- EY review concerns largely empty health centre in Trafford
- Problems finding tenants has left CCG with annual costs of £2m
- Review also found “little evidence of proactive efforts to secure tenants”
An investigation into a £35m building project in Greater Manchester has cited repeated governance failures and a theme of “close professional relationships” between NHS commissioners, a council officer and the developers.
The review by consultancy firm EY looked at the circumstances in which a newly-built health centre in Trafford remains largely unoccupied.
Three GP practices and other NHS community organisations were expected to rent space within the privately financed “hub” in Altrincham, but later pulled out due to concerns over rental costs. This has left Trafford Clinical Commissioning Group with potential annual costs of £2m.
The review, commissioned and published by Greater Manchester’s devolution team, said it had “identified repeated failures in the governance processes of Trafford CCG in relation to the Altrincham Hub”.
The failures included:
- inadequate analysis and information contained in business cases;
- a failure of the CCG’s governing body to assess the commercial risks and rewards;
- little evidence of proactive efforts to secure tenants; and
- no documentary evidence of due diligence being carried out on the developer.
The facility has been financed under a relatively novel arrangement for the NHS, known as an “income strip lease” – with development firm Citybranch sourcing upfront investment from Canada Life.
NHS Property Services holds the 30-year lease, but Trafford CCG is liable for the annual rental payments through an indemnity agreement.
When outlining key “themes” around the project, the review said: “A number of close professional relationships were noted between individuals working for Trafford Council, the CCG and Citybranch (the developers).
“We have received a number of representations that these individuals have accompanied Citybranch to meetings at Trafford Council and at the CCG.
“Citybranch has confirmed that attendance at relevant meetings was part of the consulting services these individuals provided to Citybranch after they left their former roles at Trafford Council and CCG, and in each case over a year after the agreement for lease was reached on the Altrincham Hub site in April 2016.”
The review did not identify the individuals referred to.
As planned, Trafford Council has opened a library, café and office space on part of the ground floor, for which it has bought a 125-year long lease.
The CCG, which was previously rated “good” by NHS England, is still seeking to secure occupiers and service providers for the rest of the building in line with the original business case.
The review was highly critical of the governance processes in the early stages of the project from 2014 to 2016, when the CCG’s accountable officer was Nigel Guest. Gina Lawrence was chief operating officer, Joe Mcguigan was chief finance officer, and Kath Sutton was chair.
It also cited “poor management” from February 2016 to March 2018, when there was “little evidence of proactive efforts to secure tenants”.
Ms Lawrence held the joint role of chief operating officer and accountable officer for five months to March 2017, and Cameron Ward was interim accountable officer for 10 months to March 2018.
Several governing body members told the reviewers the shift to a shared leadership model with the council also meant there was less focus on seeking tenants for the hub, but the review said: “We do not believe they excuse the insufficient identification of risk at the outset of the programme and the lack of oversight throughout.”
Jon Rouse, chief officer of Greater Manchester Health and Social Care Partnership, said: “Without doubt this is a building which has the potential to be a great asset for the people of Altrincham and the surrounding area. But at present it is a wasted asset… we must learn from what went wrong to make sure this is not happening anywhere else now, and cannot happen again.”
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