Buildings need to be used efficiently and filled to capacity to raise money.needed for investment back into the health sector, argues Marisa Broadhurst.
Why the health service does not make better use of the valuable asset it possesses in its estate, its property and buildings is a mystery to me. According to the National Audit Office, the total NHS estate was valued at around£23bn in 2002. With land prices having soared in the past five years, this figure can only have increased significantly..
Yet an incredible proportion of this must be surplus land, either unused or used inefficiently, and converting that into useful capital through disposals or leaseback schemes would, in any commercial sector, be a priority. So why has similar action been so slow in the NHS?
You may.have noted that I used the phrase 'must be' rather than 'is'. And that is the point. With few exceptions, no one.seems to know how much surplus land there is. There are no clear figures. Nobody knows because nobody has conducted a thorough assessment..
Until experienced facilities managers and estate managers are appointed at board level, as they frequently are in commercial sectors, so that they have to report in the same way other executives do, it is hard to see this changing. At present, property is simply not a priority for health service decision-makers. It needs senior people on the board to make it so. Only then will the surpluses in land that could and should be realised for reinvestment be properly understood and targeted.
Making property a priority
In March 2002, the National Audit Office warned that trusts needed to sell surplus property more efficiently to speed up the input of profits from sales into the NHS. Its report, The Management of Surplus Property by Trusts in the NHS in England, revealed that if sales that took 24 months to complete had been speeded up by just six months,£80m could have been invested in the NHS more quickly.
So why, in 2007, do we remain in much the same situation, with effective disposals of surplus property taking an excessively long time to identify and push through? Clearly, not enough has been done by everyone involved - from government departments to commercial advisers to the NHS - to raise awareness and understanding of just how valuable a nest egg the health service is sitting on..
Estate professionals need to be talking to clinicians and ascertaining their future needs and then assessing exactly what property is or is not required. Buildings need to be used efficiently and filled to capacity to realise the cash needed for investment back into the sector. I think boards need to be demanding this.
This is where one might normally cue a few outraged cries of how we mustn't sell the family silver. But in my view,.such a reaction wholly misses the point..Heirlooms are not what the NHS desperately needs. Hard cash is. Realising the value of those inherited assets - effectively and quickly - offers what I believe is.the best possible way of.injecting cash.into our health service..
This is not about selling assets to pocket the profit. It is.about a hard-nosed analysis, involving clinicians, of what the future needs of the service are going to be to ensure there is no wasted space. And things could change very soon, now that foundation trusts are up and running, motivated to think financially by the prospect of being able to keep and control their own surplus cash.
Whatever political changes occur at a governmental level over the next few years, I believe foundation trusts should be.allowed to keep that surplus. Trusts need autonomy if they are to realise the value of the property they sit in.
Marisa Broadhurst is a partner in the property practice of Beachcroft LLP.