March 2017 saw the publication of a key report which analyses some of the current issues facing the NHS estate, and sets out a series of recommendations to address some of the most enduring issues facing NHS estates professionals: “NHS Property and Estates: why the estate matters for patients: An independent report by Sir Robert Naylor for the Secretary of State for Health 1 .”
Sir Robert was appointed as the Government’s adviser on NHS property and estates in February 2016. The review fulfils the task set by NHS productivity minister Lord Prior of Brampton, who said on Sir Robert’s appointment that his extensive NHS experience:
“… will mean the NHS is better positioned to use its land and buildings more efficiently. Our aim is to secure a major contribution to the government’s housing ambitions and develop a modern, up-to-date health estate.”
The report is relatively short, succinct and is well worth a detailed read, particularly as it places great emphasis on the need for rapid action both in short term operational improvements and that a robust capital investment plan for the NHS is being prepared for later in 2017.
The report highlights the importance of developing a modern fit for purpose estate, releasing unneeded land for maximum impact, increasing efficiency and addressing backlog maintenance. It also clearly flags a link with housing, as Lord Prior’s statement above shows.
It makes 17 recommendations across capability, strategic planning and driving more efficient decision-making including a national approach to master planning and increasing skills and capacity. It identifies a likely capital requirement of £10 billion to address backlog maintenance and meet local service transformation plans, and sets out plans to reach the Department of Health objectives for the estate to release £2bn of assets for reinvestment in the short term, and deliver land for 26,000 new homes by 2020. Although additional funds for capital investment are likely to be made available, only those who can show “stretching plans” and can demonstrate how they would improve performance against benchmarks are likely to be able to access this.
NHS bodies should be working through how they can take advantage of the proposed changes in order to maximise their use of their estate, particularly its linkages to service delivery now and in the future, how their own performance compares to the most efficient, and how they can use unneeded estate to generate funds including releasing funds and land to address another pressing NHS challenge – that around the availability of housing for NHS staff.
It is clear that there will be a drive to implement the recommendations as quickly as possible, and strong pressure on estates professionals to support local service planning and to make efficiency gains and free up resources wherever possible.
The Government’s Response
The Government welcomed the review and had already accepted many of the key emerging recommendations including identifying a £325 million capital investment over the next 3 years to support the development of estates-related components of local STPs, and signalling an intention to consider further investment later in the year. It is already developing an incentive scheme to guarantee that proceeds of sales are available for reinvestment.
Connecting the Estate to Strategic Service Development
Those of us who worked for the Department of Health, NHS Estates and the NHS over the years will be familiar with historical efforts to strengthen the estate and will have their own views on their comparative merits and success. Sir Robert makes it clear that development of the estate has lacked a sufficient link to the demands of service provision.
The report therefore examines how the NHS can make the best use of its estate to support NHS England’s Five Year Forward View. It highlights the importance of by making the best possible use of the NHS’s assets to support local Sustainability and Transformation Plans (STPs).
Rightly, the report makes it clear that the estate must be strongly and strategically connected to the delivery of services for patients – hence the inclusion in the title of the phrase: “why the estate matters for patients”.
“The NHS estate is one of the key enablers to change in the health system and directly contributes to the delivery of high quality healthcare to patients. It is also a significant source of untapped value.”
It goes on to discuss how the successful implementation of the Five Year Vision for the NHS and each local area’s STP is dependent on the local estate – and therefore on the skills and connectedness of local estates professionals.
The report recognises that whilst the Five Year Vision may not explicitly discuss the estate, it does emphasise the importance of creating more appropriate models of care. STPs should have a capital strategy that will create an affordable infrastructure to underpin the Five Year Vision, including robustly addressing backlog maintenance.
Some of these needs will require a shift of services out of traditional settings – and therefore the NHS’s estate will need to shift to reflect this. Where the existing estate cannot flex to achieve this, it must be disposed of as advantageously as possible to release money, and new types of facilities must be developed:
“…it will not be possible for the NHS to achieve its vision without changes in the estate”
Addressing backlog maintenance and reaching the standards of the best
Naylor is understandably keen to speed up the actions already put in train as a result of the Carter Report, which shone a spotlight on the wide variations in performance in the way that the estate is used.
The Carter Review considered in some detail where acute trusts were not making best use of their facilities, and what the implications might be if all NHS bodies met the standards achieved by the most effective. The Naylor Review builds on this and considers usage and costs in some detail.
