Sustainability and Transformation Healthcheck 14/12/16

The pressure is on NHS Trusts to dispose of or find an alternative use for any surplus estate. By April 2017, all Trusts must have plans in place demonstrating that they will have a maximum of 35% of non-clinical floor space and 2.5% of unoccupied or underused space by April 2020.

However, disposal of surplus estate should not be the only solution considered, particularly where future needs are volatile and uncertain. Hasty decisions to dispose could lead to significant extra cost in the future.

What are the potential options?

There are many different options that should be explored. We have listed a few examples below but there are many variations to suit different scenarios:

• Development of accommodation for rehabilitation to ease pressure on beds within hospitals;
• Development of key worker homes;
• Developments combining commercial elements to finance clinical accommodation (e.g. private healthcare, residential, retail or commercial premises side by side or even above NHS facilities);
• Joint ventures between public sector organisations to facilitate integration and free up the land/buildings of each participant with a share of risk/reward;
• Joint ventures with private sector organisations such as housing developers;
• Use of various NHS grant programmes to facilitate the development of integrated facilities within hospitals e.g. ETTF;
• Grant of flexible income generating leases and licences of space which is wholly or periodically fallow;
• Formalising leases and licences with proper service charges to ensure full recovery of overheads and market rents.

How can Ward Hadaway help?

At Ward Hadaway, our dedicated public sector property team has advised our Trust clients on a number of different types of creative solutions.

We advised a Trust which land-swapped a car park with the local council, the local council having constructed a new car park for the Trust on adjacent land.  This freed up land for disposal to a residential developer and will provide many more spaces, in much better conditions and with the opportunity to generate income for the Trust.

We acted for a Trust which won a contract to provide services to a local council.  Other services would need to be integrated and our client constructed a new facility on its surplus land and granted leases to other service providers within the facility as well as the space required for the delivery of the Trust’s service to the council.

We also advised a Trust in connection with the sale of surplus land to the Homes and Communities Agency (HCA) as part of a regeneration scheme with a mechanism for overage to be payable to the Trust in the event of HCA being able to make profit on the regeneration.

There are many more examples of creative use of surplus land and we can discuss them with you as required.

For further information on the issues raised in this update, please get in touch with Karen Andrews, Saji Bratch or a member of our Healthcare Team.