- Central and North West London FT sets up a subsidiary company to manage estate and generate income
- Trust says the company could become a conduit for other trusts in London
- VAT benefits have led to criticism of other trusts setting up subsidiaries
A London foundation trust has established a subsidiary company to rationalise its estate and encourage a more commercial approach to generating revenue and capital receipts from its 125 sites.
Central and North West London FT has said the company could potentially be a conduit for other trusts in the capital to use.
NHS providers have been encouraged to maximise income from their existing estates, with Sir Robert Naylor’s review last year estimating that land redevelopments of surplus land in London could raise more than £5bn.
Thirty five of the 46 estates staff at CNWL are to transfer to the wholly owned subsidiary, called Quality Trusted Solutions, in April.
Gillian Stafford, CNWL’s director of estates and facilities, told HSJ the company would manage the planned rationalisation of the trust estate, which in some areas could see the number of sites reduced by two thirds.
She added: “But we don’t want to just be selling off the family silver. We want to look at generating long term revenue streams as well. We are being really aggressive on it while staying really patient focused. Other trusts are interested in it and we think it could unlock a lot of potential.”
She said one example could involve a new clinic being built with residential units above it, potentially generating a capital receipt along with ongoing revenue income due to the freehold being retained.
Staff who are transferring would stay on their current terms and conditions, but new staff recruited by the company could be employed on different contracts. In some cases, this could help generate savings, while in others it might attract staff who may not consider working in a traditional NHS job.
A handful of other trusts, including Northumbria Healthcare FT, have already taken similar steps, with others such as Airedale FT and Gloucestershire Hospitals FT, in the process of doing so. In these cases, the transfer involves hundreds of staff including cleaners, porters and security guards, as well as officers in the estates management team.
The moves have been criticised as a “VAT scam” by some Labour MPs, after Gloucestershire Hospitals said its new structure would lead to “opportunities open to commercial organisations in respect of VAT recovery”.
CNWL, which is transferring a smaller number of staff than these trusts, said it does not expect there to be benefits in terms of VAT recovery.
Trust finance director Hardev Virdee said running the estate through the subsidiary will “break the chain of more rigid ways of working and extend the financing options” in relation to land sales and capital projects.
The HSJ Strategic Estates Forum is taking place on 20 March at BMA House in London. This is a high level strategic forum that brings together estates directors, sustainability and transformation partnership estates leads and trust board leaders responsible for the estates function who are developing strategic plans for their organisations and local health economies. The focus of the forum is on issues such as the delivery vehicle for the Naylor Report, the creation of Project Phoenix, advice on establishing strategic estates partnerships and assessing progress of STP estates plans. Sir Robert Naylor, national adviser, NHS Property and Estates; David Williams, director general of finance, Department of Health and Simon Corben, head of profession, NHS Improvement are all confirmed as keynote speakers for the event. Register your interest for this free to attend event on our website: https://strategicestates.hsj.