NHSPS Update & Strategic Estate Partnerships


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Slides from my presentation at HEI Southampton on 24th September 2013.

After a canter through some of the teething issues still facing NHS Property Services, I address some of the more creative ways NHS organisations are tackling strategic estate planning through joint venture partnerships with the private sector, with particular focus on hospital retailing and patient hotels

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  • BMA urges NHSPS to underwrite GP premises loans for investment in much needed improvements
  • NHSPS Update & Strategic Estate Partnerships

    1. 1. Update & Strategic Estate Partnerships Lester Wagman Healthcare Environment & Infrastructure Southampton, September 2013 PropCo
    2. 2. NHS PropCo – Principles (recap) • Presumption that assets will be transferred to relevant NHS service providers: - Foundation NHS acute/MH Trusts - Aspirant Community Foundation NHS Trusts • Full lists of property for proposed transfer to these organisations currently under consideration by DH but some Transfer Orders made • All other estate to be transferred to NHS Property Services Ltd. • Likely to include assets formerly held/controlled by PCTs/SHAs: - Administrative/support services buildings - Operational community care property: - in multiple occupation - where the NHS provider is a minority occupier - where the community provider is a non-NHS provider - Operational primary care property, e.g. some GP surgeries - NHS interests in established JVs such as LIFT Cos - Surplus property (Trusts encouraged to release this ASAP to support HCA new homes initiative) 2
    3. 3. What needs to be done (recap)? Nationally • Structure of eventual PropCo(s) - Role of LIFTcos - Governance arrangements - Interim resource planning • Procurement process • Transfer orders Locally/Regionally • Housekeeping - Compliance/Backlog maintenance - Transfer/novation of contracts - Lease management issues • Strategic estate planning - JVs & SEPs - Shared/divided sites - Capital programme - Transfer valuations 3
    4. 4. Update Nov 2012 Letter from Simon Holden (CEO) „Core‟ landlord and advisory services that Primary Care Trust estates teams currently provide or manage: • Strategic estates management • ƒ Property management advice • The operational delivery of [property] services: • Refurbishment and maintenance • Emergency/on-call repairs • Quality assurance • Compliance with statutory regulations (such as fire, asbestos) • Non-urgent breakdowns (electrical, mechanical, building) • Planned preventative maintenance • Health and safety, fire safety and risk assessment (landlord only) • Mechanical and engineering services 4
    5. 5. • ƒ Charles Howeson, Chair • ƒ Simon Holden, Chief Executive • ƒ Caroline Rassell, Finance Director • ƒ Pamela Chapman, Acting Director of Asset Management • ƒ Alan Farmer, Director of Corporate Services • ƒ Andrew Millward, Acting Director of Communications and Business Services • ƒ Chief Operating Officer, Vacant • ƒ Kathryn Berry, Regional Director, North • ƒ Martin Royal, Regional Director, Midlands and East • ƒ Tony Griffiths, Regional Director, London • ƒ James Wakeham, Regional Director, South 5 Update April 2013 Leadership team in place:
    6. 6. Update 2 April 2013 Letter from Peter Coates (on behalf of Secretary of State) To: landlords, sponsors and/or funders Setting the Scene • On 31st March 2013, Primary Care Trusts ceased to exist • A significant number of properties previously owned or leased by Primary Care Trusts (together with all resulting liabilities) will transfer to NHSPS • The Secretary of State for Health holds all of the shares in NHSPS Statement of Principle • SoS acknowledges fundamental importance of…good quality premises [for primary health] • enshrined in NHS Constitution pledge : • “services provided in clean and safe environment that is fit for purpose, based on national best practice”. 6
    7. 7. Update 2 April 2013 Letter from Peter Coates (on behalf of Secretary of State) To: landlords, sponsors and/or funders NHS PS Role & Responsibility • NHSPS to manage NHS' interest in large number of properties as best way of ensuring a coherent strategy during the period of transition 7 Mixed Message • NHSPS is not subject to s.70 of NHS Act 2006 (any outstanding liabilities of a PCT would survive dissolution) – Gulp! • “However, it would be wrong to think that this signifies any reduction in the commitment of SoS to the assets and liabilities that NHSPS will inherit”
