) scheme as part of the new AXELOS Professional Development Programme, which launches today.
The AXELOS Professional Development Programme is an online membership programme aligned to the global best practice frameworks of ITIL, PRINCE2 and PRINCE2 Agile, that provides members with a range of specialised tools. Members will be able to assess their ability against industry benchmarks and gain access to exclusive content and activities designed to develop their skills and knowledge.
The programme will give practitioners the confidence and tools to keep up-to-date and relevant in their field while supporting them in their professional development. By completing the required CPD points, members will earn a digital badge that can be shared via online platforms to demonstrate their relevance and commitment to professional development.
Peter Hepworth, AXELOS Chief Executive, said: “There are millions of practitioners with either ITIL or PRINCE2 qualifications, and we want to champion these professionals by giving them a means to develop their knowledge and skills. This new programme is all about offering additional value for IT service management and project management professionals which goes beyond passing an exam and gaining a qualification.
“Ongoing investment in professional development also benefits organizations as well as individuals. Employers can ensure that their employees are continually developing their skills and the new digital badges will also help employers source the right talent by using them to differentiate against individuals who haven’t kept their skills up to date.
“The scheme will enable ITIL and PRINCE2 practitioners to achieve industry recognition and enhance their own personal brand. In addition, employers who invest time and money in CPD can develop their teams and drive up standards while improving staff loyalty and morale.”
Those wishing to join the scheme must hold an ITIL or PRINCE2 qualification. AXELOS are running a promotion so anyone joining in 2015 can save £100 on annual membership costs, and just pay the initial £25 registration fee.
The Professional Development Programme is the latest addition to the best practice portfolio owned by AXELOS – a joint venture between the UK Government and Capita plc. More information can be found on the AXELOS website: https://www.axelos.com/professional-development
Project Journal staff were not involved in the creation of this content.
Prefab housing suffers from bad stigma due to the fact that some people saw the prefabs as ugly and characterless, and were afraid they would become slums – hardly the promised housing fit for heroes following the second World War. However, building homes from pre-made parts can save time and money. The term prefab or prefabrication often evokes thoughts of poor construction, substandard living conditions and a long-standing “temporary” solution.
Prefab dwellings are making a comeback driven by a lack of affordable housing, a rapidly growing economy and changing demographic trends.
Methods Methods of Construction (Mmc) Offer Significant Potential to Minimise Construction Costs
The term ‘Modern Methods of Construction‘ refers to a collection of relatively new building construction techniques that aim to offer more advantages over traditional construction methods. Off-site construction (OSC) is a modern method of construction, based on off-site manufacturing of building elements.
With exponentially lower construction costs, quicker construction, reduced labor costs and having the ability to achieve zero defects, MMC is gaining a lot of attention as the potential answer to the UK’s housing crisis.
In a valiant attempt to strip away prefabricated housings’ bad rep are MMC with contemporary sleek designs, and constructed to withstand the test of time. MMC housing has the capability to deliver both quality and quantity housing to the tune of ‘ £50,000 per unit.
MMC units hold the promise of being extremely energy efficient and environmentally sustainable. Many versions of MMC take into account how to utilise natural resources and reduce each unit’s carbon footprint. In addition, MMC also addresses environmental concerns by creating much less waste than a standard brick-and-mortar project. While it is plausible that a traditional build could hire a waste removal company who would have the ability to recycle up to 90 percent of the construction waste; with MMC projects, this will automatically happen.
M-house (pronounced “mouse”)
There have already been a number of successful examples of MMC housing constructed in various parts of the United Kingdom. The M-house (pronounced “mouse”) is designed and constructed to last an upwards of 100 years. While Architect Alford Hall have created quality MMC apartment buildings proudly showcasing a patio and private entrance for each flat.
Architect Alford HallCompass House by AHMM
While many of the MMC homes are still in their early years the upkeep and maintenance will be reduced by 50% since the OSC process lowers the risk of non-conformities.
MMC homes are being fabricated and designed to accommodate many different lifestyles, such as, two-story homes, tall six-story apartment buildings, single-family homes and log cabins are all available options for families looking at MMC.
While there is a plethora of design options available all MMC OSC projects have a common theme. The internal workings of the homes are fabricated off-site, while only the “outer skin” comes to fruition on-site. To even further streamline the process, it has been suggested that having a “catalog of pre-selected materials increases supplier relationships and makes the design process more streamlined.”
