Healthcare: Get well soon

The lack of clarity about the implications of the government’s Health and Social Care Bill reforms has left most people in the healthcare sector uncertain about the future. Most of the press attention is, understandably, focused on patients and services but I’m going to look at the often overlooked issue of the health estate.

Clearly, the government is determined to carry out significant cost-saving measures. Given the state of the economy and the enormous cost of running the NHS, this is an easily understood, if not always popular, concept for most people, but how well is it going? Are the government’s intentions being realised in practice at the frontline? It’s simply not clear. Indeed, there are many indicators pointing to a disconnect between government intentions and the reality on the ground, so where is the leadership? It’s all rather worrying and one asks if all the upheaval is really necessary.

There are many indicators pointing to a disconnect between government intentions for the NHS and the reality on the ground, so where is the leadership?

At a time when the government is demanding £20bn savings from the NHS but is simultaneously facing up to demographic changes which are placing ever-increasing demands on the service - leadership is needed. It’s surely a time for innovative ideas and the good news, to my mind, is that there are things which can be done to provide easy quick wins using existing procurement mechanisms. This would immediately avoid the huge legal development costs that new procurement processes attract without adversely affecting frontline services. Surely there has to be benefit in this approach?

I said I would talk about the NHS estate. Why has it been overlooked? Because NHS management has been pushed into concentrating on frontline clinical services, and estate budgets have been slashed for years to pay for it. To have allowed this to become more than a short-term emergency strategy was short-sighted because high quality services cannot be delivered from low quality facilities. The “strategy” prevailed for so long that a significant proportion of the NHS estate is now in poor condition and in many cases, is not fit for purpose. The maintenance backlog has been assessed at something approaching £4bn and other public sector bodies such as councils, police and fire services have similar challenges.

Another critical issue is what will happen to the primary care trust estate when PCTs are abolished? The estate is critical because flexibility for healthcare commissioners is critical and flexibility is largely dependant upon who controls the estate. Unfortunately, many PCTs have interpreted health department guidance to mean that they should push most of their residual estate to providers but, if too much goes to them, the very flexibility that the government wants will be constrained. Happily, it looks as if this aberration has been spotted and clearer guidance will be issued. Let’s hope that is the case.

At a time when we hear a lot about “joined-up government” and easier access to services for citizens, surely there must be a benefit in asking our public bodies to co-operate more effectively in the management of their collective assets. Mechanisms to do this already exist. In England, the LIFT programme is already there to engage on such strategies while in Scotland it’s starting to happen through the Hub initiative.

There must be a benefit in asking our public bodies to co-operate more effectively in the management of their collective assets

Acute trusts have tended to look to PFI or Procure 21 (P21) for most of their major developments but both are facing difficulties, albeit for different reasons. PFI suffers from a bad press which is largely misplaced. I wrote about this in a previous column so I won’t repeat it here other than to suggest that flexible solutions could and should be developed under PFI. P21 has delivered some good facilities and was superseded by P21+ last year but P21+ relies on NHS capital budgets and right now there aren’t any. So, where can trusts look for funding?

One place is the new kid on the block that will work for all areas of the NHS - the Local Asset Backed Vehicle (LABV) or Strategic Estates Partnership (SEP). This model could be critical to the future of the NHS, especially where there is no access to LIFT. This model will also work well for the development of whole estate programmes where the NHS co-operates, as it should, with other public sector entities on estate rationalisation.

Overall then, I believe that the government and the health department already have a number of powerful tools which, if used to their full potential, could make a significant difference to a re-shaping and re-provision of the health sector estate without the need for structural change.

Ken Gillespie is group managing director of construction at Galliford Try

Building’s White Paper on Healthcare provides an in-depth guide to opportunities in the sector and is now available to pre-order. Click here for more details