You are required to prepare a report using the information provided above covering the following areas: a) Prepare a spreadsheet model forecasting the impact over the next five years of the mental health unit proposal set out above. Critically evaluate the proposal by using investment appraisal techniques. b) Revise the proposal in (a) and provide innovative ways to reduce expenses and improve financial budgeting. c) Assume that the proposal in section (a) will be accepted as it is. Evaluate the sources of finance to obtain funding for the proposal.

Please read the following scenario: You are a financial analyst who works for St Mary's Hospital. You have been told that the hospital plans to utilise Lindo Wing as a mental health care unit for NHS health and care staff starting in June 2022. Given that senior level staff are still engaged with Covid-19 on a daily basis, they were only able to put up a preliminary budget and cost plan for the unit. You have been asked to consolidate and analyse the plan, perform financial forecasting and come up with innovative ways to reduce expenses and improve financial performance. Your report should include an appraisal of the proposed project; effective ways of obtaining funding for the project, if necessary; and a recommendation to the hospital on whether it is a viable plan. Background According to a report prepared by The King's Fund, an independent think tank in England, along with cancer and heart disease, the government designated mental health as one of its three clinical priorities in 1999. It created a National Service Framework for Mental Health and appointed a National Director for Mental Health to oversee its implementation. It is suggested in the report that the direct costs of mental health are over 20 billion a year in England. This figure includes spending on health and social care services as well as a range of other agencies, but excludes the indirect costs of the impact on the criminal justice system and in lost employment. As a result of Covid-19 pandemic, mental health has gained even more attention. The pandemic has been taking its toll not just on the public's mental health but also on NHS workers. A study, published in the British Journal of Psychiatry Open, surveyed nearly 3000 NHS staff and found that the respondents reported a high level of anxiety, depression, severe stress and PTSD symptoms. Various health and care organisations suggest that the physical and emotional well-being of health and care staff should be a top priority, like that of patients, and more actions should be taken. St Mary's Hospital is considering opening a mental health unit in Lindo Wing that will serve exclusively health and care workers in England. It will be regarded a five-year pilot project at first and will be re-evaluated after five years in terms of costs and benefits. The hospital believes that health care professionals' mental health has a direct impact on their capacity to fully serve their patients, their relationships with other members of staff and on costs. It is commonly recognised that mental health issues such as stress and burnout among health care professionals raises costs due to increased medical errors, decreased quality of patient care, low productivity and absenteeism. Therefore, it is aimed that the unit will improve the mental health of the NHS staff, enhance patient experience and increase the quality of care at lower costs. It is estimated that the overall costs will be reduced by 1.5 million pa from year 2 onward. The hospital plans to allocate a budget of 2 million for the mental health unit. The unit will offer treatments for stress, burnout, panic attack, anxiety, depression and PTSD over the next five years. As a matter of prevention, the unit will also provide nutritional, digestive and immune diagnostic tests to determine in-patient health and care professionals' specific needs. The unit will also invest in artificial neural network (ANN) model as a useful tool for diagnostics of depression from audio during interviews with patients. Virtual Reality (VR) will be used in mental health and psychological therapies to provide treatments for mental health disorders. A PC will be bought to run the software. These techniques have been found to be both treatment and cost effective. No additional capital expenditure is needed, as the existing fixed assets will be utilised. It is estimated that 4000 health and care professionals a year will benefit from the service. Every day, about 15-20 NHS professionals are expected to visit the mental health unit, with 10% of them being admitted as in-patients. The unit will be open 5 days a week. Data file Training of neural network model: 250,000 VR headsets: 600 (X 10 units) PC: 1,000 (x2) Staff training costs on ANN and VR technologies: 600 (x5) Medical and Clinical Director: 75,000 pa (x1) Clinical Operations Manager: 50,000 pa (x 1) Consultant Psychiatrist: 90,000 pa (x 2) Consultant Clinical Psychologist: 48,000 pa (x 5) Mindfulness Coach: 40,000 pa (x2) Functional Nutrition & Dietician: 35,000 pa (x 1) Mental health nurses: 40,000 pa (x 5) Medical assistants: 23,000 pa (x 5) Admin and clerical staff: 19,000 pa (x 3) Overtime costs: 56,000 pa Total average cost in-patient care (inc. diagnostic tests): 450 per day (x2) Total average cost outpatient (ambulatory) care: 540 per day (30 per patient x 18) Other ongoing costs: 85,000 pa Increase in salaries and ongoing costs: 1% in year 2 onward Increase in average cost per in-patient and outpatient: 2% in year 2 onward Required rate of return: 8% Please read the following scenario: You are a financial analyst who works for St Mary's Hospital. You have been told that the hospital plans to utilise Lindo Wing as a mental health care unit for NHS health and care staff starting in June 2022. Given that senior level staff are still engaged with Covid-19 on a daily basis, they were only able to put up a preliminary budget and cost plan for the unit. You have been asked to consolidate and analyse the plan, perform financial forecasting and come up with innovative ways to reduce expenses and improve financial performance. Your report should include an appraisal of the proposed project; effective ways of obtaining funding for the project, if necessary; and a recommendation to the hospital on whether it is a viable plan. Background According to a report prepared by The King's Fund, an independent think tank in England, along with cancer and heart disease, the government designated mental health as one of its three clinical priorities in 1999. It created a National Service Framework for Mental Health and appointed a National Director for Mental Health to oversee its implementation. It is suggested in the report that the direct costs of mental health are over 20 billion a year in England. This figure includes spending on health and social care services as well as a range of other agencies, but excludes the indirect costs of the impact on the criminal justice system and in lost employment. As a result of Covid-19 pandemic, mental health has gained even more attention. The pandemic has been taking its toll not just on the public's mental health but also on NHS workers. A study, published in the British Journal of Psychiatry Open, surveyed nearly 3000 NHS staff and found that the respondents reported a high level of anxiety, depression, severe stress and PTSD symptoms. Various health and care organisations suggest that the physical and emotional well-being of health and care staff should be a top priority, like that of patients, and more actions should be taken. St Mary's Hospital is considering opening a mental health unit in Lindo Wing that will serve exclusively health and care workers in England. It will be regarded a five-year pilot project at first and will be re-evaluated after five years in terms of costs and benefits. The hospital believes that health care professionals' mental health has a direct impact on their capacity to fully serve their patients, their relationships with other members of staff and on costs. It is commonly recognised that mental health issues such as stress and burnout among health care professionals raises costs due to increased medical errors, decreased quality of patient care, low productivity and absenteeism. Therefore, it is aimed that the unit will improve the mental health of the NHS staff, enhance patient experience and increase the quality of care at lower costs. It is estimated that the overall costs will be reduced by 1.5 million pa from year 2 onward. The hospital plans to allocate a budget of 2 million for the mental health unit. The unit will offer treatments for stress, burnout, panic attack, anxiety, depression and PTSD over the next five years. As a matter of prevention, the unit will also provide nutritional, digestive and immune diagnostic tests to determine in-patient health and care professionals' specific needs. The unit will also invest in artificial neural network (ANN) model as a useful tool for diagnostics of depression from audio during interviews with patients. Virtual Reality (VR) will be used in mental health and psychological therapies to provide treatments for mental health disorders. A PC will be bought to run the software. These techniques have been found to be both treatment and cost effective. No additional capital expenditure is needed, as the existing fixed assets will be utilised. It is estimated that 4000 health and care professionals a year will benefit from the service. Every day, about 15-20 NHS professionals are expected to visit the mental health unit, with 10% of them being admitted as in-patients. The unit will be open 5 days a week. Data file Training of neural network model: 250,000 VR headsets: 600 (X 10 units) PC: 1,000 (x2) Staff training costs on ANN and VR technologies: 600 (x5) Medical and Clinical Director: 75,000 pa (x1) Clinical Operations Manager: 50,000 pa (x 1) Consultant Psychiatrist: 90,000 pa (x 2) Consultant Clinical Psychologist: 48,000 pa (x 5) Mindfulness Coach: 40,000 pa (x2) Functional Nutrition & Dietician: 35,000 pa (x 1) Mental health nurses: 40,000 pa (x 5) Medical assistants: 23,000 pa (x 5) Admin and clerical staff: 19,000 pa (x 3) Overtime costs: 56,000 pa Total average cost in-patient care (inc. diagnostic tests): 450 per day (x2) Total average cost outpatient (ambulatory) care: 540 per day (30 per patient x 18) Other ongoing costs: 85,000 pa Increase in salaries and ongoing costs: 1% in year 2 onward Increase in average cost per in-patient and outpatient: 2% in year 2 onward Required rate of return: 8%