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Healthcheck – Sustainability and Transformation Plans

Further to the NHS planning guidance issued in December last year, NHS organisations are due to publish the final Sustainability and Transformation Plans (STPs) for their areas next month.

These must include details of the actions that will be taken across each geographical footprint for health organisations to utilise the NHS estate better by disposing of unneeded assets, utilising the estate to create income streams and supporting models of care.

In February this year Lord Carter’s efficiency review also recommended that all non-specialist acute Hospital Trusts should be able to show that they operate at or above the average benchmarks set by NHS Improvement for all aspects of the management of estates and facilities by April 2017.

Emerging health estates companies

A number of STPs are expected to propose that one way to deliver the new models of care and demonstrate the required efficiency savings will be to transfer health estates and/or related management services across their footprint into a special purpose vehicle.

The biggest challenge here and in relation to the whole STP agenda is the inherent tension between collaboration and the need for individual NHS organisations to compete if they are to survive in the new health system.

Trusts will, for example, have a vested interest in retaining control over any properties which are key to their clinical service contracts – both existing properties and any they wish to bid for in the future.

What does this mean for me?

  • There are ways to secure controls over the timing of the transfer of properties into an estates vehicle – through contractual mechanisms that would mean that the properties are not transferred into the vehicle unless the organisation is sure that what is planned for the property accords with its strategy and needs, and also through voting rights/vetoes and board membership.
  • The vehicles may also involve property management services including facilities management. Trusts will need to be confident that if this service is transferred they will be able to comply with CQC and clinical service contract requirements.
  • Procurement – this may be relevant if management, facilities maintenance or other services are included which are over the relevant threshold.
  • Health organisations will also need to ensure that they receive best consideration on any disposal including a share of any overage if the property is developed.
  • Exit strategies – can the Trust get the land back if the arrangement is terminated?
  • If facilities maintenance is included, the usual issues re ensuring that the relevant standards are met and there are appropriate remedies/sanctions if they are not (e.g. step in).
  • Governance issues – how will decisions be made and potentially conflicting priorities be reconciled if there are multiple bodies involved?
  • Early due diligence will need to be carried out on the properties to identify any covenants/approvals required, including Secretary of State buy-back if the Trust has acquired properties from the former Primary Care Trusts.
  • TUPE and pensions will need to be addressed if management/facilities maintenance staff will transfer.

How can Ward Hadaway help?

At Ward Hadaway we have a fully integrated public sector property and commercial team with experience of setting up and transferring estates into shared asset and services vehicles.

We are able to help with all of the issues highlighted above to assist you in preparing for and implementing these estates strategies in response to these policy developments.

For further information on the issues raised in this update, please get in touch with Karen Andrews or a member of our Healthcare Team.

Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.

This page may contain links that direct you to third party websites. We have no control over and are not responsible for the content, use by you or availability of those third party websites, for any products or services you buy through those sites or for the treatment of any personal information you provide to the third party.

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