Health secretary says new government-owned company NHS Property Services Ltd will take over NHS estate

The Department of Health has announced plans to set up a national company that would take over up to £4bn worth of NHS property after primary care trusts are abolished next year.

Under the plan, announced by health secretary Andrew Lansley today, the property company - NHS Property Services Ltd - would be a government-owned limited company.

Lansley said the company would take ownership of and manage the existing primary care trust (PCT) estate that will not transfer to NHS community care providers under the plans for healthcare reform set out in the Health and Social Care Bill.

The move is aimed at solving the problem of who will take over billions of pounds of NHS property after PCTs are abolished from April 2013.

Industry experts estimate the property portfolio could be as much as 4,000 sites with a book value of up to £4bn.

Lansley said full details on the firm will be finalised in the coming months, but its objectives would be to:

  • Hold property for use by community and primary care services, including for use by social enterprises;
  • Deliver value for money property services;
  • Cut costs of administering the estate by consolidating the management of over 150 estates;
  • Deliver and develop cost-effective property solutions for community health services; and
  • Dispose of property surplus to NHS requirements.

Lansley said property taken on by the company would include some operational estate and offices and would include buildings with multiple occupiers and estate occupied by social enterprises.

But he said estate “clearly linked to the provision of clinical services and mainly occupied by NHS providers for that purpose will be transferred to them”.

Building understands the company would also take ownership of the public shares of properties built under the local improvement finance trust scheme (LIFT), which are 60% privately owned, with the remainder split between PCTs and the DoH.

David Lawrence, head of health at Capita Symonds, said the company would hold the assets, with regional subsidiaries - and possibly local subsidiaries - working closely with the new clinical commissioning groups (CCGs), which will be responsible for commissioning NHS services.

CCGs would then act as landlords to health care providers, he said, which would take on a lease for the period of the service contract.

But he said the DoH would need to consider how to manage and invest the property over the longer term, while at the same time working closely with CCGs, which would want to let contracts for NHS services over a five-to-seven year period.

“The DoH will be looking for developers and investors to manage the existing portfolio and optimise it in close consultation with CCGs,” Lawrence added.

James Atkins, a real estate solicitor at Hempsons, said there was “potential for significant complexity” around how LIFT and PFI properties would be integrated with the new company, as well as the estates role, if any, that CCGs will play.

“It’s not clear yet what the relationship between CCGs and the property company will be and whether commissioners will be able to procure estate for providers,” he said.

“There is inevitably still some uncertainty about how the arrangements will work, what it will mean in practice and particularly what it will mean for investment in the estate, although it does seem possible that the opportunity for private sector involvement will increase in the medium to long term,” he added.