Doctors and other healthcare professionals now have responsibility for commissioning health-related buildings. But do they have the expertise - or time - for such procurement?
With 25 million square metres of occupied floor area, the NHS has the largest property portfolio in Europe. The NHS Property Service (with just 10% of the total NHS Estate) controls a portfolio worth £3bn, and has a projected spend for 2014-15 of £800m, including £136m on external facilities management contracts. It is understandable, then, that upheavals in the NHS in England are of great interest to the construction industry.
The Health and Social Care Act 2012 (HSCA) was, according to the Local Government Association, “the largest piece of health legislation since the creation of the NHS”. After much political debate and over 2,000 amendments, it finally came into force on 1 April 2013.
Perhaps the most fundamental change was the amendment of the NHS Act 2006 so that the health secretary no longer has a duty to “provide or secure the provision of services”. At the heart of the new structure, and assuming this duty, are the “Clinical Commissioning Groups” (CCGs), which have responsibility for commissioning healthcare services in particular geographical areas. The 211 CCGs replaced primary care trusts (PCTs) and strategic health authorities (SHAs).
Each CCG comprises the GPs and other healthcare professionals (including nurses and hospital doctors) practising in a particular geographical area. CCGs are responsible for all aspects of healthcare commissioning, including the procurement of new healthcare-related buildings, and must assess construction-related aspects of all tenders.
Some CCG board chairs are expected to give up 40 hours a week to commissioning, making the delivery of any clinical care impractical
GPs have a further property management role since, although about two-thirds of PCT property is now managed by the NHS Property Service, GPs are generally still responsible, via their individual contracts, for providing adequate facilities for their own services. With the drive to deliver more services in primary care, existing facilities will come under increasing pressure. Indeed, 20% of 1,545 practices applying for Care Quality Commission registration failed on one aspect of their premises’ quality and a third were not “safe and accessible”. Worryingly for GPs, remedial work has been delayed by a temporary investment freeze on NHS Property Services pending a funding review.
Opportunities do, however, arise from CCGs’ role in identifying NHS properties which are no longer required. Between April 2013 and October 2014, the NHS Property Service sold some 109 such properties, valued at a total £52.4m.
A further concern to CCGs is that, with the abolition of the 10 SHAs there has been a loss of economy of scale. Whereas hospital trusts have the purchasing power to employ estates and procurement managers, CCGs may not be able to afford this expertise. The Department of Health’s 2013 procurement development programme has gone some way to address this, establishing a procurement oversight board and working with the Royal Colleges to help clinicians better understand procurement costs.
CCGs must adhere to the public procurement regime, and so their decisions are open to judicial review. Furthermore, delayed or disrupted projects could affect NHS services, putting the CCG in breach of its duty to deliver such services. Such concerns, combined with a lack of procurement experience, are likely to make the CCGs defensive in their approach to procurement, and may drive them to prefer turnkey projects where all “project” risk is contracted out, which is likely to be reflected in higher tender prices.
Although it may be seen as a step forward that HSCA will involve clinicians in procurement and construction decisions, this is not always seen as the best use of their time. Among GPs there is concern about becoming unduly involved in the commissioning process to the detriment of their clinical exposure. For example, some CCG board chairs are expected to give up 40 hours a week to their commissioning duties, making the delivery of any clinical care impractical. Many are reluctant to accept such a major role in commissioning, and consider their medical training has not equipped them with the relevant skills. This in turn may lead to poor engagement with the process and a tendency to outsource the decision making.
Although clinicians are understandably cautious about embracing HSCA, it is hoped that the act will ultimately lead to fully integrated health and social care projects, drawing on both medical and social care skills to create a new generation of high-quality facilities for the NHS. This new approach to NHS procurement will bring with it fresh challenges and opportunities for the construction industry.
Scott Mabbutt is a surgical registrar at Airedale General hospital with an interest in healthcare leadership. Robin Wood is an associate in the contentious construction group at Herbert Smith Freehills
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