Naylor’s report discusses the on-going high levels of backlog maintenance, and that this appears to have risen 9% between 2014/15 and 2015/16 to around £5bn, with £1.5bn of this in London. Even more worrying, the Naylor report analysis suggests that the figures have risen even faster in critical estates functions. The report recognises that even these figures may be under reported, due to the lack of incentive in the current system to provide a full and comprehensive picture. Further, the current ERIC data collection does not collect the level of detail required to make robust decisions for the future.
“It is clear that there still is a driving need to modernise the estate. Dealing with the challenge of significant levels of backlog maintenance is a priority for the future estates strategy.”
Naylor’s analysis suggests that opportunities exist in the short term to make running cost savings and to cut out waste through better utilisation of existing premises, even before rationalisation of the estate.
Estates Strategies and a new national approach
Naylor commissioned The King’s Fund to undertake an evidence review on the current state of estates strategy in the NHS, and the key components of a comprehensive approach to strategic planning. This analysis concluded that there were many weaknesses in the current strategy for the NHS’s estate:
- No overarching NHS estates strategy
- Lack of clarity about where leadership for such a strategy might lie
- Skills focus on technical knowledge and project management rather than on strategy-setting
- The health sector is often absent from local partnerships focused on local property issues
Although Naylor and the King’s Fund highlight that capacity and skills may have been dropping in the NHS, it does recognise that the NHS, including NHS property companies, does have a considerable body of expertise and that this should be utilised to better effect.
The King’s Fund goes on to identify the following key elements that will be required to enable the development of a robust estates strategy for the NHS:
- A clear, long-term vision for the NHS that the estates strategy can therefore support
- Clear leadership and accountability
- Stronger understanding of the nature of the current NHS estate, including ownership as their analysis had highlighted a lack of clarity about this
- Stronger governance and decision-making processes right across the system
- The capacity to contribute to the creation of more homes
The national plan should aim to maximise value for money and make a detailed case for securing both the public and private investment the NHS needs. The report makes it clear that this investment is likely to be substantial – possibly around £10 billion simply in the medium term – and flags that there are three potential sources of this funding: property disposals, private capital (apparently limited to primary care) – and from Central Government.
A national plan and a national body
Naylor concluded that more action is needed to improve capability and capacity within the system to provide leadership, strategic direction, drive delivery and provide greater levels of guidance and support to local systems. It will also be looking at improving guidance on a wide range of issues and improving the way that data is used – including the future development of benchmarking.
A greater degree of centralisation is therefore inevitable. Although apparently the Review considered the options, it has not recommended more radical, more centralised changes in ownership and control. Nonetheless, to address the key challenges identified in the review, one of the most significant recommendations is the creation of a new, single, property organisation for the NHS.
It looks as if a shadow form will be set up quickly, and it will come formally into being by April 2018. The new entity is likely to be at arm’s length from the Department of Health, including a regional structure and will have the key role of acting as the primary voice on estates matters, including linking to local STPs to help to ensure that the estate does indeed re-shape to enable the delivery of new models of care for the future. It is likely to bring together existing NHS property-related functions into a single entity.
As well as recognising the need for a national overview, the report also recognises the toll that years of change have had on the NHS’s capacity, with an erosion of skills and capacity and increasing reliance on the private sector. This is particularly the case at national and regional level, which is no longer able to provide the required strategic overview and master planning of such a huge and complex estate.
It is perhaps fitting that the announcement of the new NHS property body was made in response to a Question in the House of Lords raised by Lord Hunt, the former Health Minister who had a significant role in the promotion and development of estates and facilities issues at the time of the NHS Plan:
“The Department is developing plans to establish a new National Health Service property organisation, in response to early recommendations made by Sir Robert Naylor’s on-going review of the NHS estate. We are committed to ensuring that the new organisation fully supports and reflects the needs and priorities of the NHS.
“A key function of the new organisation will be to provide a single strengthened source of strategic estates planning expertise for the NHS. This will build on the support that existing teams in NHS Property Services and Community Health Partnerships have been providing to the NHS locally, including in the development of estates proposals as part of sustainability and transformation plans. An external consultant has been appointed to support us in this work.
“Further details on the proposed new organisation, including its organisational form and models for its future ownership, will be set out in due course”.
A key element in tackling backlog maintenance is to consider whether the estate in question is needed at all – or can be significantly reconfigured. As Carter argued, major year on year revenue savings can be identified through a shift to smaller buildings.
The new body will also be looking at how to encourage and incentivise action locally to enable estates professionals to better match the estate to the current and future needs of the NHS, as set out in STPs.
