Hospital and primary care trusts could overcome some of the obstacles of payment by results and private finance initiatives by selling their estate, a report from the Social Market Foundation says.

The report, co-written by NHS Confederation policy director.Nigel Edwards, argues NHS organisations do not need to own their buildings.

Instead, they could transfer ownership into a joint venture with a private sector partner and lease back the facilities they need.

This would allow trusts to operate as clinical groups. Buildings could then be used by more than one organisation, the report argues.

The model would overcome the inherent difficulty of PbR - that hospitals have a vested interest in making sure buildings are fully used.

Such joint ventures would be more flexible than large PFI deals and would let NHS organisations keep control over assets, it says.

Mr Edwards said: 'If we could break the link between the organisation that delivers the service and the building it occupies, there might be some very significant advantages.'