The commissioning white paper leaves the future of the £36bn PCT and SHA estate wide open, as Eve Gregory and Catherine Ochiltree explain

The government has set out its vision for reshaping the commissioning of services in Equity and Excellence: liberating the NHS. While the white paper details its proposals for the abolition of primary care trusts and strategic health authorities in 2012-2013, it does not address one fundamental question: what will happen to the estate held by PCTs and SHAs? In the case of PCTs, the estate is considerable and, combined with that of SHAs, was worth approximately £36bn when last valued in 2008.

The PCT estate is already under the spotlight, following Transforming Community Services (TCS) which required providers and commissioners to resolve where the estate should sit. Implementation of the split is only in its nascent stages and any estates solution to the white paper will have to complement these arrangements.

Red tape

A PCT’s estate is much wider than that affected by TCS; it comprises community hospitals, clinics, offices, walk-in centres and some GP surgeries. However, we must not forget the estate of the soon-to-disappear SHAs, although this will only comprise the SHAs’ offices, as they are not empowered to hold any other property in their own right.

We are told by NHS chief executive David Nicholson in his letter to chief executives that an option appraisal is being conducted and that its recommendations will be available in the autumn. Until then, we can only speculate as to the potential options for the holding of the estate.

No matter where the estate sits, professional and funding resources will need to follow it in order to ensure proper management and investment so that properties are fit for purpose.

The question of remoteness arises in some cases. Will the property-holding entity act as a puppet to a consortia’s requests in property dealings? Or will it need to be persuaded as to the merits of a transaction before it will proceed? The key will be in avoiding the imposition of unnecessary red tape.

The answer may not lie in any one option but may be a pick and mix approach dependent upon the functions of each individual property. The difficulties with this approach are that we may end up with a new generation of minor user rights.

This is especially so if a property is used for more than one function and dividing the estate would reduce the scope for flexibility of uses between sites and works against the Total Place concept of maximum utilisation. This is a concept applied to all public sector bodies in order to keep the collective estate to an efficient minimum. Conversely, the notion of an estate held by the respective consortia would appear to sit comfortably with the government’s agenda for localism.

The bottom line

It is inevitable that, with the estimated number of consortia being less than that of PCTs, there will be a rationalisation of the estate. Coming at a time when there is a lack of appetite in the commercial property market and consequential low property values, new estate owners could find themselves saddled with the liabilities of unmarketable properties, as well as competition from other consortia disposing of assets, thereby flooding the market.

No matter how efficiently the estate transfer is dealt with, at a time of austerity it will come at a cost, and resources will need to be made available to meet it. Including the assets in statutory transfers will significantly reduce the expense that would otherwise be incurred in due diligence undertakings by lawyers and will avoid the restrictions on alienation of property.

However, such a nationwide scheme of transfer would require an exercise of the order of the 2006 reorganisation of PCTs.

Is it me, or have we been here before?

Possible options for estate holding

  • The GP consortia. This might seem like the simplest solution but we have yet to ascertain how they will be constituted. Indications are they will be statutory bodies with powers and functions set out by primary and secondary legislation.
  • Local authorities. While authorities will have the property management skills, will they want to hold properties in which they otherwise have no direct interest?
  • National/regional commissioning boards. These boards may present more of a sense of continuity with consortia potentially merging and evolving in the initial years. Those whose involvement in the NHS predates the creation of NHS trusts in the early 1990s may regard this as almost full circle back to NHS estate centralised ownership.