The Review highlights the way that existing incentives work. The fact that individual NHS bodies have a relatively high level of autonomy in the use of their estate, including levels of investment and issues around disposal means each local organisation considers its own specific needs in decision-making. The Review lists the key influences on decision-making, and concludes that although in theory these collectively should encourage NHS bodies to release estate to add value, in practice they tend to hold on to land until they themselves need it to build new local facilities. The timing of any sales are also driven by a quite understandable desire to sell only when the market is at its highest.
The Report recommends a form of “two for one” offer to incentivise land disposals.
The Review highlights the connection between the release of unneeded land and buildings and the creation of new housing. As well as emphasising the benefits for patients, there is a continual thread throughout the report that the estate “is also a significant source of untapped value.”
As NHS estates professionals will be well aware, access to appropriate, affordable local housing is an on-going challenge for many NHS staff and affects recruitment and retention. Further, people’s living circumstances have a fundamental impact on their health and wellbeing and hence their use of health care services – including unplanned admissions. The report concludes that the NHS could release estate valued at a risk-adjusted figure of £2.7 billion – which could rise significantly if the NHS took a more commercial approach to obtaining planning consent, negotiating affordable housing quotas and maximising value from key London sites. One of the key recommendations is that land that the NHS identifies as surplus should be prioritised for the development of residential homes for NHS staff.
Looking to the future
Those of us who remember – or indeed were part of – the old NHS Estates will be watching with interest to see how this new organisation can address some of the enduring weaknesses many of us have found in linking physical assets and long-term investments to the often fast moving world of providing services.
It is clear that the estate must as far as is possible meet the needs of:
- Supporting the delivery of effective, safe and high quality patient care, now and into the foreseeable future
- Enabling the NHS to embrace new ways of working, through new models of care and better use of technology
- Enabling staff to give of their best, by providing them with high quality facilities that help them work but also provide an environment that supports their wellbeing – the NHS is also grappling with the need to address issues around recruitment, retention and the loss of valuable staff through preventable health issues, particularly around mental wellbeing and Musculo-skeletal problems
- Securing the best possible financial return for the NHS, both through efficient running, careful maintenance and through the most effective disposal routes, particularly if re-use can feed back into health care benefits through providing innovative new facilities, collaborations with other local partners, securing affordable housing for NHS staff and reducing the huge physical and mental healthcare toll on people living in inappropriate housing
We welcome Naylor’s report and the impetus he is giving to strengthening strategic thinking and investment and the crucial role the estate and estates professionals play in delivering a modern, efficient health care system.
How HFC can help
Those NHS bodies that have given careful thought to their existing estate and how they could strengthen its strategic fit with clinical care are likely to be in a stronger position to make the case for a slice of any such investments. It also looks likely that capital funding may not be readily accessible to local health economies that cannot show how they are going to strengthen their performance against key benchmarks.
HFC offers a range of services to support NHS bodies including accredited training through our training partner Grovenbridge Academy, all of which are available at a 50% discount to delegates from Trusts that are HFC Members. These include:
- CELL Level 3 Award in Estates and Facilities Information Management - Driving Cost Improvement: a one day introductory course designed to inform and reinforce the importance of facilities information, generated from a range of sources already available within NHS Trusts, in the cost effective provision of NHS services to the local community.
- CELL Level 5 Award in Estates & Facilities Information Management - Premises Assurance: designed to inform and reinforce the importance of Premises Assurance including the responsibilities, from Director down, and show how the NHS Premises Assurance Model (NHS PAM) can be used in practice.
- Estates & Facilities Information Management - Risk Assessed Backlog Maintenance: a one day introductory course designed to inform and reinforce the importance of the NHS procedures relating to the production of Risk Assessments relating to Backlog Maintenance information for Statutory Returns and day-to-day use.
Together with Grovenbridge Academy, HFC also offers bespoke courses, again at a discount to HFC Member Trusts. Accredited courses can be delivered either as a Ofqual accredited or a customised non-accredited version specifically for your team. If you have a group of 6 or more staff, this option offers training at your own location offering time and cost savings for your organisation.
HFC Briefing Notes
The full Naylor Review and its supporting documentation can be found here:
NHS Property and Estates: why the estate matters for patients: An independent report by Sir Robert Naylor for the Secretary of State for Health, March 2017
The Carter Review and supporting documentation can be found here:
Operational productivity and performance in English NHS acute hospitals: Unwarranted variations: An independent report for the Department of Health by Lord Carter of Coles
1 NHS Property and Estates: why the estate matters for patients: An independent report by Sir Robert Naylor for the Secretary of State for Health, March 2017