A National Audit Office report today finds that NHS trusts need to do more to identify property they no longer need and dispose of it more quickly and effectively. Better management could bring forward some sales and release significant sums for use elsewhere in the NHS.
The NHS has one of the largest estates in Europe, valued at some £23 billion. As clinical practice changes, NHS trusts have to review their stock of buildings. If they can no longer serve a useful function in delivering healthcare, and cannot usefully be renovated, they are sold.
In the three years to March 2000, NHS trusts sold at least £380 million of surplus property, and they intend to sell a further £700 million by March 2003. Sir John Bourn, Head of the NAO, told Parliament that while trusts sold property competitively and prices usually exceeded valuations, more needed to be done to identify property or land that was no longer required. Trusts could also benefit from working more closely with local planning authorities to obtain suitable planning permission as quickly as possible and maximise redevelopment value.
The NAO found that NHS trusts and their agents generally strove to maximise competition among buyers. Prices obtained met or exceeded pre-sale valuations in 95 per cent of sales. There is scope, however, to make more use of estimates of value within a range of prices to reflect uncertainties, and valuations need to be kept more up to date during marketing.
A third of NHS trusts did not review their property portfolio to identify surplus property and report it to the trust board annually. Guidance expects NHS trusts to do this with recommendations on options for improvement, development or sale.
Guidance introduced at the end of 1999 provides a sound basis for managing and rationalising the NHS estate to “exemplar standards”. But just over one-fifth of NHS trusts did not expect to meet these standards until 2002 or later. In part this is due to NHS reorganisation. The Department of Health expects all trusts to meet the exemplar standards by the end of 2002.
There is scope to improve contact with local planning authorities. The report identifies the benefits of on-going contact with local planning authorities to facilitate redevelopment and any eventual disposal of surplus property with associated planning permission. But only 40 per cent of trusts rated the level of on-going contact as high. The level of contact improved during the course of individual sales, but even for sales requiring planning permission, only 70 per cent of trusts described contact as ‘high’.
There is scope to speed up sales and bring forward sales receipts. The time taken to sell surplus NHS trust properties varies considerably even after allowing for size, property type and complexity of the sale. Analysis of sales, together with good practice identified in specific sales, indicates the potential to manage some sales better and more quickly, bringing forward sales receipts and reducing the cost of sales. The report notes that if sales that took over 24 months to complete had been made six months quicker, some £80 million in receipts could have been brought forward (assuming no change in sale prices). The average time to complete sales in this analysis was 14 months, but the range was five weeks to five years.
The report makes twelve recommendations to improve handling and value obtained in disposing of surplus NHS trust property. These are primarily aimed at NHS Estates, an executive agency of the Department of Health, which provides the policy lead and detailed guidance on all aspects of estates management in the NHS.