Healthcare estate becomes the focus after General Election

Could the NHS estate hold the key to cutting spiralling healthcare costs?

Following last week’s General Election, the focus is firmly back on the NHS estate and how it can help to cut spiralling healthcare costs and improve the wider economy.

With the Conservatives now in sole power, The King’s Fund health think tank is calling for a ‘properly-resourced transformation fund’ to support the large-scale change outlined in the NHS Five Year Forward View.

And it claims that some of the cash for this fund will come from unlocking value within the NHS estate.

It seems that the resources immediately available won’t be enough, not least as the NHS needs resources right now

According to data submitted to the Department of Health in 2014, just over 650 hectares of NHS trust and foundation trust estate – the equivalent of around 910 football pitches – was surplus or potentially surplus. In addition, NHS Property Services lists 59 sites, mostly primary care facilities, as available for disposal.

The King’s Fund estimates the surplus land immediately saleable has a value of around £700m. Vacant or underused estate that could be released in the medium term is worth approximately another £700m; and there is potential for more cash to be generated in the long term.

However, there are some practical obstacles to unlocking the value in surplus estate and, more worryingly, there is little incentive for organisations to release surplus land and buildings if they are unable to retain the proceeds locally. Currently, foundation trusts for the most part can keep capital receipts generated by the sale of land, but this money often goes towards service development rather than transformation.

Lillie Dunn, a fellow in health policy at The King’s Fund, said: “It seems that the resources immediately available won’t be enough, not least as the NHS needs resources right now. However, the potential for unlocking additional value from the estate over the longer term should not be underestimated.

“There may also be some innovative approaches to generating revenue from this estate, working with other local organisations or the private sector to develop and/or lease out estate no longer needed by the NHS. There are some examples of this happening already, but much more work is needed to fully understand the nature and scale of these opportunities.”

This is a view shared by her colleague, David Buck, a senior fellow for public health and inequalities. He said: “The first months after an election are the best time for politicians to engage with policies that are likely to deliver long-term benefits, rather than short-term political capital.

The potential for unlocking additional value from the estate over the longer term should not be underestimated

“Let’s hope the silence on public health during the election campaign is not a signal of inaction once those in the new government properly take their seats.”

If increased focus is placed on enhancing the current NHS estate, this will be welcome news for the medical construction sector after recent months have seen a cooling in activity.

Allan Wilén, economics director at construction analyst, Glenigan, told BBH: “The Glenigan Index recorded a marked drop in project starts as private sector developers postponed decisions in the run-up to the general election and government-funded projects were caught up in the traditional pre-election hiatus.

“With the votes now cast and the Conservatives forming the next government with a small majority, the short-term political uncertainties have now eased.

“Moving forward, public-sector capital expenditure programmes are likely to be squeezed hard as the new government strives to deliver its planned reduction in the Budget deficit.”

But he warned that with a ‘wafer-thin majority’, it was ‘vital’ the government builds cross-party support to ensure that important long-term decisions, such as HS2 and additional airport capacity in the South East, are not stymied by local Conservative backbenchers.

As well as dealing with backlog maintenance and estates rationalisation, the result of the General Election has also led to calls for a new approach to funding health and social care services.

Graham Roberts, chief executive of property developer, Assura, said: “There were a number of encouraging features of the Five Year Forward View, which have been supported throughout the Conservative manifesto: namely the integration of health and social care and the increased investment in primary care resources.

My hope is that the prioritisation of frontline care as a means of reducing and preventing the current stress and expense felt in secondary services continues for the duration of this government, and garners the predicted results.

“In terms of the integration strategy, it is now for developers and investors to focus their offering and make the transition as seamless as possible for practitioners and other health professionals nationwide.

“It is by creating multifunctional health hubs that we can address the broadest-possible spectrum of patient needs and move towards a more-efficient health service.

“Now is the time to move away from inflaming political tensions and pay attention to the patients and staff requiring improved resources. It is now time to put words into actions and we are looking forward to working with health and social care providers to build a joined-up health service that makes the most of its workforce’s talents.”

Speaking after Thursday’s vote, Dr Jennifer Dixon, chief executive of the Health Foundation, added: “The new Secretary of State for Health should work to three main objectives for the NHS moving forward – maintain or improve quality, transform care for the future, and achieve financial balance.

“Better-quality care often results in lower cost, but quality of care should win out if trade-offs are to be made. The Secretary of State should work constructively with frontline staff and managers rather than adversarially and commit to no administrative reorganisation.”

The first months after an election are the best time for politicians to engage with policies that are likely to deliver long-term benefits, rather than short-term political capital

And Julie Wood, director of NHS Clinical Commissioners, said: “It will be crucial that the next government maintains a stable and certain environment in the NHS that enables clinical commissioning groups to continue to transform care and improve health outcomes for their local populations.”

And Dr Maureen Baker, chairman of the Royal College of GPs said more emphasis needed to be placed on shifting the burden of care from acute hospitals to community-based services.

She said: “Along with more GPs, the new government must make sure that general practice receives 11% of the NHS budget over the course of the parliament.”

This is supported by Edmund Stubbs, a healthcare researcher at community research body, Civitas. He said: “To give some hope for the future sustainability of the NHS, healthcare policies need to move away from flashing blue lights and multi-bed hospitals and instead focus on individuals’ lifestyles and care in the community.

“We need to ensure people avoid becoming ill in the first place or that, when unwell, they have their conditions well managed to avoid medical emergencies and hospitalisations which put patients in danger and cost the NHS large amounts of money.”

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