The drive to find new funding streams for the NHS needs to make the most of the service’s massively underutilised estate, writes Paul Burstow

The spending review looms large. Whether in the NHS or social care nerves are on edge, fingers are crossed; much is being invested in what George Osborne puts in the spending envelope.

Simon Stevens’ five tests demonstrate just how the spending review’s importance is much more than just the amount of money, the psychology of the review matters, too. Getting the psychology wrong will make the task of transforming health and social care while living within a tight funding settlement all the harder.

Critical to this will be whether any of the £8bn is front-end loaded to support investment in primary, community and social care.

But this will not be sufficient. The fact that 80 per cent of NHS trusts posted deficits in Q1 of this year and adult social care is running on empty, with town halls unable to run deficits, create huge pressure to manage the immediate funding pressures and detract from the ambition of the Five Year Forward View.

Size unknown

This cannot be about saddling the NHS with a new generation of private finance initiative debts, but it could be about tapping into domestic and international pension funds, which look for long term investment opportunities with secure returns.

It should also be about NHS estate, how it is put to work to support new models of care and generate new sources of income. According to the real estate services company, Savills, there is no accurate figure for the size of the NHS estate.

Monitor put the value of it at £31.2bn, and estimated that £7.5bn could be realised by selling underutilised land and buildings. However, this would be a one-off capital gain and Monitor acknowledge that this figure would be hard to realise in practice. What is more, trying to do so would be a mistake.

Major asset

The best available estimates suggest there are over 5,000 hectares of NHS land sitting idle. Neither flogging off this land for a one-off capital receipt, or worse still hanging on to it but leaving it unused, makes sense in the current climate.

NHS estates

NHS estates

NHS estates

NHS organisations need to treat their estate as a major strategic asset, a catalyst for change. To support a more strategic approach, a comprehensive asset register should be compiled and published covering every part of the country. The register would support the formation of local NHS estate asset banks run as jointly owned social enterprise.

These NHS estate asset banks could partner with local authorities, housing associations and other pubic bodies to ensure public land is put to the most productive public purposes. This approach could be tested as part of the Chancellor’s City Deals with the aim of securing the patient centred primary and community healthcare envisaged in the Five Year Forward View.

”Through leaseback arrangements, NHS organisations could receive guaranteed annual returns while retaining land ownership”

One approach that NHS organisations could explore now is entering partnerships with housing associations to realise health goals and secure greater financial returns over the medium to long term. Other public landowners have already successfully pioneered this approach.

Revenue-based approaches to releasing NHS land would create new income streams. Through leaseback arrangements, NHS organisations could receive guaranteed annual returns while retaining land ownership.

Savings from improved housing

For example, the NHS is experiencing growing difficulties with arranging safe transfers of care for people with a mental health problem at the end of an inpatient stay. A lack of suitable housing is among the most common reasons for delay. By working with housing associations the NHS could develop the right type of supported housing for people recovering from mental ill-health.

According to research by the Building Research Establishment, the first year treatment costs to the NHS of leaving people in the poorest 15 per cent of the housing stock in England are £1.4bn. The health benefits associated with improved housing include reduced problems with self-care and reduced anxiety and depression.

”The NHS estate could play a much bigger part in realising the Five Year Forward View’s ambition and enabling the £22bn productivity challenge to be achieved”

Tenants also reported fewer GP visits following the move to improved affordable housing, suggesting there may be considerable savings in health service expenditure from improved housing.

The NHS estate could play a much bigger part in realising the Five Year Forward View’s ambition and enabling the £22bn productivity challenge to be achieved. Setting up local NHS estate asset banks could create opportunities to access new sources of capital finance and may even help address the housing crisis as well as support the emergence of Accountable Care Organisations by fostering collaboration between NHS organisations.

Paul Burstow is a former care minister and currently professor and thought leader in health and social care, and chair of Tavistock and Portman Foundation Trust