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NHS Property Services set up to fail says PAC report

A report from the Public Accounts Committee (PAC) into the business of NHS Property Services has concluded that the business was set up to fail and urgent action is needed to overhaul a broken system.


NHS Property Services is being expected to run properties on behalf of the Department of Health and Social Care, but it was not given the powers of a commercial landlord - such as penalty charges, legal action, cessation of services and eviction - to enforce occupancy contracts and charges, because clinical services must be maintained. The PAC describes this as a "muddled objective" and adds that NHS Property Services also inherited a range on long-standing issues. Although it has made progress in tackling some of these issues, it has nevertheless struggled to get tenants to sign rental agreements (70% are still without agreements), without which many bills have been disputed, outstanding debt has almost tripled, to £576 million in March 2019, and £110 million of debt has been written off in the last five years.


Chair of the PAC says: “Pursuing and resolving these disputes is a waste of NHS resources which would be much better focused on delivering better patient services. The Department must take urgent action to fix this system which does not serve the taxpayer or local health bodies well." 


The PAC report says the Department, NHS England and NHS Improvement and NHS Property Services have had six years to get a grip of this problem and have "failed miserably." Recognising that the situation is complex, the PAC says the whole system needs to work together far more effectively to find a solution which incentivises tenants to sign rental agreements and pay their bills promptly. 


The Department is currently undertaking a review of NHS Property Services which is due to report by the end of this year. The PAC has made a number of recommendations which it says the review needs to take into account, with more transparency required in a number of areas, for instance, around decisions for property disposals, proposed charges and subsidies. 


The PAC also recommends that NHS Property Services should review its facilities management arrangements, which are currently a mixture of in-house and outsourced. “Rationalising the arrangements has had clear benefits, but it is not clear to use why NHS Property Services has a mix of in-house and outsourced facilities management services and why these decisions were made.” It is recommended that these contracts should be reviewed to establish if they deliver value for money to both the taxpayer and local tenants. 


Click here to read more and download the full report.