Derelict hospital's impressive recovery

The Hospitals Sites Programme (HSP) represents a groundbreaking property portfolio transfer between the Secretary of State for Health (SoSH) and the Office of the Deputy Prime Minister (now Communities and Local Government) from April 2005.

The £360 million transaction involved 96 sites across England with land totalling 1,600 hectares. The scheme is expected to generate £1 billion of private sector investment by 2010.

David Hughes, a Regional Director of English Partnerships and leader of the Hospital Sites Programme, explained that many of the sites were Victorian asylums, now surplus to requirements:

“A lot of the buildings were old on brownfield sites, and in many cases listed, but often set on the edge of urban areas in good residential locations. What we do is maximise the returns for the public purse and also achieve other Government objectives, particularly around the supply of affordable housing and the design and environmental quality of the housing that’s supplied.”

English Partnerships has adopted policies that include good quality design - as would be expected - but what stands them apart from a more traditional private sector developer is the considerable effort it puts into engaging with the local authority partners and other agencies to make sure the area’s, often urgent, housing requirements are met when developing the sites.

The work undertaken by English Partnerships means that the sites are ‘derisked’, a technical term meaning that the buyers have had many of the normal risks removed, thus bringing certainty about how the site can be used and a better market price for the vendor, as Hughes explained:

“When a private sector house builder bids for a site they want to know about the ground conditions, the local authority planning issues and other property matters in relation to neighbouring uses etc. If there’s clear evidence that any issues have been addressed and there’s clear evidence that the site has been de-risked they are prepared to pay a premium.”

“At a strategic level we have developed particularly good relationships with English Heritage, because many of the sites are listed. A number of the sites are in high quality landscaped areas and so we’ve piloted a number of different initiatives with English Heritage.”

Of the sites that has been transformed, Park Prewitt in Basingstoke, was the first to be put on to the market in July 2005:

“This was a highlight because the site had been vacant for seven or eight years and we managed, within a year, to get it completely turned around and disposed to Taylor Woodrow for 850 homes,” says Hughes. “That scheme provided much needed affordable housing in the Basingstoke area.”

Each hospital site brings its particular set of challenges, which English Partnerships works to overcome. The Fair Mile Hospital in Oxfordshire was a sensitive location on the banks of the River Thames and a grade 2 listed building.

“This is one of our first listed building developments, and we have used it to hit high environmental targets on the refurbishment,” says Hughes. “Fair Mile is an example of where, English Partnerships have added value by engaging very early on with the local authority and English Heritage who were on the panel that selected Linden Homes to build and refurbish over 200 units.

An agreement between English Partnerships and the SoSH is in place so that if the land achieves a better price than expected, the SoSH shares in the uplift. “Every time we sell a site for more than the original base valuation, the SoSH gets a better return. It is motivating to see the public purse benefiting from getting a good price for the sites. And this has happened with a number of the disposals.

“In addition to Park Prewett some of the largest sites disposed of include a cluster of sites in Epsom to Crest Nicholson and Galliford Try with 710 new homes which will achieve Eco Homes Excellent, St Margaret’s site in Epping to Bellway with 180 homes and a 60ha site in Whittingham, near Preston, to Taylor Woodrow which will also provide much needed community and road infrastructure for the area” says Hughes.

The Hospital Sites Programme is a national scheme, addressing the need for affordable housing and growth wherever the opportunity arises. English Partnerships prioritised a site in Chester, bringing the scheme to market rapidly because of the acute need for affordable and family housing in the area:

“We maximised the returns for the NHS and looked at the housing needs in the area. There was a very high demand for family housing. What we didn’t do, and again is probably a slightly different approach to the private sector, is simply maximise the number of units. We looked at lower density options and worked closely with Chester City Council on their “family friendly” development brief for the site before selecting Morris Homes as our development partner.

At Colchester, English Partnerships are promoting the rapid disposal of two complicated sites that will not only provide nearly 2000 new homes but will also facilitate a site for the relocation of Colchester United Football Club: “We’ve managed to get everything in place by working closely with Colchester Borough Council and the Local Mental Health Trust to bring forward a very complex regeneration strategy for the eastern side of Colchester. One site has been disposed of to Galliford Try and will help fund a local primary school and the Severalls Hospital Site has just gone to the market”

Another challenging area of work for English Partnerships was the site of Coldeast Hospital in Hampshire: “It was a very sensitive site,” says Hughes. “The site had been vacant for many years with a listed building on it. There was a lot of local opposition to any development.”

Rather than backing down in the face of the opposition to growth, English Partnerships understood what it needed to do to gain local support: “We work hard with the local authority planners and local authority members, and by taking on board the views of the local community we can come up with a development which is going to get a good level of affordable housing and new build, but will also protect a much valued wedge of open space and woodland in a built up area,” says Hughes.

A former hospital site in Leybourne Grange, Maidstone is also being used to pilot the First-Time Buyers’ Initiative, which aims to give more people the opportunity to get onto the property ladder.

Many of the new homes delivered as part of the Programme will achieve an EcoHomes rating of 'Very Good' or 'Excellent'. This involves reducing the amount of materials used, improving insulation materials and the use of renewable energy sources, and a number of other measures to ensure the homes are as environmentally sustainable as possible.

As the Hospital sites Programme moves in to its third year it has seen receipts of over £270 million with the disposal of 20 sites to create 3600 new homes:

“We’ve certainly made good progress,” says Hughes. “Working with the NHS centrally and the Health Trusts locally, we’re hoping that in the future English Partnerships will have a role to assist other public sector bodies with their surplus land.”

What the Hospital Sites Programme is showing is how to make the best use of surplus public sector land both with returns on redundant assets, and for local communities, which will benefit from a boost of high quality affordable housing of the right type in areas of high demand.