Management of NHS Property

Karin Smyth Excerpts

Wednesday 4th July 2018 Westminster Hall

[Karin Smyth (Bristol South) (Lab)]

I beg to move,

That this House has considered the management of NHS property.

It is a pleasure to serve under your chairmanship, Ms Dorries. [Interruption.]

[Ms Nadine Dorries (in the Chair)]

Order. Mr Zahawi, the debate has started.

[Karin Smyth]

I recognise that the management of NHS property is not the most enthralling subject, but many hon. Members from across the country will recognise that it is a growing problem in their constituencies. The problems are varied and many. My focus today will be on the community and primary care estate.

I will not talk about bricks and mortar or leaking pipes, or outline the detailed and manifold operational challenges posed by an NHS estate that in many parts of the country still relies on pre-1948 infrastructure. Instead, I want to talk about the places our constituents go to when they need care, where they welcome their children into the world and where they say a final goodbye to those they love. They are places where some of our most precious memories are forged, capable of delivering huge happiness and hosting unimaginable grief. They are hard-wired into our emotional DNA and the fabric of the communities in which they sit. They are places that are paid for by our constituents through their taxes, which our constituents feel ownership of and an enormous attachment to. It is in this difference that the notion of local or personal ownership is blown apart. The harsh reality is that our constituents do not own these properties. Moreover, they do not even have a say in how they are run or in their future.

Who owns them? Who runs them? How do they operate? How can users or stakeholders such as MPs influence change? Those questions are hard to answer as control of these special buildings is opaque to the point of absurdity. The lines of accountability are unfathomable and, as so many colleagues will know, incredibly frustrating to deal with. I have spoken to numerous colleagues across the House about these issues.

[Rachael Maskell (York Central) (Lab/Co-op)]

I am grateful to my hon. Friend for giving way, and grateful to the Minister for listening to my concerns about the Bootham Park Hospital site and intervening on that. A real programme of change for healthcare in York has now been put together. Does my hon. Friend agree that when looking at the estate it is important to develop plans that improve healthcare rather than seeing it just as buildings?

[Karin Smyth]

I agree. The building that my hon. Friend has been working on is iconic, and that case is a good illustration. My hon. Friend the Member for Bristol West (Thangam Debbonaire) has been dealing with a GP surgery in her constituency for a long time and can get no resolution. I have also spoken to my hon. Friends the Members for Stoke-on-Trent Central (Gareth Snell), for Stroud (Dr Drew), for Bishop Auckland (Helen Goodman) and for High Peak (Ruth George)—these problems are happening across the piece.

[John Howell (Henley) (Con)]

Will the hon. Lady join me in condemning how the parking company Smart Parking operates its fines system at the Townlands Hospital in Henley? It is a monstrous way of dealing with people; intimidating them when they are at their most vulnerable.

[Karin Smyth]

I cannot comment on the specific company, but trying to understand accountability and how systems work is frustrating for local people. Many of us are trying to make sense of it.

The estate was an afterthought for the coalition Government and their disastrous Health and Social Care Act 2012—the Lansley Act. Their laissez-faire approach, which bordered on contempt, has saddled communities across the country with burdens and consequences ever since. The current Government recognised that in their response to the Naylor review, stating:

“The structural changes in recent years have distracted attention away from the importance of the estate as an enabler of high quality care, and the NHS has lost valuable expertise and knowledge in strategic estates planning, development and management.”

As we are developing the 10-year plan to transform our NHS into a more community-based, joined-up system, the function of the community and primary care estate as an enabler of service transformation becomes more critical. Although the Government said in response to Naylor that they want to incentivise local action, in practice there are no mechanisms to do so. My focus is therefore on the local roles of two national bodies: NHS Property Services and Community Health Partnerships.

