NHS asset sales are unlikely to meet Treasury expectations

An efficiency report published alongside last month’s Budget said approximately 20 per cent of public sector land and buildings should be sold over the next 10 years - a figure partly derived from an NHS London study which concluded London hospitals could lose 18 per cent of their space without affecting standards.

The total value of NHS land and buildings stated in balance sheets is approximately £38bn. A 20 per cent reduction would be equivalent to £7.6bn of asset sales over 10 years, or £760m a year.

But data shows NHS organisations are only planning to sell off 2.5 million square metres over the next two years.

That is equivalent to around £257m a year, but only if it fetches the average price per square metre of £206 which organisations were forecasting last financial year.

A number of those sales did not go ahead because of the property slump.

The biggest expected sale in size was 124,000 square metres of land owned by Dudley primary care trust. DH figures show Dudley initially hoped for £7.1m for the site - valuing it at £57 per square metre.

But the sale did not go ahead and the PCT is now anticipating just £4m-£6m - giving a value as low as £32 per square metre.

Sutton and Merton PCT in London plans to sell a similar site this year. The PCT initially hoped for £145 per square metre, but has been told the land’s value could be 40 per cent less.