Managing The Estate
In August, 2011 the Department of Health issued a Guidance Note to the PCTs Estate teams, regarding the “Future Ownership and Management of Estates in the Ownership of Primary Care Trusts in England”. The key underpinning principles behind the guidance are:-
- Protecting assets and management future flexibility –arrangements should ensure that the relevant Estate is available for the provisions of NHS Services and should not prevent future changes in the delivery of services and the chosen Provider.
- Ensuring efficiency so that the assets should be owned by the person who has the best incentive to utilise them most efficiently and invest in their development.
- Supporting the provisions of safe fit for purpose buildings
- Ensuring value for money – surplus assets and those with a short term operational life should be identified and considered for disposal within an appropriate time.
- Observing effective Estates Management – this includes from both a strategic and operational perspective including proper documentation of Third Party Occupiers and proper costs management. The intention is that prior to any transfer of the assets, that all Third Party Occupiers’ occupation should be legally documented.
The intention is that Community Foundation Trusts (CFT), other NHS Trusts and Foundation Trusts should be given the opportunity to acquire from the PCT’s Estate services which are deemed to be “service critical clinical infer structure”. That is premises integral to the provision of community services commissioned from these NHS Bodies, which includes but is not limited to, accommodation with high spec equipment or wards and community hospitals.
However the assets should not be transferred to those bodies where it is known they will only be in occupation on a temporary basis and in those cases the occupation should be purely documented in accordance with the Estate code.
The decision to transfer or not will also depend on whether the CFT or other NHS Trust or Foundation Trust is the majority user for the building. Where there are different occupiers within a building, the intention is that it will be transferred to the majority occupier provided they are a CFT or NHS Trust or Foundation Trust. If the building is occupied by users who equate to more than 50% of the lettable floor area and they are not within the definition of service critical clinical uses then the assets should remain with the PCT. In those cases, the CFT or NHS Trust or Foundation Trust should be given a Lease to document their occupation which should be coterminous with their Service Contract.
If the assets are to be transferred to a CFT or other NHS Trust or Foundation Trust, then it should be transferred at net book value as shown in the PCT’s account at the point of transfer. The transfer is to be sold subject to an option to acquire in favour of the Secretary of State for Health and an overage provision which will apply if the Secretary of State does not take up their option.
The option for the Secretary of State to acquire back the interest would apply if the CFT or NHS Trust or Foundation Trust:-
a) Failed to retain the service contract or
b) Vacated a property or
c) if they cease to exist or become insolvent.
If one of those events occurred, then the Secretary of State will be given the opportunity to buy back the assets. If the Secretary of State decides not to proceed with the acquisition, then the CFT or NHS Trust or Foundation Trust will be free to sell and will have to pay to the Secretary of State 50% of the gain achieved.
If the PCT asset is leasehold or a licence, then similarly where it is deemed service critical clinical infrastructure it should be assigned to the CFT or NHS Trust or the Foundation Trust upon similar terms. Where there is a lease it is likely that the landlord’s consent would be required and that should be applied for as soon as possible but the Secretary of State for Health may order the transfer if the Landlord’s consent is not forthcoming. There are also similar proposals which will be enshrined in the Health and Social Care Bill which, when enacted, will extend to Foundation Trusts.
In terms of the PCTs remaining estate the following are excluded from being transferred:
- LIFT leases
- PFI and PPP
- Third party development headleases held by the PCT
- PCT’s headquarters and administrative buildings
- Surplus buildings
SHA approval will be required to any transfers and this is why the PCT’s are being required to submit lists of properties they intend to transfer, this is a programme which is currently on-going and the SHA is due to have approved the final list by the 30th October 2011 with DOH approval due by the 15th December 2011.
For more information of specific advice please contact our legal specialist using the details below.
Call Louise Robinson on +44 (0) 161 234 8876 or send an email