The Lansley Act nationalised health centres, GP premises and, in my constituency, the South Bristol Community Hospital overnight. When the Government realised that no one was responsible for property managed by primary care trusts—mainly GP premises and health centres in poorer areas—they set up NHS Property Services, which became the landlord and asset manager on behalf of the Secretary of State. Community Health Partnerships took over the primary care trusts’ 20% control of local infrastructure finance trusts—LIFT companies—which were public-private partnerships for new GP premises and community-based services, such as South Bristol Community Hospital.

A key part of the LIFT incentive was that the companies made a profit and from that a dividend was returned to all shareholders, including the primary care trust. The Lansley Act passed that 20% local share to the Secretary of State. That LIFT company is still operating, as others are across the country. Bristol Infracare LIFT paid dividends totalling £823,000 last year and £2,344,000 in 2016. Community Health Partnerships received 40% of that, but 20% should have been retained in the Bristol health economy. In the last two years, that amounts to £633,400 in Bristol alone, and that is replicated across the country. I am here today with a simple message for the Secretary of State, via the Minister: I want control of this asset to be given back to the local health economy, and I want our money back.

The closer one looks at the labyrinthine structures that govern NHS properties, the more it seems that the opaque and impenetrable way in which these companies operate is not accidental. They appear to be purposefully disenfranchising and disempowering local people. Whatever the merits of the Lansley Act—I contend that there are not many—it was supposed to drive devolution, liberation and accountability.

[Julian Sturdy (York Outer) (Con)]

The hon. Lady is making a powerful argument. One of the real problems we find in York is that NHS Property Services is very distant and difficult to engage with. It needs to sit down with local communities, whether in York, Bristol or elsewhere in the country, and engage with them about the assets that need to be reinvested back in those local communities.

[Karin Smyth]

That is exactly the point I want to make, but I will go on to show how that is difficult to do and make a difference.

Patients and frontline practitioners were supposed to be front and centre of the new NHS, but that has simply not happened because, as we have heard, control is ever more centralised. It really did not have to be that way. NHS Property Services was set up as a national body, losing a wealth of local expertise and institutional knowledge in the process. With expensive London headquarters, its teams across the regions are stretched. It spent its first period of existence creating a register of assets and a new market rent system. That resulted in disputed and unpaid rents, which necessitated additional loans from the Department of Health to keep the company afloat and a complicated parcelling of subsidy via NHS England to clinical commissioning groups and GP surgeries. The early years have been an expensive disaster, with GPs and managers across the country not knowing what they were being charged for or who to call to sort out the problems. The profligacy of the system is matched only by its utter uselessness, and that is why I have been pursuing this scandal since I was first elected.

In my constituency two GP health centres and a healthy living centre are directly affected by these problems. The Knowle West healthy living centre was set up in a joint arrangement on Bristol City Council land, with public health services delivered based on the needs of a community that has some of the highest health inequalities in the country. It is no exaggeration to say that for many in the area the centre is a lifeline. However, with public health taken out of the NHS into local government, and the services now largely contracted via a third party, NHS Property Services soon came knocking on the door, bringing with it a charges bill increased by more than 200%. There was no discussion, no legal lease was in place and there was no service level agreement. Not only has the charity that runs the centre been forced to operate under the constant threat of closure, but it is unable to access the simplest forms of support. It recently asked if the windows could be cleaned, only to be told that that was not in the contract.

It has taken me three years to get even a modicum of progress—lobbying the clinical commissioning group and Bristol City Council, talking to local media, and raising the issue at the Public Accounts Committee and actively on social media, which finally resulted in a helpful meeting with the chair of the NHS Property Services board. The issue is still not resolved, however, and we still have some way to go. It has been a battle. It is tiring for everyone concerned—frontline practitioners in particular—debilitating and, most frustrating of all, entirely avoidable.

