How to make creative use of the NHS estate

1. Making creative use of NHS estate
Peter Molyneux
Common Cause Consulting
4 June 2014

2. • Land surplus to requirements
• Lodge with public land registry for 50 days
• If NHS or other public body interested then transferred or
sold at NPV.
• If not marketing agent instructed and sealed bids sought.
• Bids assessed and received by District Valuer
• Highest bid accepted.
NHS land disposal process

3. • Land surplus to requirements
• Foundation Trusts must operate within risk assessment
framework.
• Decision may require approval from the Board and Council
of Governors.
• NHS Trusts are entitled to keep proceeds up to £5m.
• Over £10m a business case is required.
• Up to £50m a business case for investment must receive
NHS TDA approval.
• Over £50m DH and Treasury approval is required.
Rules on assets

5. • Low financial risk
• Raises fixed capital sum quickly – for investment in new
facilities
• Overage partly recoups uplift from development
• Trust loses equity in perpetuity
• Trust loses control over development and development of
community infrastructure is difficult
• Early sale may reduce income and cost control needs to be
robust to limit risk of overrun.
Release value of land at outset

7. • Surplus land is exchanged for new mental health facilities.
• Financial certainty is delivered early – design certainty also
needs to be delivered early.
• Trust is not distracted from core purpose.
• Financial failure of selected purchaser.
• Trust is very dependent on purchaser delivering on
obligations
Cross-subsidy with single partner

9. • Selection of right partner will share burden of optimised
delivery of the whole
• Control maintained over timing and sequencing of the
whole development and community development.
• Sales values maximised.
• JV structure could be used to incentivise the delivery of
holistic best value.
• Income at risk from market fluctuations.
Single flexible partner, release in phases
using open supply chain

11. • Selection of right partner will share burden of optimised
delivery of the whole
• Financial risks and workload are shared.
• Opportunity to engage or involve community partners in
the consortium – which can also hide / reduce value of
cross subsidy.
• Risk share may reduce outturn value to the Trust for cross
subsidy.
• Delivery of best value in discrete elements may not deliver
best value overall.
Consortium approach to whole of planning consent

12. • Housing associations should have a clear service offer that
is measurable, tradeable and marketable.
• Understand service transformation and CIP programmes
and how they can help with them.
• Understand land disposal plans of local Trusts and appetite
for disposals or JVs
• Understand proposals of local authority.
Making an approach