With the small sample available with progressive MMC systems, it is currently reasonable to conclude that using modern methods of construction to build homes can cost more than traditional home building procedures; due to the need for specialised MMC design consultants. However, outside of costs, MMC remains a faster home building method than traditional brick and block house building and is slowly becoming a relevant front-runner to answer the UK’s housing shortage.
The care sector is growing fast. People are its most valuable asset and investment in care-home developments is being fuelled by an ageing population and a growing demand for specialist skills.
Scalability and Replication Have Now Become the Building Blocks That Will Enable Residential Elderly Care Providers to Sustain Growth, Deliver Successful Change and Achieve High-quality Service Outcomes
Dean Jones, former Investment Growth Programme Manager for Care UK offers insight into how REC providers can take advantage of market opportunities by building a sustainable and scalable system. Jones’ experience includes programme managing a £250 million investment-growth programme from 2012 to 2015, which involved building and commissioning 20 new state-of-the-art care homes and their services. He also oversaw a £60 million 3-year investment in a Suffolk programme, for the building of 10 new care homes and 10-day clubs and bringing much needed additional nursing and dementia-specialist care to the community.
REC Providers Can Develop Their Own Blueprints to Replicate and Scale Growth
REC providers can learn much from Jones’ involvement with scaling successful care homes. In his work at Care UK, Jones employed innovative ideas for evolving the next generation of care homes and introducing a competitive edge through unique selling points to harness market potential. The trendsetting programmes have led to phenomenal success, with more than 30 new homes built over a five-year period, a level of growth rarely seen in this sector. Jones describes how REC providers can develop their own blueprints to replicate and scale growth.
Building a foundation
The organization relied on a guiding principle as it developed a scalable system. It consisted of a toolkit that would outline how to manage projects and launch new homes, along with the standard of care the organization expected once a home is operational. The first system in the toolkit, the Project Management Blueprint (PMB) consisted of methodologies, processes and systems that would guide the creation of an ambitious and exciting growth pipeline for new homes.
The Blueprint ensured that the programme and project’s team resources would deliver high-quality outcomes through the practice of sound project management, both at a programme and individual project level. However, the Blueprint was just one of three tools the organisation would use to govern the commissioning and operation of new care homes. The other tools, a Home Manager Launch Manual (LM) and a suite of Standard Operating Procedures (SOP), complemented the programme on the whole.
Building the Capability to Service the Demand Is the Key to Driving Growth
The blueprint
Creating the demand for growth and the environment for change is not enough to generate scalability. According to Jones, building the capability to service the demand is the key to driving growth. Instead of control, managers need to:
Introduce a framework and certainty about processes.
Implement repeatable best practices.
Build the ability to drive quality.
Equip people to do the best job possible.
Introduce a suite of project documents that directly suit the organisation’s purposes while ensuring consistence use.
Increase efficiency and productivity.
As a result of the Blueprint, Care UK was able to construct the building blocks for scalability and replication that would encourage change, growth and quality outcomes. When the foundation of an organisation is built on highly standardised and formal processes underpinned by highly developed performance-monitoring systems and the ability to control quality, it has a scalable business model. Another component involved in the process, evolving the product offerings through a process of service innovation enabled Care UK to apply standardised business-model concepts.
The requirements
Building a methodology for scalability involves considering project and business requirements first. Then, the organization can develop a system that meets the business and management-style needs to deliver successful outcomes. Jones employed a methodology that outlined the standard project-management methods to be used, and practices and guidelines to follow when managing new-home opening projects and business-transformation projects. With a disciplined, well-managed and consistent methodology, Care UK promoted the delivery of quality products and services, on time and within budget for each location.
The essential benefit of adhering to such a defined project- and programme-management methodology is the ability to demonstrate repeatable successes, rather than learning the same difficult lessons again and again. The objective of the methodology ensures that each new home opening was delivered to the highest possible standards via:
High-quality product or service that adheres to the business case.
Excellent standards of care and service.
Financial performance that achieves or exceeds the business case.
Homes or change initiatives delivered on time.
Projects executed on budget.
