The NHS has always been something of a hot political potato and with allegations of funding cuts and the use of smoke and mirrors, this situation is even more critical today. In this week’s budget the Conservative party put forward an additional £250 million for social care in year one with £130 million per annum for the following two years. Experts suggest that the NHS requires an additional £2 billion a year to at least have a fighting chance of maintaining services. So, could the NHS property portfolio be better managed?
How large is the NHS property portfolio?
When you bear in mind that the vast majority of hospitals and service buildings are owned by the NHS we can only guess at the size of the property portfolio. It turns out that many NHS trusts up and down the country have no idea of the value of their property portfolio which is alarming in itself. We can only surmise that if they have no idea how much the property portfolio is worth then surely it cannot be managed efficiently?
The situation is slightly clouded by PFI agreements which were brought in by the Labour Party and have proved to be extremely expensive and in some cases disastrous. So, how could the NHS property portfolio be better managed?
Horses for courses
If NHS trusts around the country have no detailed list of the value of their property assets then there must be an argument for moving these into a professional property management company. This would allow the assets to be managed on a hands-on basis with suggestions that even a meagre 3% yield could create an additional income of £2 billion a year. While £2 billion may seem minuscule when compared to the overall £116 billion a year NHS budget it is enough to make a difference and see the NHS through these very difficult years.
Many countries around the world which operate government healthcare systems have quite rightly separated off healthcare property assets from the services side. Indeed a recent article brought to light the fact that Tesco, renowned as one of the more popular supermarkets in the UK, actually makes more money from its property management division than from sales in its UK shops. Well, the UK NHS has run down services and opened up new facilities around the country. However, have the older property assets been fully utilised?
When you bear in mind that many of them are in residential hotspots then surely there must be money to be made in property development which would also go some way to easing the UK housing crisis?
We can only guess at the full value of the UK NHS property portfolio but what we do know, and all you need to do is look around you, is that these assets are not being maximised. There are hospitals and NHS services being replaced right around the country with new facilities yet the older facilities often stay open, offering reduced services. When you also take into account the new digital age in which we live will there really be a need for so many physical NHS properties in the future?
While politicians continue to debate the future of the NHS and uses it as something of a political football maybe a simple switch of NHS property to a professionally managed property company would be useful going forward?