Why are local estate strategies so difficult to implement and how can the common issues be resolved? - DAC Beachcroft

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Why are local estate strategies so difficult to implement and how can the common issues be resolved?

Published On: 15 September 2016

CCGs have the responsibility for the co-ordination of health strategies across the NHS estate. As part of this role a CCG can specify the premises from which the service being tendered will be delivered. The easy part is specifying which premises the services should be delivered from. Getting an NHS Trust to relinquish its estate to allow you to implement your strategy is where the difficulties lie.

It helps to understand why there are these difficulties and we think there are several issues at play:

Firstly, whilst CCGs have powers to acquire and dispose of property, they have no powers to legally compel the NHS Trust to relinquish its estate. The power to compel a body to give up its property is an extremely onerous one and we can see why there would be a reluctance to grant it - that said without it the CCGs powers have no teeth.

Secondly, NHS Trusts are operating in an increasingly commercial environment and being tasked with driving efficiencies through their estates - something which will make them resistant to relinquishing ownership of part of their estate where they may have larger scale more lucrative development plans for its development in the future.

Thirdly, NHS Trusts are continuingly being propelled to act as commercially successful financial entities within a diverse healthcare market. With this increased commerciality comes an awareness that the ownership of premises in strategic locations provides a procurement advantage that private sector competitors would not relinquish. Imagine for example if the CCG required a private sector provider to give up its premises because it wished to re-procure the services from them.

So what can the CCG do if it wishes for services to be provided from an NHS Trust's premises but the NHS Trust is resistant to the idea?

Firstly, if the NHS Trust is an Foundation Trust then it is worth pointing out to the Foundation Trust that under the terms of its Licence it must not act in a way which is detrimental to the ability to provide integrated services;

Secondly, the CCG can always try to bring political pressure to bear on the NHS Trust in that it would be viewed badly by the Department of Health if an NHS Trust did obstruct the CCG from carrying out its strategic role;

Thirdly, the CCG should be aware that there may be other relationship pressures at play. If the NHS Trust is to relinquish its control of the premises for the term of the service contract it will want to do this on commercial terms. If, as part of your discussions with the NHS Trust you have been suggesting that a third party takes an intermediary lease of the NHS Trust's premises on that third party's standard terms, then this may cause extra layers of commercial difficulty. These layers could easily be removed if the CCG, instead of the third party provider, was to negotiate a commercial lease of the premises with the NHS Trust on standard commercial terms and then underlet to the successful provider.

That said, for CCGs to successfully and efficiently deliver estate strategies there needs to be a huge change in how the NHS estate is run and a significant extension of the CCGs existing legal powers to acquire and dispose of property.