Estate of the nation – an HSJ special report

It is a given that the NHS needs to redesign the way services are delivered, both to provide the integrated care that patients want and for the service to remain sustainable. That care has to take place somewhere – and a lot of it is probably not where it is currently located.

With this in mind, what is the role of estates and facilities management in service redesign? This was explored at a recent HSJ webinar by an expert panel that included Tim Kempster, director of strategy at NHS Property Services; Caspar Ridley, national director, health at Interserve – one of the world’s foremost support services and construction companies; and Trevor Payne, director of estates and facilities at Barts Health Trust, the largest healthcare trust in the NHS.

Overlooked importance

The starting point for many in this debate was that NHS estates and facilities management has not, thus far, been closely engaged in service redesign. But given the scale of the challenge facing the NHS and the amounts invested in owning, managing and maintaining the vast estate, it certainly should be.

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A King’s Fund report, published in July 2013 as part of the think tank’s Time to Think Differently programme, made the case for rethinking how the NHS uses its estate. It said: “There has been little real attention given to how this huge resource could help to improve efficiency, move more care out of hospitals and exploit new technologies. Models of care are still designed around buildings, but could rethinking the way that the NHS uses its estate catalyse change?”

Over three-quarters of our webinar audience agreed with this statement; no one disagreed and the remainder said they did not know.

The King’s Fund’s report, NHS Buildings: Opportunity or Obstacle, went on to say that estates and facilities management had not been enabled to help make this change. The NHS estates management function has been largely concerned with the maintenance and operation of buildings, it said, and there has been little development of more entrepreneurial property management skills.

Building utilisation is often not actively managed.

“There is very limited property expertise within the organisation, with the result that the NHS has been severely criticised in the past for failing to achieve an appropriate return on land sales and other property transactions,” it said.

Our audience was slightly at odds with the first half of this indictment. Just under half said that estates and facilities management in their organisation was involved in service redesign from an early stage; another third said it was involved as an afterthought. Just one in five said estates and facilities management was concerned only with operations and maintenance.

Commercial nous

Regarding the second part of the King’s Fund indictment, Mr Kempster at NHS Property Services is charged with bringing that commercial rigour to what is now a large property portfolio. The company was created in April 2013 to take over the property functions of the old primary care trusts and strategic health authorities.

‘We have a mixed estate. Some of it is extremely good but some is inadequate, underused or redundant’

“The issue we have as we move forward is that we have a mixed estate,” he said. “Some of it is extremely good but some is inadequate, underused or redundant.”

The challenge, in an era of financial austerity and with an ageing population, was to understand its value and how it might be better used.

“As an organisation, NHS Property Services can provide some leadership,” he said.

“We can deliver efficiencies of scale in management and we can do some very specific things in relation to property, such as making sure redundant property is disposed of and the money realised from that is returned to the system as a whole.

“But we cannot just go down the traditional route of a property company or a facilities services delivery company. We need to be an active participant in developing the future of healthcare delivery.”

Nor can it work alone. “The expertise in property sits within our gift,” he said. “The expertise in developing new models of service delivery sits outside. Therefore, we have to work in partnership to get the right answers and provide an estate or environment in which services can be more efficiently delivered.”

‘We have to work in partnership to get the right answers and provide an estate or environment in which services can be more efficiently delivered’

That means working not just with the NHS but also with the third sector and private sector to consider, for example, more co-location of community services that provide better value for the NHS and which meet patient expectations.

Mr Ridley made similar observations about the need for partnership working to get better value out of the estate. He recently joined Interserve having worked in the NHS at executive and chief executive level in two foundation trusts, so he has a wider perspective.

YouGov research carried out earlier this year for Interserve highlighted how NHS organisations expect cuts to frontline services as they strive to meet efficiency targets in coming years – and that many have no strategy for avoiding such cuts. “I would argue that property and estates will be fundamental in helping achieve efficiencies,” he commented.

Saving while investing

Interserve’s experience with a number of NHS organisations is that it is possible to save money while investing in service delivery. Sure, he said, there are “no quick and easy answers” but there are ways of doing it.

One example is a recently completed patient hotel now operating at University College London Hospitals Foundation Trust, funded by UCLH Charity and managed by Interserve.

