The Naylor Review

03/04/2017

Rob Harrison

Rob Harrison

Partner

It has been over a year since Sir Robert Naylor was appointed the NHS Property tsar and for the last six months those involved in NHS Property have been eagerly awaiting the outcome of his review. The review was finally published on 31 March. This is an interesting choice of publication date – not only was it the last day of the NHS financial year and therefore one of the busiest days for NHS disposals (we sold over £60m of NHS Property on 31st March acting on ten separate disposals for NHS clients) it also, very helpfully, sets the scene for the new NHS financial year.

A key question the review needed to address was how can the NHS Estate contribute to the delivery of STPs and the NHS 5 Year Forward View? Sir Robert does not disappoint in this regard and makes it very clear that:

  • the NHS Estate transformation "must follow the service strategies evolving through the STPs"; and
  • "without investment in the NHS estate the 5 Year Forward View cannot be delivered".

There are 17 recommendations across three key themes - improving capability and capacity; encouraging and incentivising local action and funding and national planning. Key highlights include:

  • £10bn is required for investing in the NHS estate and £5bn (at least) for backlog maintenance
  • Filling the funding gap via large scale disposal programme, private capital and Treasury funding.
  • The establishment of an NHS Property Board to provider overall strategic leadership across the NHS estate.
  • Incentives to unlock the barriers preventing NHS Providers from realising best value from their estate
  • Reaffirmation that the NHS estate can make a contribution to delivering 26,000 new homes
  • It supports the delivery of the Department of Health's target of releasing £2bn of assets (potentially rising to £5.7bn)
  • Calls for urgent action to accelerate the disposal of a large number of small scale and low risk sites

This is a well-informed report briefly setting out the extent of the issues and problems facing the NHS estate. Sir Robert clearly fully understands the issues and historic problems that have prevented an overall coherent strategy. He recognises that the ownership of the NHS estate is fragmented – this being one of the root causes of the lack of strategy – hence the need for the new NHS Property Board.

It was interesting to note Sir Robert considered the idea of bringing ownership of the estate under one organisation but such a change would be almost impossible to implement – a very sensible approach (Bevan Brittan were the lead legal adviser in 2013 in respect of the transfer of over 6000 properties from former PCTs to NHS Property Services, Community Health Partnerships and Acute and Foundation NHS Trusts – a significant undertaking involving only 10% of the NHS estate).

There is a passing reference that the new NHS Property Board is to consider if "the functions and residual assets it inherits from the abolition of PCT should be divested back to providers". If this recommendation was implemented this would result in NHS Property Services and Community Health Partnerships no longer owning assets and a reversal of the 2013 changes. This element of the review clearly needs further thought and consideration.

A large part of the review focuses on disposals being the key element of meeting the funding gap. Some parts of the NHS have already been very successful in this regard but due to the operation of an often siloed approach many Trusts lack the incentives to truly deliver on estate transformation – Sir Robert attempts to provide these incentives by the introduction of a 2 for 1 offer matching public funds with disposal receipts.

It is important Trusts do not wait for further detail of the 2 for 1 offer to materialise before embarking on a disposal programme. It takes time for investments to properly yield best value from disposals and adopt the "commercial approach" suggested in Sir Robert's review. Barriers are not all within the Trust's control – for example, will it be necessary to amend planning policy? – Planning processes have often been the cause of delay and difficulties in the implementation of a disposal programme.  

In anticipation of the outcomes suggested in the report we have developed a disposals toolkit to help Trusts implement the recommendation in the review. Please visit this link to register an interest in obtaining this Toolkit.

If you would like to discuss the content of the review further and how we can help you with disposal of NHS property please contact one of specialist Property partners: Rob Harrison, James Atkins or Ian Caplan.

 

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