The Government has published its response to Sir Robert Naylor's Review of NHS property and estates, published in March 2017. Lord O'Shaughnessy, Parliamentary Under Secretary of State for Health, and Chair of the recently established NHS Property Board, has issued a challenge to the NHS to accelerate the disposal of unused land and buildings. The money, he says, can be reinvested into the NHS and NHS staff may also benefit from the housing developments that the process enables.
Lord O’Shaughnessy says: "Sir Robert rightly concluded that, at a time when investment in transformation is an urgent task, and while we have other economic imperatives such as a national housing shortage to consider, it is right that we look to surplus and unused NHS land to make a contribution. When this land can be developed for affordable housing, we want to give local NHS Trusts the opportunity to offer a right of first refusal for those homes to hard-working NHS staff."
The Naylor review concluded that property that is vacant or under-utilised is not an asset to the NHS and made a series of recommendations. In its response document, the government states it agrees with most of Sir Robert Naylor's recommendations, but it has chosen a different method of delivery to the one initially envisaged.
One of the recommendations with which it only part agrees is the controversial topic of where and how the money raised from land sales is retained. Recommendation XI in the Naylor Review said that at the minimum the Department of Health and HM Treasury should provide assurances to STPs that any sale receipts would be retained locally if the disposal is in agreement with STP plans and will not be recovered. It also recommended the Treasury provide additional funding to incentivise land disposals through a “2 for 1” offer in which public funds match disposal receipts.
The government does not accept the “2 for 1” recommendation, saying that in practice the best STP service and estates plans may receive more capital funding than the “2 for 1” suggested by the Naylor Review. The government does accept that NHS providers will be able to retain the receipts generated from the disposal of surplus land and property on the condition that they are reinvested in the NHS estate to deliver local priorities and STP strategies. It will introduce new arrangements to make it easier for Trusts to release land and ‘bank’ the asset to be drawn upon when they are ready to fund new capital projects.
It will introduce a further arrangement for Trusts disposing of former PCT estate. Whereas previously half the profits from the sale of such estate would have to be paid to the Secretary of State, Trusts will be able to apply to the Department to retain the overage sum to fund STP capital projects.
However, when it comes to assets owned by NHS Property Services (NHSPS) or Community Health Partnerships (CHP), it says as these are national assets the receipts generated from the disposal of these properties or land will continue to be pooled nationally and reinvested in the NHS where most needed. The benefit to the local Trust will be they are no longer paying rent for these assets and therefore their costs will reduce.
Local NHS organisations should not assume, therefore, that receipts generated from the disposal of these properties will be available for redeployment in their areas. However, NHSPS has agreed mechanisms for identifying local investment priorities, including a process by which local Clinical Commissioning Groups can put forward a business case for local investment to NHS England for consideration.
Other areas where the government has chosen a different route to that recommended by the Naylor review include the decision not to merge NHSPS and CHP. These will continue to provide the asset ownership and management, facilities management and financing functions that they offer currently and make improvements across a range of functional areas.
Estates policy and technical guidance will be delivered on behalf of the NHS Property Board by NHSI. This will provide general estates policy and technical guidance, and support and help NHS providers to develop revenue-generating business cases. It will also complement Lord Carter's PEP programme. A full national Strategic Estates Planning service will be developed to help STPs move forward.
This is a very detailed response, which we will review in more detail in the March/April issue of Pulse. You can download a copy here.
