NHS Property Services Contents

2Future challenges

Striking the balance between local incentives and national control

14.NHS Property Services aims to dispose of properties that are under-used or no longer needed. By March 2019, it had disposed of 410 surplus properties with a capital receipts value of £347 million.25 The Department confirmed that NHS Property Services’ release of surplus land has delivered 1,921 housing unit equivalents, as part of the government’s scheme for releasing public land for housing, about 20% of the Department’s total delivery.26 The decision on whether a property is surplus to requirements is made by the health commissioners and clinicians who use the property and not by NHS Property Services.27 NHS Property Services noted that occupiers benefit from disposals, in that they are immediately relieved of their operating costs, rent, and other charges if appropriate. However, they do not benefit from the sale of the property as these receipts are reinvested in the estate at a national level rather than going back to the local area in question.28

15.We raised concerns about the lack of transparency in NHS Property Services’ property disposal decisions. For example, whether decisions are taken that are in the best interests of the local health system or to achieve the greatest financial benefit. NHS Property Services told us that it aims to get the best value for the taxpayer and that it has really good engagement with local health systems and the national bodies on property disposals.29 We also received evidence that NHS Property Services does not always engage with local health systems on investments and developing the estate for the future.30

16.NHS Property Services inherited over 2,400 separate facilities management arrangements, some of which were provided in-house and some of which were outsourced. It has rationalised these arrangements down to fewer than 50 suppliers and aims to rationalise them further.31 We raised concerns about whether NHS Property Services should be involved in facilities management, or whether it would be better to let the local tenants organise these services. NHS Property Services stated that it can achieve national economies of scale, either through letting national contracts or by operating on a national standards model and can drive costs down. It noted that it makes insourcing or outsourcing decisions by looking at each type of service to see what the most cost-effective solution is, and that if a tenant thinks it can achieve better value elsewhere, they are not obliged to use the services provided by NHS Property Services.32 NHS Property Services and NHS England and NHS improvement cited examples where local NHS bodies are in the process of taking control of the property that they currently rent from NHS Property Services.33

Providing a level playing field

17.About 18% of GP surgeries are owned by NHS Property Services. The rest are either commercially owned or owner-occupied.34 We asked NHS Property Services whether it is fair that one GP practice is paying a full rent on its commercial premises, and yet another GP practice down the road occupying broadly similar premises can get away with not paying its rent to NHS Property Services on time or at all. NHS Property Services acknowledged that it was not equitable, but also said that the starting positions were very different. Tenants in commercial properties willingly took on tenancy agreements compared to its tenants who were already in occupation, where the basis for occupation and charging were unclear, and in the absence of any documentation, the enforcement route is unclear.35

18.Tenants were not always fully charged for rent and services before NHS Property Services took on ownership. Initially, the Department agreed that to begin with NHS Property Services would charge tenants in the same way as the previous owners, primary care trusts and strategic health authorities. In practice, this meant tenants would only be charged 60% of their total charges with the remaining 40% being charged to commissioners. These arrangements have largely been withdrawn over time, but current levels of subsidy are not known.36 Some tenants have cited affordability as an issue for their unwillingness to pay bills, and this may be linked to the withdrawal of subsidies. The Department told us that one of the reasons that it moved away from replicating exactly what primary care trusts and strategic health authorities had done previously, to a more commercial market rental system for all, was to ensure fairness. However, it accepts that the current system can lead to unfairness and that it needs to work with commissioners on a case-by-case basis to ensure fairness.37

25 C&AG’s Report, para 1.2 and Figure 13

26 Qq 105–106

27 C&AG’s Report, para 2.17

28 Qq 26–29, 75

29 Qq 32–37; written evidence from Central London Community Healthcare NHS Trust (NPS0004)

30 Written evidence from NHS Clinical Commissioners (NPS0005)

31 Q 39; C&AG’s Report, para 2.23

32 Qq 39–42

33 Qq 69–72

34 C&AG’s Report, para 1.3

35 Q 55

36 Q 101; Written evidence from NHS Clinical Commissioners (NPS0005); C&AG’s Report, para 1.5

37 Q 101; C&AG’s Report, Figure 12

Published: 5 November 2019