NHS estates have made headline industry news a great deal recently. The NHS Five Year Forward View and the Naylor Report have highlighted the need to release NHS land which is no longer required to deliver health and care services.

It is clear this surplus land could help meet the Government’s housing delivery targets and contribute to the NHS deficit. For example, a landmark devolution deal for London Trusts received approval in 2017 that will incentivise London Trusts to sell unused land and buildings for the development of more houses with money raised from the sale being reinvested in health and care, community and public services.

Of 241 NHS Trusts in England, 161 reported having plots of surplus land, declaring 543 plots overall which is equivalent to 1,332 hectares and worth £282m according to NHS Digital NHS Surplus Land 2016/17 data.  In reality, it is likely that the majority of Trusts in England have parcels of surplus land that are being retained, as Trust or STP wide estate plans may be earmarking those plots for future operational use or development. At the same time almost certainly, the majority of NHS Trusts in England will have buildings that are not being fully utilised, or are unfit for purpose.

We explored in a previous piece that one of the biggest issues is that NHS purse strings are being pulled ever tighter and capital budgets are increasingly being transferred to revenue budgets to deal with day-to-day financial pressures. This leaves NHS estates with a restricted budget to ensure their buildings are up to delivering the core services of the NHS, clinical care.  NHS Estates teams are usually under such extreme pressure that there is often little time, energy and budget left to focus on the longer-term strategy for the Trust in terms of surplus land development and disposal. In many cases, there may also be a lack of the right type of skills to ensure maximum value can be achieved through sale or developing partnerships with developers or commercial/retail providers.

There are a number of ways NHS Trusts can dispose of surplus land. We have identified the most popular routes here along with our views on the pros and cons of each:

ProviderProsCons
Trust in-house
  • Foundation Trusts receive the full benefit of proceeds from the sale
  • Non-Foundation Trusts will have to agree distribution or reuse of generated proceeds with NHSI. ’
  • May not have the relevant in-house property skills to manage the marketing and disposal of strategic sites and therefore may be reliant on the appointment of external consultants.
NHS Property Services
  • Pass responsibility and risk for site sale 
  • Market value for site achieved, no incentive to maximise value
  • Proceeds from sale of surplus site are retained centrally for reinvestment to the NHS as a whole, rather than to the individual Trust’s bottom line
Ryhurst SEP
  • Pass responsibility and risk for site sale to an experienced partner  
  • Experienced Land Development team with in-house planning and surveying expertise
  • Services incur a fee, usually a percentage of the land sale. The fee is retained by the SEP and reinvested into other estates projects

Ryhurst has the skills, experience and investment power to help Trusts make a positive contribution to its balance sheet. Our in-house land development team is knowledgeable and highly experienced in working with Local Planning Authorities to establish the planning parameters for NHS sites, and developers to achieve maximum value.

We work with Trusts to develop land options which demonstrate how the Trusts can maximise their returns from the disposal of surplus land assets. The example is illustrative of the significant difference in return that can be achieved through the proactive marketing and selling of surplus land. Read more about our land promotion and development services.