David Lawrence, chief executive of healthcare consultancy Inventures (which was acquired by Capita Symonds in February), question whether the strategic property vehicles the government announced in last week’s Budget are the right way forward for the NHS:

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The government has flirted with this policy for a while, including the idea of a sale and lease back of large parts of the civil estate in the hope of a significant capital receipt.

However, previous deals such as PRIME in the Department for Work and Pensions and STEPS in HM Revenue & Customs have failed to fully realise the benefits expected in terms of reducing risk and increasing value for money.

In the NHS the Department of Health’s recent Transforming Community Services initiative floated the idea of strategic property vehicles owning and managing the healthcare estate across the entire health economy as new ventures or variations to the LIFT Company.

However, before the lawyers and accountants start designing the model and deal structures we all need to step back and look at what the NHS needs.

The NHS has seen unprecedented investment. New facilities have replaced old hospitals, health centres and GP surgeries; with many being financed, built and maintained by the private sector.

However the Office of National Statistics has recently published data that shows that, whilst investment in the NHS has increased significantly, there has not been a resultant increase in productivity. We have to accept that:

▪ Investment in new buildings has not generally increased productivity;

▪ Utilisation of NHS buildings (even the new ones!) is often poor;

▪ There is duplication of space between local authorities and the NHS;

▪ Many in the NHS believe that initiatives like PFI and LIFT are expensive given the high transaction costs and are inflexible due to the length of the concession period.

Healthcare, particularly community and primary health care, is changing. The NHS in England has been examining how they will respond to the recession through the Quality, Improvement, Productivity and Prevention (QIPP) programme. Many are undertaking reviews of the capacity of the whole system including the available infrastructure.

If these new strategic property vehicles are to succeed in the NHS they have to start by understanding the core business of the NHS and recognise that the future is largely about what we at Inventures refer to as “Healthcare without walls” – a future with less buildings.

But how will profits be made if the developer doesn’t build anything?

The answer is that the NHS wants a new relationship that incentivises developers who empty buildings and dispose of them  reinvesting  to create an accessible range of services under one roof, branded NHS but with different suppliers (NHS, private and third sectors).

Space will need to be accommodated on flexible terms incorporating adaptable plug and play accommodation. PCT’s will want to commission services from a range of providers without the high cost of a long term commitment to property.

The development of a more mature approach to property management has been successfully delivered in the student accommodation market, where Unite and others have developed the market beyond the traditional lease by the education establishment into a much more flexible model that has the private sector taking much more of the risk.

The question is, can the market deliver this in the NHS?

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