Relationships
Effective working relationships are also critical to the success of large-scale projects. Management tactics based on a matrix structure ensure that functional and operational resources are aligned across the business. This approach results in significant advantages, as it enables effective and responsive participation from different parts of the organisation that have specialist expertise. In Jones’ matrix, people from different parts of the business took a lead role in managing a specific work stream and were known as Work Stream Leaders. Jones also adopted the RACI technique for identifying functional areas, key activities and decision points where ambiguities exist.
Project Lifecycle
The management of any large, complex project is made easier when broken down into more manageable chunks. This unique approach to the project’s lifecycle enabled Jones’ to establish clear controls, e.g. review points, or gateways, at which to consider progress before moving on to the next phase. The Care UK project lifecycle methodology consisted of five distinct stages, with each stage considered as a sequence, providing the structure and approach to progressively deliver the required outputs.
Risk and issue management
Focusing on critical risk issues helps programme managers mitigate threats. Regularly planning and leading benefit reviews helps organizations drive success and ensure that profits aren’t eaten up by largely avoidable risks. For example, a slight reduction to a home’s expected average weekly fee (AWF) – although based on a more up-to-date market analysis – could have a detrimental effect on the bottom line. However, if this market analysis re-evaluation were to take place at the pre-planning stages, then the organization has an opportunity to review down spec. Key decisions like these must be managed with due diligence and care, by referring to the original business case and using a clearly defined change-control process, and then directing such matters to the programme board for approval.
Recommendations
Programme managers embarking on a scalability journey should note that before diving into the planning of a system of methodologies and processes, it’s important to first understand what needs to be fixed. Jones began his appointment at Care UK by working with a small team. They spent time getting into the nitty gritty of launching care homes, reviewing checklists, liaising with the Care Quality Commissions (CQC), and understanding the business and identifying gaps. Only then did he present the findings and gain support for the project’s Blueprint. Managers also need to understand the organisational culture in which they operate, and then adapt their approach accordingly. Finally, gaining senior management trust is another critical step, as approval and support helps form links throughout the organization – including the lower-management levels.
Successful organizations need managers with a breadth of knowledge – not necessarily construction management expertise – to successfully drive the outcomes of the project. They also require some understanding of IT systems, staff, marketing strategy and more. Only then will the organisation reap the strategic benefits of higher management-level expertise. With the right approach to project management and creating repeatable systems, care home organizations can seize market conditions and drive growth, while delivering quality outcomes through scalable building blocks.
As people in the UK live longer, demand for residential care and nursing homes is growing, as are our expectations of the standard of living they will provide. Dean Jones offers insights about the value a professional consultancy has for overcoming the challenge and driving value for patients.
The current state of affairs
As a result of some well-broadcasted care scandals that attracted extensive, and in some cases, damaging media attention, the government has responded with cuts that are impacting local authority (LA) fees and resulting in far tougher Care Quality Commission (CQC) policies.
Office for National Statistics (ONS) Projects That by 2035 There Will Be 3.5 Million Uk Residents Aged 85 and Older, Compared to Only 1.4 Million Currently
In spite of this, the “extra-care” – or Residential Elderly Care (REC) sector – continues to overcome these challenges, attracting new investments, particularly into new-build care homes. These are specially designed, owner-occupied, self-contained housing, often with round-the-clock support and meals and sometimes with nursing assistance.
A typical pattern is for owner-founded care home operators to reach a growth limit, based on the founder’s management capacity, access to capital and appetite for risk. They cease to invest in new capacity and don’t benefit from economies of scale which can be passed on to commissioners. Public markets typically do not fulfil their function as a supplier of capital in the case of healthcare services, because they generally demand relatively modest gearing.
There’s a widely recognised need across all health and social care market segments for innovation and system change, as well as capital investment in new services. A private equity investor is well placed to leverage technical services to strategically programme and project-manage Residential Elderly Care (REC) public real estate schemes across their entire lifecycle.
Supply and demand challenges
Today, professional healthcare businesses and registered social landlords (RSLs) are the main providers of new capacity, period. Since 2008, private and voluntary status providers, who service 92 percent of all Residential Elderly Care, have reported an upswing in demand and occupancy. Paradoxically, as adult social care budgets are decreasing and the provision of residential care by the NHS and local authorities has shrunk, the number of UK people who require help and support is rapidly increasing.
