Sites for Sore Eyes

At the time that NHS trusts were being established, property that was vacant or had no identified long term health use, remained in the ownership of the Secretary of State for Health. Over the years this property has been sold on an individual basis and since the mid-1990’s has realised over £2bn in capital receipts.

In the year 2000, the Department of Health and HM Treasury jointly published ‘Sold on Health’, a report on modernising procurement, operation and disposal of the NHS estate. One of the report’s recommendations was for Department of Health (DH) to explore the disposal of property portfolio rather than on an individual basis.

As a result a portfolio of around 100 properties was assembled. Following discussions between DH and the then Office of the Deputy Prime Minister, it was agreed that this portfolio should be transferred to English Partnerships (EP) to assist the Government’s sustainable communities programme.

In deciding which properties to include in the portfolio, the DH wanted to ensure that it included a mix of location, size, type and development potential and was not solely those that would be considered the ‘crËme de la creme’.

The portfolio was therefore of a mixed nature with properties, ranging from small parcels of land to large former mental institutions located around England in both rural and urban locations including within Growth Areas e.g. Thames Gateway. They had the potential to provide around 13,000 new homes.

While some of the sites were ready for disposal, the sale of others if sold on an individual basis would have occurred later and little action had been taken in preparing them for sale. For these latter properties in particular, a considerable amount of work had to be undertaken on such matters as reports on title, assembling site information, site surveys etc...

For a number of the sites DH had progressed planning, mainly housing, to the point where consent for alternative uses had been granted but for others the town planning process was at an early stage. This gave English Partnerships flexibility as to how it dealt with the sites to achieve it’s aims and some early successes.

The advantage of a portfolio sale to DH included that it was no longer responsible for the management and disposal of the properties on an individual basis and a substantial initial payment was received. A number of ‘problem’ sites were also included.

As part of the agreement with EP, the DH will also receive further payments once properties within the portfolio are sold. However, if in order to achieve its own objectives EP sells a property for below it’s market value, the payment that the DH receives will be based on the market value. This gives EP the flexibility to determine how a particular site should be developed to satisfy its corporate aims but ensure that the Government still achieves a payment based on the market value i.e. both parties ‘win’.

At the time of transfer of the majority of portfolio, some DH staff who had been working on properties within the portfolio also transferred to EP. Not only did this provide them with continued employment but it also meant that the knowledge they had built up in managing the properties on a day-to-day basis was not lost. This has proved to be a considerable benefit.

There has continued to be regular contact between DH and EP staff in respect of the properties within the portfolio. This has been particularly useful where there has been a need to liaise with the NHS locally in respect of particular sites. DH is also in discussion with EP in relation to the sale of other surplus property which has since become available.