The Department of Health’s two property companies are beginning a programme of joint working and are set to merge in two years’ time, HSJ has learned.

Senior sources have confirmed to HSJ the DH plans for Community Health Partnerships and NHS Property Services Ltd to merge in 2015.

Both are private companies wholly owned by the health secretary.

NHS Property Services was set up during 2011-12 and only became fully operational in April, when it took control of 4,000 properties. Most were previously owned by primary care trusts, which are now abolished.

The majority of its portfolio is community health or primary care facilities, although it also includes office buildings and some empty properties.

Community Health Partnerships was set up in 2001 to manage the DH’s interests in local improvement finance trust companies. LIFT is a scheme for joint public-private community property developments.

In April it also took on ownership of PCTs’ interests in LIFT companies, which between them own around 300 primary care properties. This means CHP owns 40 per cent of all LIFT ventures, and as of April it also controls leases of LIFT properties.

The plan to merge it with NHS Property Services is intended to make it easier to manage and reconfigure the primary and community care estate, by making the best possible use of LIFT and ex-PCT buildings.

Having two companies risked that both would compete for services to be located in their premises to secure rent income.

HSJ understands the two companies are this year working together on ten “quick win” projects, which will help them demonstrate the value of working together.

Each of the projects will focus on using LIFT properties more effectively in a particular locality. Typically this could involve moving community or primary care services out of less well maintained NHS Property Services buildings, into a LIFT property.

This would have the effect of freeing up surplus property to be sold off and maximising use of LIFT properties, which generally have long-term maintenance contracts.

The merger plan was not mentioned in NHS Property Services’ business plan for 2013-14, published earlier this month. The plan says: “Strategically both companies will work closely together at national and local levels to ensure that commissioners have a seamless service and benefit from the expertise that resides in both entities.”

The move raises questions over why the DH set up NHS Property Services as a separate entity, only to merge it after two years.

Capita executive director for health David Lawrence, commenting on the plans, said: “The merger was inevitable and is logical, as there is not enough space for two similar public sector organisations to operate within the NHS community estate.

“There will be some immediate efficiency realised by reducing the overlap of some activities but the key question for the future will be the strategy and plan for the government stake in LIFT.”

A joint statement from the two companies said: “NHS Property Services and Community Health Partnerships are already working closely together to deliver value for money for patients and the NHS from our primary and community estate.

“By working to a common agenda, best practice can be shared, resources used effectively and each company can focus and build on its skills and expertise. The two organisations mirror each other with the secretary of state for health as sole shareholder. 

“Merging the two companies in the future makes sense and we would welcome this when the time is right.”