UCLH had already pioneered ambulatory care for cancer patients undergoing chemotherapy and other tests and treatments, who needed to visit the hospital daily over a period but did not need to stay overnight. Under this model, patients could stay at a nearby hotel free of charge, rather than occupy a hospital bed, which is more convenient for the patient and cost effective for the hospital.

The 35-bed, four-star boutique hotel – the first of its kind in the NHS and opened in September 2012 – drives this cost efficiency even further to one third of the commercial hotel room rate.

As Mr Ridley said: “The future of facilities management is about patient care and patient experience.”

‘The future of facilities management is about patient care and patient experience’

Another approach being pioneered by Interserve is extending estates and facilities management across more than one organisation. The company recently reached an agreement with Leicestershire’s health economy to provide estates and facilities management services under a single contract. A joint entity, NHS Horizons, has been set up to manage it.

The contract took 18 months to develop and covers catering, cleaning, portering, helpdesk, building maintenance, car parking and more. It will help the NHS across the county not only to save money through economies of scale but to standardise and industrialise approaches, provide consistency and to think strategically about the future of over 500 buildings now in use – some of them great, some of them underutilised and some of them redundant.

It is early days – the joint contract was signed earlier this year with the acute University Hospitals of Leicester Trust, the mental health provider Leicestershire Partnership NHS Trust and clinical commissioning groups - but the projected savings from taking out 20 per cent of the estate not in current use and over 20 per cent efficiencies in providing facilities management will soon mount up.

Huge gains

“We expect it to save £100m,” said Mr Ridley. “It will reduce occupancy by 20 per cent and improve skills in procurement. It is a huge step, but where people are taking this kind of approach, we are seeing savings.”

Mr Payne also emphasised the importance of firstly understanding the property portfolio and then developing a single, standard service specification for the portfolio of estates and facilities services, as a route to delivering efficiencies.

Barts Health, created from the merger of three large acute hospital trusts and some associated community services, has 578,000m2 floor space across six hospitals. It has both the oldest hospital and the newest in its portfolio and is, in some ways, “a micro version of the NHS”, he said.

“If an approach works for us, it might well work for the rest of the NHS,” he added. “We are working through a process of trying to understand how we might reconcile current use, physical condition and consolidate that property.”

‘If an approach works for us, it might well work for the rest of the NHS’

In taking the standardisation approach, he said: “We are following a model similar to Leicestershire – seeing property as an enabler.”

What, then, are the “low-hanging fruit” when it comes to delivering efficiencies through including estates and facilities management in service redesign? For Mr Payne, it is about understanding what property you have and how you use it over a 24/7 period, and overlaying this with the risk around the maintenance backlog and physical condition of the estate.

He asked: “Which buildings do we have, which do we want to continue using in the future, which buildings do we need to move out of due to risk, location, condition, clinical functionality or efficiency and which do we want to invest in?”

With this understanding, estates can define the way forward. “Estates should not be driving clinical strategy – we are here to wrap buildings around the delivery of healthcare in the most appropriate location,” he said. “We need a platform for understanding and making smart decisions.”

Best practice

For Mr Ridley, the low-hanging fruit involved sharing best practice and having the courage to break traditional boundaries. “It’s hard but it can be done. It requires visible leadership,” he said.

‘We have to consolidate estates wherever we can and look for opportunities to see that the right part of the estate is utilised’

Should NHS Property Services be providing this leadership? “We have to work in partnership,” emphasised Mr Kempster. “We have to consolidate estates wherever we can and look for opportunities to see that the right part of the estate is utilised. If facilities are out there that are underutilised or could be better exploited, we should look at the potential for freeing up revenue or capital.”

He felt there was significant opportunity for reconfiguring the estate. “We have to look at how the estate is utilised and how services are provided and whether we are ultimately looking at a smaller estate that is provided more flexibly,” he said.

The audience asked for examples of estates being shared by more than one provider, to which Mr Ridley pointed to an approach being developed in Leicester under a shared contract. Beyond this, examples included GPs in emergency departments or home healthcare services entering hospital wards to smooth the hospital-to-home transition.

More needs to be done to share good practice and systemise innovative approaches. “There are lots of pockets of innovation but I have not seen it on a systematic basis across the system,” he said.

