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This guideline is to be used in the early stages of capital planning for new hospital projects and the redevelopment of existing hospitals to assist in determining the initial scope, area and budget.

The guideline sets out the method and benchmarks to be used. The method as set out does not replace good health service planning, or over-ride site-specific project planning principles and requirements. The benchmarks do not indicate minimum or maximum standards and are not intended to be prescriptive.

The guideline can also be used to test functional and spatial requirements and costs specified for projects against overall benchmarking expectations.

Aim of the guideline

The aim of this guideline is to:

  • establish a link between services and the physical infrastructure required to deliver those services
  • provide a clear and consistent method for the early planning and scoping of hospital capital projects
  • set out formats for the presentation of data required in the planning of hospital capital projects
  • provide functional benchmarks, area benchmarks and cost benchmarks to be used in early planning of Victorian public hospitals that reflect the different level of complexity of services they provide.


The primary drivers for the development of this guideline are:

  • a Department of Health and Human Services commitment to a more rigorous regime for project planning
  • a shift in Victorian Government focus from individual projects to strategic asset management and planning activities across portfolios.

Government asset management policy

The government’s policy statement Sustaining Our Assets sets out the government’s commitment to maintaining a flexible portfolio of assets to enable services to be delivered effectively to the community and to provide a foundation for economic growth. Sustaining Our Assets provides a high-level policy framework for the Victorian public sector and provides the foundation of all asset management related activities, such as planning, evaluation, acquisition, operation and the ultimate retirement of an asset.

The policy identifies the principles for effective asset management as: 

  • Service delivery needs form the basis of all asset management practices and decisions.
  • Asset planning and management is integrated into corporate and business plans, and budgetary and evaluation processes, e.g.:
    • Asset management decisions are based on evaluation of all alternatives (including non-asset alternatives) that take into account all costs incurred throughout the life cycle of the assets, from acquisition to disposal, and related benefits and risks.
    • Asset management decisions are responsive to performance measurement and monitoring. Accountability for service delivery, and accountability for asset management go hand in hand.
    • Ownership, control, accountability and reporting requirements for assets are established, clearly communicated and implemented.
    • Reporting requirements include timely and meaningful information.
    • Evaluation of the contribution of asset management to meet departmental objectives forms part of performance management.
    • Asset registers are maintained at a level that meets government and management decision-making requirements.

The policy is underpinned by detailed guidance material to assist with the practical application of its features, through the asset management series. The series provides the asset policies and practices to assist in the ongoing implementation of asset management.

Department of Health and Human Services

The department’s core objective is to achieve the best health and wellbeing for all Victorians. This is accomplished through planning, policy development, funding and regulation of health service providers and activities which promote and protect Victorians’ health, including:

  • health care services provided through the public hospital system, community health services, ambulance services, dental services and public mental health, drug and alcohol services
  • residential and community care for older people, support and assistance to enable people to function independently in their own homes, positive ageing programs, healthy and active living and seniors card
  • health promotion and protection through emergency management, public health and related preventative services, education and regulation.

Infrastructure Planning and Delivery (IPD) branch

Efficient and safe delivery of health services is dependent on the availability of appropriate physical facilities. IPD is responsible for strategic asset management of the department’s physical assets (other than those managed by the Office of Housing) and for the procurement of new or refurbished facilities required to meet specific service needs.

At the portfolio level, IPD:

  • manages the planning cycle for the department's asset investment program, including preparation of asset investment bids as part of the annual government budget processes
  • develops, maintains and monitors standards for departmental capital planning and asset management
  • provides expert advice concerning benchmarks for capital facilities
  • monitors and reports on the department’s capital budget, including required reporting to government and central agencies
  • maintains core information regarding assets owned or managed by the department to support strategic planning and reporting on assets in accordance with statutory and other reporting requirements
  • develops strategies for the implementation of government policies effecting assets
  • Manages acquisition and disposal of property, crown land disposals and property and crown land leasing requirements.

At the individual project level, IPD works with the department's program areas to:

  • plan and procure capital projects to meet defined service needs
  • provide expert advice concerning design and planning standards and benchmarks for capital facilities
  • provide technical advice on infrastructure issues presenting risks to business continuity.

Specific projects undertaken by IPD in the last two years, in response to the government’s asset management policy directions outlined in sustaining our assets, include:

  • Victorian A1 and A2 hospitals: building condition and infrastructure condition audit report (December 2000)
  • health and residential aged care facilities fabric survey (2001)
  • asset investment modelling.

The outcome of these projects has been the compilation of a comprehensive information base concerning the physical condition, functional suitability and replacement requirements of existing facilities that will inform the department’s strategic asset planning.

This guideline further responds to government requirements in relation to asset management by setting out a revised process for capital planning of hospital projects.

Hospital benchmarking study

The revised process for capital planning of hospital projects was developed as a component of a hospital benchmarking guideline study undertaken in 2002.

A working party comprised of IPD, and program areas of the Department of Health and Human Services developed draft hospital benchmarks relating service requirements, function, area and cost for Victorian hospitals and produced a pilot model for linking the physical scope and cost of an asset investment with prescribed service requirements.

A team of external consultants was then engaged to undertake a detailed study to:

  • establish a clear and consistent methodology for the early planning and scoping of hospital projects
  • develop appropriate formats and procedures for hospital project planning
  • confirm the service, functional, area and cost benchmarks for Victorian hospitals appropriate to the level of complexity of services provided
  • set a micro-planning regime that translates effectively to a strategic planning methodology for Victorian hospital projects
  • provide a guideline document consistent with service planning guidelines, IPD planning and development guidelines, department protocols and state government policies.

The consultant team reviewed ‘best practice’ guideline material on hospital facility planning and reviewed a number of recent hospital capital projects to develop the process and benchmarks set out in this document.

The process set out:

  • clearly establishes links between service requirements and physical requirements
  • provides a robust methodology and standard approach for setting the scope and cost of hospital capital projects
  • supports strategic asset management and decision-making on strategic planning issues, the annual Asset Investment Program and individual capital projects.

This process is to be followed when planning all hospital capital projects.


The benchmarks used in this document provide initial estimates for proposed hospital facilities and assist with detailed planning of individual projects. The benchmarks are not intended to be prescriptive and users should be aware that individual project requirements might require variations to the benchmarks.

The functional benchmarks set out in this guideline are derived from best practice service delivery and from recent hospital project experience.

The area benchmarks and cost benchmarks provided are regarded as reasonable targets for the design team to aim for. They are based on first principle calculations and therefore in many instances do not reflect historical data.