- Public Accounts Committee takes evidence on NHS Property Services
- Julian Kelly downplays chances of hitting lease agreement target
- Company’s CEO wants national bodies to “insist” tenants sign agreements
NHS England’s finance chief has cast doubt on a government target for GPs and NHS trusts to agree leases with a property quango saddled with debt.
This summer, NHS Property Services agreed with NHSE and the Department of Health and Social Care to have leases in place with all its 6,950 tenants across its 2,900 properties by March 2020.
The target was set after the National Audit Office reported in June that leases have not been agreed with 70 per cent (up from 66 per cent in 2013-14) of tenants, creating a major obstacle to NHSPS’ financial sustainability.
But, appearing in front of the Public Accounts Committee yesterday, NHSE’s finance lead Julian Kelly told MPs: “Whether we will have arrangements in place for every client and organisation by March 2020 – I’ll be really straight – I’m not going to quite hold my breath on that. But we need to have made really material progress.”
He added it would be possible to find situations where tenants agree over the space they are occupying and services received, but “they may still not agree to pay the bill because we’re also going to have to go back and unpick who was paying what five to six years ago”.
NHSPS was established as part of the Lansley reforms to manage NHS estate formerly owned by Strategic Health Authorities and Primary Care Trusts, which accounts for approximately 12 per cent of the NHS’ total estate.
The company does not have the power to make its tenants, most of which are GPs, sign leases, and the NAO report said NHSPS has “no effective means of getting tenants to sign formal agreements”.
But its chief executive Elaine Hewitt told the committee the company is asking DHSC and NHSE to “help us require occupiers to sign up to occupation agreements of whatever form”.
She added: “We would like DHSC and NHSE to insist that these occupation agreements were in place, but I don’t know whether that’s possible within the NHS’ governance framework.
“It will have added benefits for the health system.”
The NAO report found NHSPS has £576m of outstanding debt owed by tenants, up from £210m in March 2014. Its properties have a combined backlog maintenance bill of around £1bn.
The company, a wholly-owned subsidiary of the DHSC, has also written off £110m worth of debt since 2014-15. Mr Kelly said he had not been involved with any discussions to write off any further debt. He also said he did not think there was a plan for NHSE to take over the running of the company.
“The focus has to be about agreeing where we are today and what charging we are doing looking ahead, almost before you even then get into the conversation which says… how am I going to resolve the past?” Mr Kelly said.
“We’ve got to stop the current situation getting worse.”
But he pointed to a policy agreed by the DHSC and NHSPS in May for NHS trusts to apply for ownership of NHSPS estate in buildings used for local services.
The DHSC is currently carrying out a review of NHS Property Services, which was due to be published on 31 October. However, the DHSC’s permanent secretary Chris Wormald told the committee it would now be completed, and its results published, by the end of 2019.
HSJ Strategic Estates Forum
The HSJ Strategic Estates Forum, now in its 3rd year, takes place in London on 12 March 2020. 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 availability of and access to capital, tackling backlog maintenance, utilisation of the estate and role of technology in infrastructure development. The forum builds on the Naylor Report and highly anticipated 2019 spending review.Register your interest