South Bristol Community Hospital has a similar story. This facility was the focus of a 60-year campaign by local people, and it finally opened in 2012. Established by a partnership between the primary care trust, private equity and Community Health Partnerships, the local link was severed by the Lansley Act, as I said earlier. Now the board that oversees the community hospital meets far away from Bristol and with no Bristol involvement. An employee of Community Health Partnerships supposedly represents us in overseeing the management of the company that runs the hospital. Community Health Partnerships, like NHS Property Services, is an arm’s length body within the Department of Health and Social Care. The lease of the hospital is managed by a local foundation trust, University Hospitals Bristol, cobbled together in a last-minute deal with the primary care trust. Two other NHS bodies and a social enterprise are also tenants in the building. If that sounds confused, conflicted and convoluted, that is because it is.

I have been campaigning as the local Member of Parliament to get more services into the new hospital. It is a superb new building, with 96 community beds and an urgent care centre. A poll that I carried out among my constituents showed that 90% either were unaware of the services available in the building or felt that it was underused. A 2014 Care Quality Commission report found that the operating theatres were utilised only a quarter of the time, and the out-patient department only 55% of the time. We have made great progress since then, but the building is still underused as part of the health economy—on entering the building, people are faced with a whole floor with just a reception desk, and the corridors and lifts are typically empty.

The rehab unit, by contrast, is always full. The nurses, porters and other staff who keep it going all work tirelessly, but there is no escaping the sense that this facility is only rented or temporary. Everything is contractual and faceless, with rules abounding, while stroke patients spend their days and months staring at white walls because, according to the nursing staff, there are limits to what the landlord will allow—for example, there are no pictures.

The community hospital is on the southern fringe of our city, where 30% of residents do not have access to a car and the public transport links are historically among the worst in the United Kingdom. That same community has the highest rates of cancer, diabetes and asthma in Bristol, yet people are still expected to travel miles across the congested city for services that could easily be on their doorstep. I keep repeating the need for local health organisations to see sense, and my hope is that the logic is finally getting through and that we will see more facilities, such as diagnostics and perhaps even scanners, in the near future. Yet why has it taken such effort and such a long time?

South Bristol Community Hospital is perfectly placed to deliver the vision in the five year forward view and the aspiration of the 10-year plan—integrated with social care, providing a front and back door to other services to support the flow in the rest of the health system. However, progress towards those achievable goals is constantly frustrated by the fragmented ownership, the complicated money flows and the unfathomable accountability arrangements. My constituents, without fail, suffer as a result.

Time does not permit me to outline similar problems relating to the shady use of wholly owned companies, but chief among my objections to such companies is that every one of them is a lost opportunity to look at NHS estate management locally on a more joined-up basis, with some local accountability in the system. How can we promote a collaborative approach across healthcare systems when individual trusts go down their own selfish route?

The Naylor review offered some interesting recommendations to simplify the national management of the estate. The Government chose to establish a ministerial board chaired by a Minister at the national level, and it includes everyone—every NHS organisation seems to be on that board. I tried to map the board, who sits on it and how it links back to local communities, but I am afraid I gave up. Perhaps the Minister will help us with that.

Some big and controversial decisions need to be made about the estate, particularly in London, but they are being considered without any engagement with local communities. Not only does that ignore the wellspring of local knowledge that could help avoid a repeat of previous failures, but it fosters a feeling of communities being “done to”, and it makes any change hard—in most cases, impossible—to deliver. Hence, efficiencies that could be ploughed back into local health communities will not be realised.

Communities have been asked to submit estate strategies across their local health communities via the sustainability and transformation plans. They are now being asked to submit bids to a new capital programme, but how will estates run by NHS Property Services and Community Health Partnerships be factored into the mix? In addition to that complicated picture, NHS foundation trusts have their own schemes in play. Control and leverage of community and primary care estates cannot be done at the national level. That simply will not work. We cannot achieve the transformation for the next 10 years that is being talked about without local control of the architecture to deliver it.

When local leaders plan services as part of the sustainability and transformation plans, or whatever the next iteration of that is called, local people must have a say in how those services are delivered. There must be a mechanism to bring those properties, places and assets—and the people running them—back into the sphere of accountability of local health service communities.

