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Surplus NHS estate is an opportunity for contractors, EC Harris finds

Capital injection is urgently needed to address a £1.5bn “critical backlog” in the NHS England estate, EC Harris’s global head of health has told Construction News.

More than a third (34.2 per cent) of NHS England’s building stock dates from before 1974 and now needs to be rebuilt, according to EC Harris research.

“All of that [pre-1974 stock] is now old and needs replacing,” Conor Ellis said. “And if [not] replacing, it needs massively increased maintenance.”

The proportion of new, post-2005 buildings increased to 20.1 per cent of the whole estate in 2013, up from 14.5 per cent in 2009, but Mr Ellis said the job “isn’t complete”.

The NHS has been one of the major talking points of the party conference season, with each of the political parties scrambling to secure votes having pledged increased spending if elected in next year’s general election.

Mr Ellis warned of a £4bn maintenance backlog in the NHS, of which he said £1.5bn was a “critical backlog”, including Victorian-era buildings that were inherited by the NHS in 1948 and are no longer “fit for purpose” as hospitals and clinics.

“The high risk and critical risk is beginning to go up again because there’s no investment and, as a result of no investment, unsurprisingly, the standard of facilities is quite poor again.”

Age profile of NHS estate 2009-2013

Source: EC Harris

Mr Ellis said greater capital investment is needed from the government to improve the healthcare estate, but that NHS-related election pledges from Labour and the Conservatives at their 2014 conferences were “very disappointing”.

Labour leader Ed Miliband promised a £2.5bn fund for more doctors, nurses and NHS staff, while prime minister David Cameron promised to ringfence the health budget while extending GP hours during the week and at weekends.

“If you listen to the two main political parties, there was that big emphasis that the NHS is safe with them – if that’s the case, surely they’ll be providing some public capital to help [improve the estate].”

But Mr Ellis said he did not expect any significant public investment in the NHS England estate until at least 2016.

He was speaking to Construction News as EC Harris published its NHS Estate Efficiency Review: A potential saving of at least £1.5bn.

The review found there is 1.3m sq m of surplus, unused space within the NHS estate, equivalent to 4.8 per cent of the whole estate, or the area occupied by 13.5 NHS Trusts.

“In an era in which the government is saying we are 130,000-odd houses short per annum… selling off [surplus] land to housebuilders are easy wins”

Conor Ellis, EC Harris

Mr Ellis said there was “no doubt” contractors could play an important role in refurbishing or building new facilities on unused NHS estate.

“We know of several parcels of land of 10 acres,” he said. “In an era in which the government is saying we are 130,000-odd houses short per annum… selling off those bits of land to housebuilders are easy wins for the trusts.”

Mr Ellis also encouraged the formation of strategic partnerships between NHS trusts, private developers and contractors to deliver both new healthcare facilities and the private redevelopment of surplus land.

“Where you have one or two outbuildings sitting on the corner of an estate, you could get the developer to build you something new right in the heart of the estate, move your staffing into those, and then redevelop that piece of land.

“It means the NHS becomes more clinically efficient, staff are in better-quality facilities and the public sector has disposed of an asset it wasn’t using properly – and the public gets access to new homes it wouldn’t have otherwise got.”

“The high risk and critical risk is beginning to go up again because there’s no investment and, as a result of no investment, unsurprisingly, the standard of facilities is quite poor again”

Conor Ellis, EC Harris

The review also found that the NHS could save £1.5bn a year if inefficient trusts improved their hard and soft facilities management and energy and estate management practices to operate at the average estate performance.

Mr Ellis said former health secretary Andrew Lansley’s NHS reforms, which devolved power to individual hospitals and consortia of GPs, had made it more difficult to deliver an efficient estate because “command and control no longer applies”.

“While [the reforms] work for getting better clinical views and embracing local populations, the converse on the estates side is, do we really believe there are 300 brilliant estates managers? The answer is, of course not.”

He said he had “an awful lot of sympathy” for estates managers with crumbling estates because it was not feasible for them to operate at the same standards and costs as those operating modern, purpose-built facilities, and they had limited access to capital to refurbish those buildings.

If all NHS trusts could operate like the top 25 per cent, the NHS would save £2.9bn a year to deploy to frontline medical services, he said.

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