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Sustainability and Transformation Healthcheck 11/11/16

What will the emerging Sustainability and Transformation Plans mean for your estates?

The concept of place-based health provision embodied in Sustainability and Transformation Plans (STPs) reinforces the need for Trusts to work together with their partners to ensure that their estate is run efficiently, and provides both challenges and opportunities.


The reconfiguration of estates to focus on core sites and elevate the importance of integrated community, primary and social care will, in many cases, result in the closure of the whole or part of Trust facilities. The need to make efficiency savings will also increase the pressure to reduce maintenance, running and void costs. Trusts will then have the option of either disposing of the asset, or finding an alternative income-generating use.

Capital receipts may be subject to clawback where, for example, the asset was transferred to the Trust on the dissolution of the PCTs. It may be preferable therefore to explore alternative uses and/or joint ventures between public sector organisations and with Housing Associations or other developers to secure an income stream from surplus assets.

Maximising use

Flexibility of design will be key to enable space to be shared between service providers. The use of sessional licences to maximise utilisation and spread the associated overheads is likely to become more commonplace. This is also an opportunity to offset the high costs of any under-used space within PFI and LIFT buildings.

New developments

Where new development is needed, the shortage of available funding will inevitably be an issue. PFI/Pf2 is as such likely to re-emerge as the one of the few ways to fund new builds. This is however less suitable for refurbishment schemes given the complex risk share arrangements this entails.

Although the poor condition of some primary care premises may be an obstacle to developing community hubs and primary care-led emergency care, the Government has made funding available by way of grants and other forms of investment which could be sought if GP services can be provided from the relevant premises.

Pooling estates and services

The pooling of estates and/or facilities management services is one obvious way to achieve efficiencies. This may in turn lead to joint development, with the possibility of using the estate to leverage private sector expertise, resource and funding.

Organisations could consider partnering arrangements for jointly occupying one organisation’s estate and sharing receipts and revenue in respect of the premises left fallow.

The risks around the loss of control of premises and facilities management are however not to be underestimated given the need to ensure that CQC and other service-related environmental and health and safety standards continue to be met and given the incessant reconfiguration of services provisions.

How can Ward Hadaway help?

At Ward Hadaway we can help you to explore these options. We have advised on:

  • the transfer of estates to special purpose vehicles both wholly owned and as joint ventures with the private sector
  • the outsourcing of FM services
  • PFI and PF2 style schemes both for new development and refurbishment projects
  • the transfer of surplus land to residential developers and the HCA
  • setting up suites of documents for the sessional use of shared space and long term joint use of jointly used premises.

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.

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