Greater Manchester eyes 52 NHS sites for 1,700 new homes

Housing target

Higher levels of capital investment have been promised for the NHS, but there are still big decisions to be made about the sources of funding and the way it gets distributed.

One factor to be taken into account when the Department of Health and Social Care allocates the cash is whether or not a local area has made the most of its existing assets.

There are clearly opportunities to sell off NHS land – particularly in affluent London boroughs – to generate huge capital receipts which can then be reinvested.

Opportunities in the regions will be far more limited, but every sustainability and transformation partnership is still expected to maximise their land sales if they want access to central public funding.

In Greater Manchester, 52 sites have now been identified for possible disposal through a review of the region’s estates.

According to the review, the sites cover around 30 hectares and offer the potential for almost 1,700 new housing units. Assuming planning permissions are granted, the land values are estimated to be around £38m.

The NHS is not renowned for its speed in conducting land sales (and similar one off projects), so it will be interesting to see how many of the 52 sites have actually been flogged in five years’ time.

The region’s devolution team, which has led the review, reckons it can’t publish the list of sites due to “commercial considerations”.

According to 2017-18 data held by NHS Digital, Manchester University Foundation Trust has a large site called High Elms on Upper Park Road which has potential for around 180 homes (a buyer has been lined up already), with another big site listed next to Leigh Infirmary, run by Wrightington, Wigan and Leigh FT.

I’m told there is likely to be surplus land available at Bolton Hospital (to the left of the main entrance) and North Manchester General Hospital (once its services have been redesigned), but that’s just a few of the 30 hectares accounted for. Do get in touch if you know where the others are likely to be.

Off balance

The chancellor announced the death of the private finance initiative in the budget last month, but this does not mean the end of private sector investment in NHS estates.

It simply means that different types of public-private partnership will need to be pursued, including in Greater Manchester.

However, privately funded schemes (or indeed schemes funded through local authority investment) will depend largely on whether they score against the national spending limit for capital projects, known as CDEL.

In the past it’s been possible to keep new schemes “off balance sheet” so they don’t hit CDEL (and the national debt figures). But this has (in many people’s view, rightly) been made more difficult under new accounting rules.

The estates’ review document suggests Greater Manchester is hoping the Treasury will be more relaxed about off balance sheet schemes. But judging by the experience of Jim Mackey while at NHS Improvement, they could be waiting a long time for any clarity.

Waiting Together

Getting hold of more straightforward capital funding from the DHSC isn’t going to be much easier. Leaders in GM are still pulling their hair out over the time it’s taking to secure capital for the long awaited reconfiguration of emergency general surgery.

It’s now six years since the Healthier Together process started, and more than three years since the decision was made to consolidate services to four sites to “save 300 lives every year”.

A business case was submitted in May 2017 and supported by national bodies, but the approval process was so drawn out that it had to be rewritten and resubmitted last month to include up to date activity and financial data.

It’s now hoped that the resubmission can progress through NHS Improvement’s regional team, NHSI’s Taunton team, NHSI’s London team, the DHSC, and the Treasury, in time for the capital to be drawn down in early 2019. 

Empty

A couple of years ago I spoke to excited bosses at Trafford Clinical Commissioning Group about a new health centre being funded through private investment in Altrincham town centre.

The facility, which is now complete, has been built via a £35m financing arrangement – known as an “income strip lease” – with development firm Citybranch sourcing the investment from Canada Life.

The 30 year lease is held by NHS Property Services, but Trafford CCG is on the hook for paying the annual rent of £1.3m.

But it emerged last month three GP practices and various community services run by Greater Manchester Mental Health FT and Pennine Care FT, which had been due to move in, had pulled out due to concerns about rental payment they were expected to pay the CCG.

So the building has been completed, but lies largely empty and the CCG (now under new leadership) is desperately trying to strike a deal with the providers. Without a deal, the CCG may need to spend £7m to convert the building into office space to be rented out.

In other words, it’s a mess.

The region’s devolution team has commissioned an independent review which will surely ask some difficult questions about the CCG’s governance and assurance processes under former accountable officer Nigel Guest, and former chief operating officer Gina Lawrence.