    8. 8. Update 2 April 2013 Letter from Peter Coates (on behalf of Secretary of State) To: landlords, sponsors and/or funders SoS Role & Responsibility • SoS is sole shareholder in NHSPS - role taken very seriously • Departmental director appointed to the board - governance protocol requires approval of director to all board resolutions • SoS will continue to ensure the continued good running of NHSPS & responsibility of directors 8 “Untenable” that SoS would: a) Allow NHSPS to run at risk of administration/insolvency b) Not take any action to remedy administration/insolvency c) Wind up NHSPS without first transferring assets to “entity of equal covenant strength” (i.e. another NHS company, NCB or CCGs)
    9. 9. Update 2 April 2013 Letter from Peter Coates (on behalf of Secretary of State) Explanation of funding for NHSPS • PCT PFI properties yet to transfer but interim budget funding arrangements now in place - NHSPS entitled to receive any sub- lease income - NHS CB or relevant CCGs to meet any funding shortfall • Post 2015 Primary Care PFIs “will be funded increasingly directly by the occupants” • “It is recognised that the occupants' contracts for providing services to the NHS will need to be funded appropriately” • “The anticipated move towards payments flowing increasingly through occupants is to incentivise the system to optimise property utilisation and value for money”. 9
    10. 10. The official view 10
    11. 11. From the coal face • Land registry transfers went “eerily quietly” • Some anomalies have emerged - some things may have gone to wrong place • Little or no activity on disposals or asset management • Estates services still being provided to NHSPS by some transferor (acute/MH) Trusts • Resourcing - area team leaders in place but NHSPS still recruiting 11
    12. 12. From an outsider’s perspective • Capacity Struggle • 30-40 Local Area Team Co-ordinators appointed by NHSPS • Interaction with NCB & CCGs still unclear • GPs rushing to get leases in place [or not in some cases] • DH focus on making sure Transfer orders in place • Traffic light triage of transfer risk issues: 1st 100 days, 2nd 100 days etc. • CHP has similar issues with LIFT estate • NHSPS likely to be looking for „quick wins‟ but • Nothing controversial expected pre-election! 12
    13. 13. All Going Well? • Some assets may have gone to wrong place • Some sweeper provisions in place • Legal charges vis a vis capital grant agreements • Option to tax (VAT)? • SDLT? • Interim funding announced for 2013/4 but funding gaps emerging - commissioners to take on in short term • HCA Public Land Programme • Funding of GP premises impovements 13
    14. 14. What is a Strategic Estate Partnership? • No single definition • Often whole estate PPP principle • Can be specific assets with option to widen scope • Assets taken off balance sheet but can be just contractual • Often includes asset management and [some] FM • Can also include healthcare & support services • Private sector partner brings development skills & finance • With agreement can be extended to include other public sector assets 14
    15. 15. SEP spectrum? • Contractual/framework (e.g. Lancashire) • Limited asset (e.g. Southend, Yeovil, Salisbury) • Scheme specific (e.g. Cambridge, Kings College) • Sample scheme led (e.g. CWP, IoW) 15
    16. 16. Southampton CEDP • MERA • Parking • PPU • Patient Hotel 16
    17. 17. Patient Hotels • Planned early admissions • Patients waiting discharge • Relatives and friends 17
    18. 18. Patient Hotels 18 • Should there be any ongoing nursing care be provided? • If so, who should provide this and what should be their responsibility? • Should an emergency call button be provided? • If so, who should respond and what should be their responsibility? • How long should the patient be allowed to stay • What happens at the end of this period? • Who will pay for their accommodation, meals and care (and for how long)? • Who will be responsible for the maintenance of the environment? • Who will be responsible for the provision of hotel services? • Under what circumstances and who decides if the patient should be readmitted to hospital?
    19. 19. Commercial Option • Forecast room commitment • Fixed discounted day rate • Accounting period adjustment 19
    20. 20. Discussion COPYRIGHT © JONES LANG LASALLE IP, INC. 2011