‘Unimaginative’ hospital trusts urged to lease empty buildings to the private sector in £1billion savings bid


Trusts urged to think more commercially

Hospital buildings could be leased to private firms as the NHS is forced to rent out space to help cut costs.

Speakers at last week's IHEEM Healthcare Estates Conference said that with the Government's NHS shake-up moving care out of hospitals and into communities, estates and facilities managers will have to make hospital buildings more profitable in the future.

And this could mean leasing facilities that are no longer needed to provide an income and stop the practice of money being poured into maintaining parts of the estate no longer needed.

The comments come after it was estimated that 7-8% of the NHS estate is underutilised and 20% of this space is empty. In addition, 16.8% of all buildings are deemed not fit for purpose. If these were to be sold off or leased to a third party, experts say the health service could save in excess of £1billion.

Peter Sellars, head of ProCure21+ and deputy director of the gateway reviews and estates and facilities division at the Department of Health, said: "We are spending a lot of money on underutilised estate every year. If we got to a situation where we were using the estate in the most effective way, we could save millions of pounds. Why shouldn't the estate contribute to the £20billion savings needed in the NHS? From now on, foundation trusts will have to look at estates as a business decision. We need to drive value from the buildings and land the NHS owns.”

NHS commentator and broadcaster, Roy Lilley, added: "Often with estates the bits you don’t want are attached to the bits you do want. The estate has got itself into such a complex mess that we now don’t know what to do. I would lease underutilised estate out to the private sector. We know more people are going to be cared for in the community, and we know the private sector is going to run out of space in the facilities it already has, so why not let them provide elderly care beds, for example, out of buildings the NHS no longer needs? Foundation trusts are unimaginative and can do lots of things they haven't done, but they have just plodded on."

Kevin Oxley, director of operations at North Tees and Hartlepool NHS Foundation Trust, said the trust was already considering leasing out its buildings. He told delegates: "We have started to look at third party occupancy and sharing accommodation with the local authority. What we have to do is leverage value out of the estates we have got, because we will not be building new ones at the same rate as we have been doing.

"We are not going to build our way out of trouble any more so we have to manage the estate we have got better than we ever have done before. We need much more of a commercial approach. Buildings do not have to be used specifically for healthcare. There are many more opportunities, for example disused space could be leased as offices."

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And Paul Kingsmore, president of IHEEM, added: "We are not going to build our way out of trouble any more so we have to manage the estate we have got better than we ever have done before."