Rationalising healthcare assets

Rationalisation of NHS estates could be crucial to both asset development and service provision


  • Jack Thompson-Smith

24 September 2019

In recent years, there has been a marked growth in the attention paid to mental health and well-being.

Either as a result of this development in public awareness, or in response to a general rise in the prevalence of mental health diagnoses, demand for public care services in England and Wales has reportedly increased. The latest NHS Mental Health Bulletin, published in November 2018, highlights a 1.4 per cent increase in demand across all mental health services over the previous 12 months.

At the same time, cuts to public spending have reduced funding for the sector by £100m in real terms since 2012. Put simply, mental health service providers are under considerable financial and logistical pressure given the growing demand.

In response, the NHS produced its Five Year Forward View in 2014, which identified the main changes that would be required to meet the healthcare challenges faced by society, and prioritised objectives with the longer term in mind.

One such proposal was the centralisation of services through consolidation of the NHS estate. Published in March 2017, Sir Stephen Naylor's review NHS Property and Estates: Why the estate matters for patients estimates that such a move could result in savings of between £500m and £1bn a year. More significantly is the release of assets deemed surplus to requirement, also recommended in the Naylor report. Estimates suggest this would raise £2.7bn in one-off capital receipts alone, which could rise to £5.7bn if a more radical approach to estate rationalisation were adopted.

NHS sites have grown organically over time in response to changing care demands. Perhaps unsurprisingly, rationalisation of the estate has not been a primary concern; however, such an approach could enable efficiency savings that may then be reinvested in both asset development and service provision.

Mental health service providers looking to implement a programme of rationalisation must adopt an effective long-term strategic plan to maximise value. For example, one such service provider recently commissioned consultancy Baily Garner to appraise the fit-out of a new shell and core space, which it had acquired under the terms of an asset sale; the client brief proposed consolidation of several internal departments from other areas of the site. Unfortunately, the proposed space was rendered unsuitable by the restrictive layout of the building's structural frame.

"The challenge of estate management is heightened by considerable increased levels of physical wear on the care environment"

Such a fundamental issue could have been mitigated if the space's use as part of the strategic plan for the estate had been considered at an earlier stage, allowing the service provider's active engagement in the design process.

When considering the full-time, specialist nature of healthcare provision, it is imperative that the estate be maintained in both an operational and compliant condition. The Naylor report, for example, identifies the high operational cost of existing assets as one reason prompt action is needed by the NHS. However, much of the current estate is of an age, condition and form that significantly hinders the ability of service providers to keep pace with their obligations. To put this into perspective, the NHS's current maintenance backlog is estimated at between £5bn and £10bn.

The challenge of estate maintenance is heightened by considerably increased levels of physical wear on the care environment. Furthermore, the NHS regulatory standards, with which the estate must comply, are regularly updated due to the ever-changing nature of mental healthcare. This becomes a significant issue for mental health service providers, who must implement the necessary improvements while maintaining the same levels of service provision and controlling disruption.

A recent commission to rectify various compliance issues in a live mental healthcare ward, giving it a light-touch refurbishment, demonstrates the problem. At a late stage in the pre-contract process, the client elected to undertake a full decant of service users from the ward as the invasive scope of the work meant they might be put at risk. This created substantial logistical challenges and ultimately delayed the project.

The NHS and its estate are expected to undergo significant change in the short term to provide better care environments. Effective strategic planning is critical, and building surveyors are ideally placed to advise on this process.

Jack Thompson-Smith is a building surveyor at Baily Garner jack.thompson-smith@bailygarner.co.uk

Related competencies include: Development/project briefs

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