Can the vast NHS estate be transformed to deliver vital health reforms and funding? It will be critical to ensure new investment projects are aligned with longer term local strategy and the wider regional need

Reforming the health service and driving improved care for patients were promises made by all parties in the general election. In the immediate aftermath, the new government will be expected to deliver on those promises quickly – notably in the form of:

  • increased funds to maintain existing services; and
  • capital investment for new projects and partnerships that will enable the health service to better meet changing clinical needs.

Now there is an urgent challenge to accelerate programmes aimed at sorting out the vast and ageing NHS estate, and make it fit for purpose. NHS chief executive Simon Stevens wants to “redeploy” £7.5bn in surplus land and property, and use that money to invest in new care models.

‘The DH has identified more than 350 surplus NHS site that could realise capital receipts’

In total, the Department of Health has identified more than 350 surplus NHS sites, ranging from small parcels of land to large hospital sites, that could realise capital receipts. But making all this “happen” will require some strong leadership that can cut through the clutter.

Even now, some of the documentation process of grading and surveying the estate is still a work in progress.

Local vs national agenda

There is an inbuilt tension: has the drive towards more local provision of services hindered efforts to develop a coherent regional and national estates strategy based on an assessment of the wider need?

Some commentators complain that many NHS organisations still follow their own local agenda and are resistant to collaboration.

NHS England is widely supportive of a national and regional estate strategy across the portfolio of properties, but has faced criticism that the NHS Five Year Forward View doesn’t properly address the impact its changes would have on the estate. Instead it would be mostly left to individual trusts to decide how to react.

Despite having a portfolio worth £3bn, NHS Property Services manages and maintains only 10 per cent of the total NHS estate – the vast majority of NHS property assets remain in the hands of locally based trusts and other NHS bodies.

In the past getting approval for new projects has in the past been time consuming and bureaucratic, although this has improved.

‘CCGs still need overall NHS England approval before they start spending’

The buy-in of multiple local stakeholders is also required, and this only adds to potential delays. Although clinical commissioning groups have been given cash to follow their priorities, they still need overall NHS England approval before they can start spending.

An added factor is the model of tariffs, with CCGs paying NHS trusts for the number of operations, rather than the quality of the premises where the procedures were carried out; this does not encourage full use of space in premises.

CCGs have also voiced concerns that they are paying for the cost of empty space in newly built but underused clinical buildings where new leases have not been agreed.

Building on progress

Elaine Hewitt, now four months into her role as chief executive of NHS Property Services, says she will build on the good progress that has been made already, underpinning the role as a strategic estate, asset and facilities specialist, as well as modernising and buying new facilities.

‘NHS Property Services has delivered 50 new developments generating “significant” savings’

The company has delivered 50 new developments and released land for 2,396 homes generating “significant” savings for the NHS.

There are already significant examples of improvements to estates, with the launch of 29 vanguard sites, where primary and acute care systems are integrated.

The aims are:

  • fewer trips to hospitals, with cancer and dementia specialists holding clinics in local surgeries; and
  • having one point of call for family doctors, community nurses, social and mental health services, or access to blood tests, dialysis or even chemotherapy closer to home.

Trusts understandably want to concentrate on their core business of providing care – and invariably turn to outside property management and development skills to help them.

Private sector

Augmenting with additional capacity and capability from the private sector is attractive to a growing number of trusts. The message is that new models being proposed are genuine partnerships, not private finance initiative contracts, which, for many trusts, proved to be a bad experience.

So with such a significant challenge now facing the NHS and a requirement to deploy £7.5bn, the question is: can the NHS do this without the help of the private sector?

‘It will be critical to ensure new investment projects are aligned with longer term local strategy’

Strategic estate partnerships provide expertise and innovation. Examples include commerciality in ensuring best value from estate services delivery and supply chains, and third party income or capital receipts in respect of any surplus land.

Some trusts that do not have the benefit of existing local improvement finance trusts, are now carrying out soft market testing with partnership providers. Unlike a rigid PFI, procuring an estate partner doesn’t commit a trust to a huge amount of money or force them to adopt a different strategy.

A fast growing patient population and levels of demand, changing models of care, new technology and a lack of capital to invest now mean there is a fresh sense of urgency within NHS estates. So, in the years ahead, it will be critical to ensure new investment projects are aligned with longer term local strategy, as well as the wider regional need.

The risk remains that estate models driven independently lose the potential to make savings and efficiencies by avoiding duplication and waste which ultimately affects the quality of care for patients.

Rob Harrison is a partner at the public services law firm Bevan Brittan

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