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Unhealthy NHS estate offers risks and rewards

The crippling financial crisis engulfing the NHS is having a devastating impact on the state of hospital buildings.

The backlog of repairs stands at £1.5bn and almost a third of our health buildings are ageing and unfit for purpose, according to EC Harris’s
global head of health Conor Ellis following its report published this week.

It’s a state of affairs that harks back to the mid-1990s before the injection of PFI cash that delivered more than 100 new hospitals but turned out to be at a price that has added to the health service’s financial woes.

Poltiical grandstanding

So what’s the prognosis for work in the health sector this time around?

Political parties have all been pledging to pump more money into funding doctors and nurses, but the need for extra capital expenditure hasn’t yet made it onto the party conference circuit, nor is it likely to any time soon.

Not only is there no money, the Department of Health’s NHS reforms have ostensibly moved control away from the centre and turned the NHS into a series of standalone businesses; it’s the job of these new entities - NHS foundation trusts - to manage their assets and fund their repairs.

“The NHS urgently needs the sector’s commercial nous and financial muscle to lever income from its assets”

Foundation trusts control almost 90 per cent of NHS property and land assets, with the rump coming under the control of NHS Property Services.

The EC Harris report certainly flagged up plenty of scope for rationalisation, claiming that the equivalent of 4.8 per cent of the whole estate, or the area occupied by 13.5 NHS trusts, was lying unused.

An earlier report from WSP, for example, said that redeveloping existing NHS buildings to include floors of apartments above the service buildings could provide 77,000 new homes in London.

Fresh approach opens doors

With a £30bn deficit facing the NHS, some foundation trusts are already beginning to think differently.

We’ve seen a trickle of tenders for strategic health partners that can bring new ideas to the table while also helping to maximise revenue from both the sale of land and the development of commercial facilities such as shops and even leisure centres.

There are reckoned to be a dozen more such plans in the pipeline.

The NHS urgently needs the sector’s commercial nous and financial muscle to lever income from its assets.

But for those who have experience of the healthcare arena in its current highly fragmented form, it’s not a market for those with anything less than an iron constitution for risk.

Sadly anything to do with reforming health is often surrounded by political brouhaha, delays and indecision, even if it is in a critical condition.

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