Department of Health plans to create an independent property company to take over primary care trusts’ estate are likely to have a “considerable destabilising effect on local health economies”, social enterprises have claimed.

The warning, from umbrella body Social Enterprise UK, comes in its initial submission to a national review of barriers to a “fair playing field” for competition to provide NHS services, being conducted by healthcare regulator Monitor.

The submission claims not-for-profit enterprises that have been “spun out” of the NHS face a number of handicaps, including the cost and availability of capital, tendering and commissioning behaviours, length and type of contracts, and the ownership and management of NHS assets.

These social enterprises were largely formed by former NHS community services staff, to take over management of their services, when PCTs were required to divest themselves of their provider arms. However, the PCTs were not allowed to give these newly-formed organisations ownership of the land, buildings or equipment they used to provide services.

This, the submission states, means small social enterprises are burdened by the costs of maintaining complex portfolios of leases, tenancies and sub-tenancies, and face high costs of borrowing because they cannot provide collateral for loans.  

It adds that DH plans to transfer all of commissioners’ community estate to an independent property company when PCTs are abolished in 2013 will “add further complexity to the management of the estate, stalling the ongoing rationalisation of existing property assets”.

New leases will have to be prepared “incurring additional expense” and management arrangements are “likely to become more complicated”. It adds: “It is likely to have a considerable destabilising effect on local health economies.”

A separate submission from the NHS Partners Network, which represents private healthcare providers to the NHS, claimed that the main distortions to the NHS playing field that could currently be quantified were: differing access to the NHS pension scheme, differing VAT and corporation tax regimes for NHS and independent sector providers, and availability and costs of capital.

It said further work was needed to determine the impact of other perceived iniquities, including: NHS providers’ access to central services such as the Clinical Negligence Scheme for Trusts; NHS responsibility for the bulk of formal medical education; and the differing case-mixes of public and private providers.