Details of NHS privately financed estates plan revealed

Subject to business case approval this spring, at least two procurements are planned to be launched in June to attract companies the NHS can create joint ventures with to unlock capital funding for large projects.

The plan for six public/private partnerships, named Project Phoenix, was established last year by Community Health Partnerships but the process became delayed.

HSJ understands a business case was submitted earlier this month that if approved will enable the scheme to launch this summer.

Under the plans, joint ventures will be created in the South West, South East (including London), the Midlands, East of England, North West and in Yorkshire and the North East.

The joint ventures would be known as regional health infrastructure companies and would be formed by the NHS and private firms. 

The RHICs would be the “delivery route” for trusts and sustainability and transformation partnerships to transform their estate.

Up to £5.7bn of funds could be accessed if NHS trusts maximised the value of their estate before selling off surplus land and property, according to last year’s Naylor review.

HSJ understands the RHICs would set up subsidiary companies which would run development projects, and be classified as public/private partnerships.

This could mean the projects would be delivered off the government’s balance sheet - meaning they would not count against the Department of Health and Social Care’s capital spending limit or the national debt.

If the business case is approved, the first procurements would be launched in June for the South West and the Midlands.

HSJ understands these regions have been chosen because a number of capital projects, collectively worth between £50m and £100m per region, have already reached certain milestones such as having a strategic outline business case.

Procurements for RHICs will only be launched when enough projects in a region have met these requirements.

It is understood going to the market with a bundle of projects would result in better rates for construction and soft facilities management costs.

The procurements for RHICs are estimated to last between 12 and 14 months.

Project Phoenix was discussed at HSJ’s strategic estates forum last week, where it was said RHICs would “complement” the small number of strategic estates partnerships that have already been agreed by trusts with private companies.

HSJ understands RHICs would not replace the existing 49 LIFT companies – local joint ventures between CHP and the private sector to develop community facilities.

If the business case is approved by the DHSC, it will be passed to the Treasury for final approval later this spring.