Those are not bits of internal housekeeping; they are ways of doing business that are bad for the local health economy, bad for staff and, most importantly, bad for patients and taxpayers. Local communities across the country would like their voice back, and our local NHS would like its money back. The debate needs to do more than shine a light on a problem. I would like the Government to acknowledge that there is a problem and commit to fixing it, because anything less is a dereliction of responsibility and a huge opportunity wasted.

[The Minister for Health (Stephen Barclay)]

It is a pleasure to serve under your chairmanship once again, Ms Dorries. I pay tribute to the hon. Member for Bristol South (Karin Smyth) for bringing such an important issue before the House.

The hon. Lady opened by saying that property may not be the most exciting of topics but, as her speech set out, it is integral to the healthcare service offered in local settings. The substance of her remarks was whether we can better align the property estate with a place-based approach to healthcare. As we move to a more integrated and place-based approach to health, I think there is cross-party consensus that property has an important role to play as an enabler of that. The hon. Member for York Central (Rachael Maskell) kindly recognised that that is very much the approach that I have taken in my post, and my hon. Friend the Member for York Outer (Julian Sturdy) recognised it in expressing his frustration with one or two meetings and asking whether decisions on property are aligned with the place-based approach.

The first point I will make to the hon. Member for Bristol South is that the long-term plan and the future discussions about the NHS give us the opportunity to look at wider system changes around integration and place-based healthcare, and how property aligns with that—for example in York, which has been discussed—as an enabler of change in a more holistic approach. As such, her remarks are timely as part of that wider debate.

The hon. Lady mentioned Knowle West health park, which, if I am honest, I looked at for the first time when preparing for the debate; I was not as sighted on that as I might have been. The issue is that, if NHS England provided that service, the additional market rent costs would have been reimbursed, but because it is provided by the county council they are not. However, as she recognised, there has been progress in recent weeks, thanks in part to her work. I am happy to take forward a discussion on that offline if that would be helpful, because I recognise that it is an important service and that we need to ensure that, where market rents are applied, it is not counterproductive to those services.

However, that should not get in the way of the wider point. The hon. Lady suggested that the new approach is a backwards step. I simply point out that there has actually been significant progress by NHS Property Services. The previous model had the inherent conflict that the primary care trusts were both the landlord and commissioner of the property, and therefore the use of the estate was quite opaque. As a result, we did not get transparency on the true cost of the estate, meaning that inefficiencies were not being flushed out and estates were not being utilised in the most effective way.

One driver of NHS Property Services applying market rents has been the need to encourage better utilisation of the estate by being more transparent on the actual costs. I point out to the hon. Lady that there has been significant progress as a consequence. Some £200 million in capital receipts has been unlocked, 500 capital investment construction projects are being launched each year and running costs have been reduced by £120 million. On balance, as we look forward to the long-term plan and pick up on some issues that the hon. Lady quite rightly highlighted, it is also important to recognise that the old system often allowed estates to be utilised inefficiently. Having truer market rents has actually enabled more transparency and driven efficiencies, with savings then able to be reinvested into the service.

The hon. Lady also mentioned salaries and bonuses, which again are part of a wider question. On the one hand, these are big businesses and their leaderships compete in a competitive market. There is a wider debate within Parliament on the right value to assign to senior salaries in the public sector in order to attract talent. These are big budgets, so we need to attract people of the right ability; it is a false economy to save a relatively small sum on lower salaries for people who then make incorrect decisions that waste much larger sums. At the same time, salaries should reflect the values of the NHS and should not be out of step with others in the NHS. There is a cross-party debate on that, and I am interested in the hon. Lady’s points about it.

The hon. Lady also raised NHS Property Services’ new offices. My understanding is that the previous model was highly inefficient. It had five different properties, so the move to Gresham Street was a consolidation of those five properties into one. That drives productivity, which is a key issue that we need to unlock within the workforce. Two thirds of NHS costs are in the workforce, so driving workforce productivity is a key objective. I am sure the hon. Lady will agree that the workforce being consolidated in one office enables a degree of productivity and efficiency that would be harder to achieve if they were disparate across five areas.