Mr Payne indicated some of the constraints that many will feel when he talked about the new private finance intiative at Barts and the Royal London Hospital, which is nearing completion of the final construction phases. Yes, there was an understanding of the need to do things differently to support changing models of care and to look, for example, at engaging more closely with community care providers. But he asked: “Are buildings an enabler or a barrier?”

One viewer asked about the role of estates and facilities management in assisting the development of home care and telehealth services.

“We can definitely support that but the question is how we engage with the system and with CCGs,” said Mr Kempster. “It is not just a matter of throwing forward an idea. It is a way of evolving the system and developing the strategies that match the pace of change.”

‘It is not just a matter of throwing forward an idea. It is a way of evolving the system and developing the strategies that match the pace of change’

He made a “plea for dialogue”, saying: “If facilities become redundant, then it is for us to deal with them. Moving care into a home environment is likely to diminish the requirement for some of the dedicated clinical facilities and we have to understand what the needs are.”

The spectre of decommissioning facilities having been raised, another viewer asked about the reality of realising cost from redundant buildings. Easy to say; less easy to do. “On some levels it can become quite fraught with political difficulties,” agreed Mr Kempster. His watchwords were making a robust case and communicating this clearly.

Mr Ridley added that partnership could be the key. In Leicestershire the explicit ambition is that a significant chunk of the estate should be decommissioned. The key benefit there is that “all the right people are sitting at the table” to decide what care needs to be delivered and through which pathways.

“It needs to include not just estates but also medical directors, chief executives, operations directors and a link to patient groups,” he said. “There is an awful lot of passion around this and it is very hard to get things done. Fear of political backlash from the public often stops us getting things done so everyone needs to believe it is worth it and to communicate that clearly.”

Centralised estates

A number of questions were posed around the need for centralised estates and facilities management – whether publicly or privately provided. In essence, do we need to move out of very local provision of NHS estates and facilities management to something more strategic?

Despite the different perspectives of those on our panel, the three were in agreement: both local and strategic approaches were needed in balance with each other.

Mr Payne, for example, said that scale could bring benefits – but also some complexity. In his former role at University College London Hospitals (where until just over a year ago he was estates and facilities director), attempts had been made to take a strategic approach across the local partners in the local academic health science partnership, UCL Partners.

“There were huge opportunities for sharing standards, service providers and industrialising how we approached common day-to-day issues and taking a view around the whole property portfolio,” he said.

‘There were huge opportunities for sharing standards, service providers and industrialising how we approached common day-to-day issues’

Mr Kempster agreed. “I think there are common themes that should be resolved at a level of standards across our portfolio that covers the whole of England,” he said. “By the same token, you have to look at opportunities that exist in your local area. There is a need to take a balanced approach.”

The contract in Leicestershire may be the first of its kind, he said, but other areas are looking at similar models.

Private sector role

Could the private sector provide the entire solution, though? “The answer is no,” said Mr Kempster. “But it can work in partnership. Where there is a mixed model of delivery, the relationships have to be critically worked out. We have to be careful not to build in perverse incentives.”

One of the solutions offered by the King’s Fund as to how estates can deliver on the efficiency agenda was through the development of a strategic property management function. Just over two thirds of our viewers agreed such an approach was needed; a third said no. Did the panel agree?

“It’s a big question,” said Mr Ridley. “My view is that you cannot centralise everything or put everytshing out to the local level. You need a mix and you need to communicate what that mix is really, really clearly.”

‘You cannot centralise everything or put everything out to the local level. You need a mix and to communicate that’

Mr Kempster agreed: “I think we do [need a strategic property management function] but it has to reflect local needs.”

Mr Payne added: “I think there is a bit of a conflict here. A local and a national strategy may not always be the same. There are some real opportunities at a local level, for example, working with local authorities and other sectors. If we are looking at property, we need to get past barriers.”

Partnerships a priority

Among our viewers, the single factor most likely to help them develop a strategic property management function was partnership working between organisations, followed by the routine and early involvement of estates and facilities management in service redesign projects.

That kind of change is likely to come if trust boards want it, so the final question was to Mr Payne: how do you influence the trust board?

“The first thing is to find a credible voice and understand the language of the board,” he said. “Don’t talk about square metres and wattage but about strategy and commercial opportunity. Be really clear about the risk of backlog maintenance and things that are going to affect how we deliver services.”