Three ICSs spent £21m on vacant property last year

The issue of vacant space has long been viewed as a frustrating “sunk cost” by estates directors. But the precise amount was not public until HSJ obtained the data through a freedom of information request to the government-owned body.

NHSPS owns or manages approximately 10 per cent of the NHS estate, including community hospitals and GP practices. Some of this estate is held under a private-finance initiative arrangement.

One local estates boss, who asked not to be named, said this was a big issue as it was a “sunk cost”. They added: “We don’t deliver any outcomes from the estate that is unoccupied.”

Other sources said it can be difficult to find tenants willing to take on costs of occupying buildings or modest individual areas in otherwise occupied sites.

Three systems, which include the constituent provider trusts and commissioning boards, accounted for around a third of the total £65m spent on empty space leased from NHSPS.

South West London integrated care system had the highest spend on vacant space, of around £9m.

The bulk of this was created when mental health services moved out of its Queen Mary’s Hospital site into new co-located facilities, and work was under way on possible options for its future.

Board papers from earlier this year suggested PFI rules may limit the conversion of the space.

Mid and South Essex spent £5m on empty space at Brentwood Community Hospital.

The system’s chief financial officer Jennifer Kearton said this related to two temporary wards set up during the pandemic but closed last year. HSJ understands there have been cost constraints to revert them. A further £1m was spent on other vacant spaces.

North East and North Cumbria said it faced challenges over vacant isolated rooms scattered across occupied buildings, which had incurred costs of around £6m.

The figures suggested the cost of void space in PFI sites is significantly higher than non-PFI sites.

Nuffield Trust researcher Sophie Julian said empty space in PFI buildings or those with a PFI-style agreement cost the NHS on average £1,048 for every unused square meter compared to £342 per meter where the NHS owns the building outright.

PFI buildings are held by NHSPS under a lease. The organisation passes down this rent and other service costs to the occupier.

These builds can incur higher costs due to the need to maintain buildings to a certain standard for eventual return to the NHS and by nature of being more modern facilities.

Ms Julian said: “While PFI schemes did help bring private investment into the NHS estate, over time many of those schemes have proven to be expensive and inflexible to the NHS’s changing needs.” She said this underlined the need for the NHS to be able to access capital funding direct from government.

HSJ understands that vacant space accounts for around 5 per cent of the NHSPS estate, and work is actively going on to reduce this. This includes a “hand back” scheme whereby commissioners release vacant space to the not-for-profit property quango.

NHSPS said it would not comment because it did not want to break the purdah rules in place during the pre-election period.