The hon. Lady mentioned the impact of the rent adjustment on Bristol. Some 15 GP practices in and around the city of Bristol occupy NHS Property Services sites. NHS England has been working with the Avon local medical committee, practices, NHS Property Services and the Bristol, North Somerset and South Gloucestershire clinical commissioning group and has facilitated negotiations between GP practices and NHS Property Services on reviewing the levels of rent and service charges invoiced to GP practices, to ensure that there is transparency on them.

However, as the hon. Lady will be aware, rent and business costs incurred by practices are reimbursed to GPs under the premises cost directions, and GPs should be compensated for any rent changes through that route. The Department has provided an additional £127 million to the NHS England mandate, with effect from the 2016-17 financial year, to fund the increased costs in the NHS of this policy change.

[Karin Smyth]

I am grateful for the Minister’s comments about, and work on, Bristol. I agree that the estate was not always particularly well managed in the local health system previously, and that the correct incentives are needed. However, does he agree that he has outlined a merry-go-round of money keeping the entire system afloat? NHS Property Services exists on a large and continuing Department of Health loan, so it is not, in any sense—as the Minister described—a successfully run property business.

[Stephen Barclay]

I was trying to make the point that greater transparency on the true cost of the estate drives behaviour to use the estate more effectively. Part of the difficulty has been that, because the estate was not adequately charged market rents in some areas, moving to a fairer and more transparent assessment of market rents—these things are independently assessed, I hasten to add—is a difficult adjustment. However, a consequence of correctly assessing the value of the estate is the unlocking of efficiencies where the estate is not being utilised, and that money can then be reinvested into the system.

I absolutely agree with the hon. Lady’s wider point, which I took as the substance of her remarks, that property is the enabler of system change. That also came out in the points raised by my hon. Friend the Member for York Outer, and has been inherent in points made by the hon. Member for York Central in our previous discussions. Property does not sit in a silo but is inherent in the wider service offering, and it also plays into reconfigurations. A key part of clinically led reconfigurations of estates to drive productivity will be what property there is to enable that and how to utilise it.

The point on which there is a degree of cross-party consensus, as my hon. Friend the Member for Henley (John Howell) recognised, is that decisions need to be accountable. Likewise, I am happy to pick up on the point he raised on behalf of his constituents about there being no accountability. That is an absolutely fair challenge to the Department and one that I am very happy to look at. However, I am mindful, as I know he will appreciate, that these are often independent bodies making independent decisions, and we need to look at how they fit into the system.

A further point raised by the hon. Member for Bristol South, although it is slightly outside of the scope of the debate, was about wholly owned subsidiaries, which she also raised in more detail in the estimates debate. I make two points. First, as she knows, subsidiary companies actually give greater flexibility to trusts that want to compete in a local market and perhaps offer higher salaries offset by changes to pensions. That is one way in which trusts are empowered and enabled to hire in a competitive market, for instance in the case of maintenance staff. It is an enabler, and it often results in people getting paid more for a role, although there may be other, less favourable terms and conditions to offset that. I merely point out that those were exactly the arrangements reached for Members, and I do not remember too many press headlines suggesting that Members were being exploited by that change.

Secondly, I remind the hon. Lady that, as I am sure she is well aware, legislation introduced by the last Labour Government enabled wholly owned subsidiaries. Again, I do not recall Labour Ministers, when taking that legislation through the House, suggesting that it would provide a way of exploiting NHS workers or privatising the NHS.

I commend the hon. Lady for the points she raised. This is a timely debate given our discussions with the NHS leadership on the long-term plan. She is absolutely right—Government Members and other Opposition Members also recognised this—about the centrality of property to the place-based approach that we seek to take. I am happy to have a separate discussion with her on Knowle Park to check whether that is now in the right place or whether further work is needed. I look forward to further discussions with her on how we should utilise the property estate in the most effective way.

Question put and agreed to.