Making creative use of NHS estatePeter MolyneuxCommon Cause Consulting4 June 2014

• Land surplus to requirements

• Lodge with public land registry for 50 days

• If NHS or other public body interested then transferred or sold at NPV.

• If not marketing agent instructed and sealed bids sought.

• Bids assessed and received by District Valuer

• Highest bid accepted.

NHS land disposal process

• Land surplus to requirements

• Foundation Trusts must operate within risk assessment framework.

• Decision may require approval from the Board and Council of Governors.

• NHS Trusts are entitled to keep proceeds up to £5m.

• Over £10m a business case is required.

• Up to £50m a business case for investment must receive NHS TDA approval.

• Over £50m DH and Treasury approval is required.

Rules on assets

• Low financial risk

• Raises fixed capital sum quickly – for investment in new facilities

• Overage partly recoups uplift from development

• Trust loses equity in perpetuity

• Trust loses control over development and development of community infrastructure is difficult

• Early sale may reduce income and cost control needs to be robust to limit risk of overrun.

Release value of land at outset

• Surplus land is exchanged for new mental health facilities.

• Financial certainty is delivered early – design certainty also needs to be delivered early.

• Trust is not distracted from core purpose.

• Financial failure of selected purchaser.

• Trust is very dependent on purchaser delivering on obligations

Cross-subsidy with single partner

• Selection of right partner will share burden of optimised delivery of the whole

• Control maintained over timing and sequencing of the whole development and community development.

• Sales values maximised.

• JV structure could be used to incentivise the delivery of holistic best value.

• Income at risk from market fluctuations.

Single flexible partner, release in phasesusing open supply chain

• Selection of right partner will share burden of optimised delivery of the whole

• Financial risks and workload are shared.

• Opportunity to engage or involve community partners in the consortium – which can also hide / reduce value of cross subsidy.

• Risk share may reduce outturn value to the Trust for cross subsidy.

• Delivery of best value in discrete elements may not deliver best value overall.

Consortium approach to whole of planning consent

• Housing associations should have a clear service offer that is measurable, tradeable and marketable.

• Understand service transformation and CIP programmes and how they can help with them.

• Understand land disposal plans of local Trusts and appetite for disposals or JVs

• Understand proposals of local authority.

Making an approach