The Increasingly Ageing Population of the Uk Appears to Be Underpinning the Overall Rise in Rec Capacity and Occupancy
While Local Authorities (Las) are seeking to divert placements to inexpensive non-residential/domiciliary-based alternatives, the increasingly ageing population of the UK appears to be underpinning the overall rise in REC capacity and occupancy. Britons are living longer than ever. The Office for National Statistics (ONS) projects that by 2035 there will be 3.5 million UK residents aged 85 and older, compared to only 1.4 million currently. The cost of caring for these residents is also forecasted to increase. For example, caring for a person with dementia will increase to $1,142,677 by 2025 and $2,092,945 by 2051. In total the government estimates that 1.7 million more adults will require some type of care and support over the coming decades.
As a result, the current number of nursing and residential care homes in the UK (over 381,000) will need to almost double over the next 20 years to cope with rising numbers of people aged 85 or more.
A bright future?
The demand for care will continue to rise as a result of life expectancy increasing and ageing. A robust REC independent sector arises primarily from the net increase in residential demand, and more recently, improved occupancy. These are the result of a number of competing forces:
Demographics, with the ageing population expected to drive the demand for health and social care.
Outsourcing, the long-term transfer of residents from LA homes to independent care homes.
Severe financial constraints, at least over the next five years, as the government – which pays for the bulk of health, social care and special education – seeks to eradicate the public expenditure deficit and restrict new builds.
Outdated assets, or older care homes that no longer meet needs.
Consolidation, a trend within segments of the independent sector.
Maturity, against a currently immature healthcare market.
Efficiency, highlighted by the “Nicholson challenge” for the NHS to make £15 to £20 billion in efficiency savings between 2011 and 2014. (It costs the NHS approximately £3,000 a week to care for elderly patients with no clinical need to be in a hospital ward. By contrast, it comes to about £1,000 per week for a residential care home provider.)
Demand and Occupancy. Unless the supply of new builds increases (currently by approx. 7,500 beds p.a.), it’s possible that some regions may see bed shortages, driving up LA fees.
New Technology. Progressive management capabilities in leveraging technology and strategic collaboration will constitute the formula for success and sustainability in the new healthcare business environment.
While a longer life is welcome news for millions of Britons, it could ironically trigger a public service meltdown as our national health system is stretched to its breaking point. Local authorities and NHS trusts retain a significant role in delivering services, with 75 percent of nursing home places funded by the public sector. There exist ever-increasing opportunities for private care providers to take some of the strain from NHS and ease bed-blocking by caring for patients, mostly elderly, in a residential setting when there is no clinical need to be in a hospital ward.
The REC Sector Could Potentially save the Nhs Billions of Pounds.
A combined approach to health and social care and some innovation is required for this savings to become a reality. In addition, Care Home Operators have a unique opportunity to grow their businesses and benefit from economies of scale, leveraging the expertise and resources of a professional consultancy. In doing so, they’ll have necessary resources and systems to bid for significant re-provision of services tendered by local authorities.
About Dean Jones
Dean is an Associate in AECOM’s Programme Leadership Practice. Dean joined AECOM from Care UK, the UK’s largest independent provider of health and social care, where he was a Programme Manager and delivered a £250m investment growth programme over 2012/15 which increased Care Uk’s number of homes circa 33%. Dean was also Programme Manager for a £60m Suffolk programme to build ten new care homes and ten day clubs, bringing much needed additional nursing and specialist dementia care to the Suffolk community.
Traditional bathroom pods have a range of superstructure options including concrete and GRP. They are not usually integrated into the structure and are either craned or slid into place after construction. Typically, this involves redundancy in terms of floors and walls but this can be avoided by using structural pods. Traditional pods usually have a separate procurement process and when used in hotels and student accommodation have very defined service zones.
Beaufort Court consists of 65 houses and flats arranged in three blocks around a communal area. There are 19 shared ownership flats, which sell at £115,230 (2003 prices). The remaining houses and flats are social housing, key worker housing and part of a rough sleeper initiative. It was designed as a model of affordable housing. It is high density, energy efficient, and innovative in construction. Plans are generous, elevations are elegant, and excellent communal and parking facilities are provided. A light-guage steel panel system forms the main superstructure of the six-storey accommodation with an externally expressed hot rolled steel structure for the lift shafts and supporting the balconies. Lillee Road is the first UK housing project to use structural bathroom pods within such a framing system. They were chosen primarily because of the very tight spatial constraints of the building.
