In 2013 NHS Property Services officially took charge of 10 per cent of the NHS estate, equating to roughly 3,600 properties. The new organisation took on all those properties not transferred to Andrew Lansley’s ‘Clinical Commissioning Groups’ (CCGs), forming the largest property company in Europe.
Although a private company, 100% of shares are owned by the Secretary of State, who subsequently collects the profits generated to be reinvested back into the NHS budget and redistributed at the discretion of the Secretary of State. However, because of provisions in the 2012 Health and Social Care Act, the Government is free to sell all but one share to a private investor opening up the potential for privatisation of the NHS estate.
The Labour Party, alongside the trade union Unite, has been openly scathing of this aspect of the Act, claiming that NHS Property Services is a vehicle which will be used to privatise the NHS. Unite is subsequently lobbying against what they see as the ‘selling-off’ of the NHS.
Nevertheless, although its long-term future may be uncertain, NHS Property Services currently presides over a £3bn estate, acting as landlord, land owner and property developer for a significant chunk of real estate.
As part of the Government’s ‘Accelerating the release of Public Sector Land’ initiative, designed to provide land for 100,000 homes by 2015, and with all wider housing targets looking set to be missed, NHS Property Services has so far identified land for over 2,000 new homes. With further sites on the horizon, the group estimates the value of all disposals could reach £250 million.
In recent days, the Health Secretary Jeremy Hunt, has stated that the NHS (i.e. CCGs) needs to sell-off £7.5bn of land, on top of that being disposed of by NHS Property Services, in order to tackle soaring costs. This will also help generate the £10bn in extra savings targeted by the Government, after the CEO of NHS England, Simon Stevens, pledged to deliver £22bn of savings every year.
Although the sale of CCG owned land will be fraught with red tape and political controversy, NHS Property Services’ plan to dispose of ‘surplus’ land should be more straightforward. Unlike CCGs, the company has a remarkable freedom to manage its portfolio as it sees fit, befitting its status as a private company.
Of course, political considerations may deem the redevelopment of sites with a significant contribution to local healthcare unthinkable. However, if in the future NHS Property Services shares are to be sold to private enterprise, it could be possible to sell 100% of assets held by NHS Property Services. This would occur without the broader benefits to the NHS budget and services.
In recent weeks the company has sold a large ex-hospital site in Salisbury for £4.1m, to Quantum Group, and is currently seeking outline planning permission for 100 new homes on a site in Orpington, in South London. These headline-grabbing disposals are accompanied by the sale of far smaller sites across the UK. So far, the company has identified 10 former PCT sites which would provide 50 homes between them.
However, as the NHS is publically perceived to be struggling in the face of an unprecedented pressure on services , the selling-off of key assets, so-called ‘surplus’ land, could prove controversial and difficult to manage for all parties involved, certainly at the local level where developments may be proposed.
This will also be particularly worrying for local communities, as any future Government would be unable to bring lost land back under state control, regardless of what they decided to do with NHS Property Services. For communities concerned about their local NHS provision, and the future of services, it will be a worrying development that once land is gone it’s gone. Whilst in principle new services could be built on alternative sites, the cost of doing so would be prohibitive and seems unlikely in the foreseeable future.
One method of managing this local concern, and mitigating any negative perception of NHS Property Services and potential developers, will be to undertake extensive public consultation and information events, not simply on the bricks and mortar of any proposals but on the need for, and the principles of, redevelopment. This should inform local residents and businesses of any changes to the NHS estate, and the effect it will have on them, as well as the benefits to the broader NHS budget.
There are certainly benefits to be had from this arrangement. The NHS can cash-in on its sprawling and expensive estate, with some profits reinvested in the remaining estate and the rest going towards the NHS budget, whilst developers can address a local need for housing.
NHS Property Services Regional Director for the South, James Wakeham, has appreciated the need to consult and inform local residents. In a statement made after the sale of the Salisbury site he noted “we were acutely aware of its importance to local people…it is important that taxpayers know the money will be reinvested in modern healthcare facilities for NHS patients.”
In such an emotive arena the benefits of the sale of NHS property need to be stated all the more, and local concerns must be acknowledged and responded to.
In August 2014, NHS Property Services submitted an application for a change of use for their Orpington site, from office to residential. During the statutory consultation local residents outlined their concerns that public land, particularly NHS land, would be given over to private ownership.
Although this response did not materially impact the application, it highlights the likely concerns of the community when a full application for redevelopment is submitted.
Developments in Putney and Clapham have seen similar, and notably more organised public opposition to developments. In the face of the proposed redevelopment of a hospital in Putney more than 1,200 residents signed a petition to oppose the building of luxury flats on the site. In nine days Friends of Putney Common raised £12,000 of the £15,000 needed to oppose the scheme. Eventually, a judicial review was lodged against Wandsworth Council, regarding the legality of their plan.
In Clapham, a public inquiry was held after Tesco appealed Lambeth Council’s decision to refuse permission for a new Tesco store and residential development. The inspector had noted that the development should be refused as the current building forms part of the “familiar and cherished skyline” of the local area.
Although not NHS Property Services land, communities in Putney and Clapham have proved how local communities can attempt to scupper the redevelopment of healthcare, inviting a more emotive response than traditional development sites.
If groups such as Quantum, who are seeking to redevelop their new site in Salisbury, wish to take advantage of NHS disposals, it is imperative that they engage with the public. Any re-development of NHS land will cause disproportionate concern amongst residents, and to avoid local objection developers should appreciate that the nature of their sites will stimulate an emotional response amongst the community.
In local authorities with forthcoming elections and/or where wards and boroughs are marginal, such issues can potentially make or break an application at committee. Furthermore, there is increasing focus on community engagement processes at appeal, particularly where public sector land is involved.
Unless the public are kept well informed, new developments are likely to experience both public and political opposition, reflecting one of the most emotive areas of development, where a perceived backbone of British society is seen to be under threat.