The NHS Estate: Themes from Sustainability and Transformation Plans

Introduction

Over the last few months, STP footprints across the country have been publishing draft plans for the sustainability and transformation of the health and social care system in their geographic areas. The plans set out how each STP will make most effective use of available resources, address key gaps in provision and deliver safe and sustainable health and care services. Many of the plans are innovative, ambitious and some may be contentious.

We have been analysing a number of draft plans and talking to our clients to identify the key themes for the NHS and wider public estate.

 

Key Themes

"Place" at the heart of the STP

The concept of "place" is at the heart of a number of STPs. Care systems will be re-designed with a whole population, place based approach rather than along existing organisational lines.  All plans evidence an intention to adopt new models of care and a number specifically refer to Accountable Care Organisations, which will have responsibility for delivery of health and social care to a whole-population within a defined geography.

But "place" does not mean a particular acute hospital or healthcare facility. Most plans directly refer to a continued move towards the provision of integrated care services at home or in community settings and many of them call for a rationalisation of estate across the STP patch. An appropriate and fit-for purpose estate underpins the place based approach to service commissioning and delivery.

Dealing with fragmentation

A number of plans recognise that fragmentation of estate ownership is an obstacle to successful implementation of the STP.

For any STP footprint, health and social care estate may be owned or leased by provider Trusts or Foundation Trusts, NHS Property Services Limited, Community Health Partnerships Limited, the Local Authority, GPs, private or voluntary sector providers or others. Such significant fragmentation poses a barrier to effective implementation of reconfiguration plans across the STP footprint.

Most plans recognise that an STP wide estates strategy and implementation group is needed in order to ensure that these challenges are overcome. There are likely to need to be mechanisms for gainshare and pain share on estates related efficiency savings or investment costs. In many cases, integrated estates functions across organisations are considered to be a sensible mechanism for both delivering on a joint strategy and delivering efficiencies.

Some plans recognise the potential for a Strategic Estates Partnership (or "SEP") across the whole or part of the STP to overcome fragmentation issues and deliver capital investment. Unfortunately, other plans barely make any mention of the estate, except to identify it as infrastructure necessary to support the STP.

Investment in new or improved facilities

Almost all plans identify the need for some investment in new or improved healthcare facilities. In particular, we identified a number of STPs that intend to invest in new or upgraded maternity facilities, as part of their strategy for improving outcomes from maternity services, and a number that intend to invest in new or reconfigured urgent or emergency care facilities, as part of the redesign of urgent care pathways. Our clients also tell us that targeted capital investment in their estates will be an important element of implementing STPs.

In addition, and driven by the necessity to better integrate health and social care, many STP patches intend to invest in the development of extra-care housing or step-down facilities. Effectively connecting health, social care and housing will continue to be an important theme in managing patients with long-term conditions.

This investment in new or improved facilities will require capital investment, which may come from the rationalisation of other estate across the STP, sustainability and transformation funding or from external sources (e.g. future PPP or SEP models).

The general practice estate

Premises used for general or personal medical services are very unlikely to be owned by NHS bodies within the STP footprint. The majority of the general practice estate is owned by GPs or leased by GPs from private sector landlords, NHS PS or CHP. However, GP premises are funded by the NHS via the NHS (General Medical Services – Premises Costs) Directions 2013, with payments being made by either NHS England or CCGs, depending on co-commissioning arrangements.

Given that almost all STPs support the continued move towards greater provision of services outside of acute hospitals, effective utilisation of the GP estate will be a key enabler of the implementation of clinical strategy. In addition, a number of plans make specific reference to NHS England's Estates and Technology Transformation Fund (the ETTF) as an important source of capital into the STP footprint for the development of new GP premises (that also allow multi-functional clinical use) or the improvement of existing GP estate.

The systematic move to new models of care, including commissioning of MCPs and PACs, is likely to have a profound effect on the funding and ownership of GP estate, with some STP patches suggesting that they will investigate alternative future ownership models for GP premises.

One Public Estate

While this note focuses on the key themes of STPs for the health estate, many STPs recognise that integration with local authorities requires a renewed emphasis on sharing estate across bodies as part of a unified strategy. The LGA and Government Property Unit's One Public Estate programme is referenced by a number of STPs as a supporting process, allowing system wide efficiency savings.

Estates Rationalisation

Inevitably, given both the financial challenges faced by the NHS and the clinical delivery changes proposed by STPs, there will continue to be a focus on estate rationalisation where appropriate. This will mean the sale of freehold sites by STP participants or the disposal of leasehold estate by the exercise of break clauses, surrender or assignment. In all cases, the rationalisation must form part of the STP estates strategy and in order to speed up implementation STPs may need to develop agreed gainshare proposals for resulting capital receipts and revenue savings. 

 

Options for implementation

As STP plans become more mature and are formally adopted, the implementation phase will begin in earnest against challenging centrally imposed timeframes. Each STP's estates plan will form its evolving implementation strategy and we expect will be built upon work carried out by CHP and NHS PS as part of their CCG Strategic Estates Planning exercise last year.

In our view, STPs will face a broad choice between either:

• using, in part or in whole, an overarching estates delivery vehicle such as a SEP joint venture or a future PPP structure (as referred to in the Five Year Forward View); or
• implementation of their strategy on a project-by-project basis, without any new organisational form, but with appropriate governance and decision-making processes and mechanisms to appropriately share estates related costs and benefits across the system

 

How Bevan Brittan can help

Bevan Brittan is a leading provider of legal advice to the health, social care and social housing sectors. We work with NHS bodies, local authorities and social housing providers on implementation of estates projects and so are uniquely placed to support STPs on estates issues across entire geographic areas.

In particular, we have:

• a detailed understanding of the objectives of STPs, together with the funding constraints and operational environment within which each will operate
• acted on the Strategic Estates Partnerships that have been established in the NHS to enable NHS bodies to work with private sector partners on the delivery of a pipeline of estates projects
• particular expertise of the funding and development of GP premises (including the Premises Costs Directions and ETTF) and, as a result, are well placed to offer strategic advice on alternative models of GP estate ownership and operation
• a proven track record of delivering the day-to-day implementation work that will be necessary for STPs, such as portfolio analysis, the exercise of lease breaks, site disposals and other similar transactions

For more information or to arrange an initial discussion, please get in touch with James Aktins or Ian Caplan.