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NHS Property Services now set to sign contracts worth £3.1m a year for 12 Devon community hospitals

Friday, 01 July 2016 4 Comments by Claire

The government’s NHS limited property company is now set to take over 12 community hospitals in Eastern Devon this December, after signing contracts in October, it was revealed at a briefing for health and wellbeing scrutiny committee members last Monday (20 June).

The income to NHS PS from the 12 hospitals will be £3.1m a year.

Alan White from NHS Property Services attended the briefing along with Martin Sheldon from Northern, Eastern and Western Devon Clinical Commissioning Group (NEW Devon CCG).

Mr White told councillors that the private company, which is wholly owned by the secretary of state for health, will sign the contract to take over the 12 community hospitals, including Ottery St Mary, Sidmouth, Seaton, Axminster and Exmouth and Budleigh Salterton, on 1 October.

In May, around 200 people gathered to protest against the company taking over Ottery St Mary Hospital and charging rents at market value, despite the significant deficit in the Devon NHS.

The transfer had been set to take place last month.  The delay we were informed, was due to ongoing discussions over the current maintenance of the hospitals.

He said the transaction would be complete by December, at which point the hospitals would transfer from the ownership of Northern Devon Healthcare Trust, to NHS Property Services.

Councillors were told that charging market rents to the local NHS, which the company will do from the property transfer date, helps the NHS understand the true cost of occupancy.

I asked what market rate the CCG would be charged by NHS PS.

Alan White replied that the figure for 12 community hospitals was £3.1m a year.

Councillors await a rental cost breakdown for each community hospital.

I asked what would happen if the local NHS (which is in debt to the tune of around £40m) couldn’t pay the rent.  Martin Sheldon replied that the difference in what was being paid currently to maintain the hospitals and what NHS PS would charge, was not significant.

I asked what this figure was and am awaiting a response.

I said that some people in other parts of the country had reported that NHS PS had taken over their hospital buildings and were taking rents but not maintaining the buildings.

I asked what the annual rent income was for the community hospitals NHS PS owns compared with the annual maintenance bill.  I am awaiting this information.

Mr White insisted that the hospitals would still remain the property of the NHS, despite now being wholly owned by a political postholder.

I asked about Budleigh Salterton Hospital which has been closed for two and a half years after the decision was taken to shut its beds and turn it into a health hub.

We were told that the situation had not been helped by the transfer (from the local NHS to NHS PS).

We were also informed that Budleigh Salterton Hospital’s League of Friends (a charity) is taking on 70 per cent of the lease, with the NHS taking on the remaining 30 per cent.

This model is unlikely to be able to be replicated elsewhere due to affordability. And in any case how is it morally right that a charity pays the majority of commercial rent for a hospital building?!

I am anxiously awaiting a paper due out later this month from the Success Regime, the government taskforce parachuted in to dramatically reduce the health service deficit in Devon.  Significant cuts to services are expected. 

Four community hospitals in south Devon are set to be closed and sold off.

Comments

1. At 09:31 am on 02th Jul Paul F wrote:

Claire

Can you remind us what Hugo Swire said about rents?

Paul

2. At 07:59 pm on 02th Jul Michael Stott wrote:

For months we’ve been told that with a Brexit vote there would be £350million extra per week for the NHS.  Well there was the Brexit result.  Isn’t it an irresponsible waste of resources to continue with the planning for cuts?  Or are the Civil Servants as doudtful about the’ outers’ promises as I am ?

3. At 11:40 pm on 04th Jul Sandra Semple wrote:

http://www.hugoswire.org.uk/news/blog-are-our-community-hospitals-safe

4. At 04:12 pm on 15th Jul Chris Wakefield wrote:

‘‘It has been made clear that when NHS provider Trusts own properties like community hospitals (that used to belong to the Primary Care Trusts before the 2013 health reforms), it can be a disincentive for investment as the Trusts do not know if they will continue to own the assets if they lose their service provision contracts. The properties need long-term security of ownership, and this will be achieved by transferring ownership to NHS Property Services.’‘

This is what Hugo said about the transfer of our hospital to NHS Property Services on his blog of 26th May this year. He presents the problems caused by the intrusion of the market in (what was) a publicly owned health system, as cause for yet further intrusion. Lets get clear what’s happening here: the medicine he prescribes to restore the NHS to ‘health’ is causing the patient to deteriorate, which in turn is interpreted as further evidence of its diseased public-sector condition rather than the effect of his medicine. Thus the new diagnosis calls for stronger doses of the same medicine - further marketisation.

The language he uses is indicative of the problem - a ‘disincentive to investment’ can only occur in a situation where an investor (usually a private interest) must consider a risk in putting his or her or its funds into a particular position. If Ottery Hospital was owned by the state, as it was under an earlier (less privatised) incarnation of the NHS, and was paid for, as it was, by everyone through taxation (and also in Ottery’s case by generous charitable assistance), then the risk disappears, because the ‘asset’ is no-one’s property - it is everyone’s property and cannot be ‘lost’ (unless the state loses it by transfer to the private sector). The long term stability of ownership is secured much more reliably than by Hugo’s suggestion to transfer it to NHS PS.

The National Audit Office (NAO) was asked to take a look at NHS Property Services in 2014, to check its suitability to look after our hospitals. Among may worrying features, the report includes the following on page 9…

‘‘Future ownership
1.9
There is currently no published strategy for the future ownership of the Service (NHS PS). The Department’s internal documents, however, show that it has considered different options. One is to split the Service into between 25 and 50 local organisations, which would be joint ventures between the Department and the private sector; another is a complete sale to the private sector. The Department plans to recruit an external consultant to devise a long-term strategy for the Service, and will ask the consultant to identify ‘a range of commercial options’. ‘’

The NAO report makes Hugo’s assurances that the hospital will not be sold off look pretty dicey to say the very least. If the government needs the cash and the ‘hub’ users can’t afford a commercial rent, NHS PS (or whatever private outfit (or outfits) might own our hospitals by then), will have little trouble deciding its not making enough cash, and flog it to a developer.

Until the Newspeak of Tory free-marketeers is properly eradicated from our national economic orthodoxies, the NHS and all similar public enterprises are doomed to the shrivelling effect of marketisation. Local authorities and public utilities have been the ideological target of hard-line Tory passions for decades, and the NHS in particular has been an edifice they have sought to undermine since its earliest appearance. They were unable to strangle it at birth because of its extreme popularity, and a grudging acceptance existed throughout the 1950s and early 1960s, but the pressure has never disappeared and the resurgence of free market thinking in the decades following offered a new illusion - a general social and economic fix-all theory that has become de rigeur among politicians almost across all parties. A role for markets does exist - it is an effective way to transfer goods and services, but only under tight regulation. As soon as Ottery got its first (official) market - in 1227, the rules of fair trading were broken, and regulation had to be put in place - against all the dodges and wheezes whereby markets can be misused to unfairly benefit some individuals above the rest. That’s human nature and it is obvious to common reason that they will always need regulating. Unfettered, they are a dreadful way to regulate social affairs. The crash of 2008 is surely evidence enough of a busted theoretical foundation to our economic practices.

Now that David Cameron is gone, we have to wonder if Hugo will retain his influence in government. Are his promises, made before Brexit, more or less likely to be respected at higher levels, or will an Austerity-Maxed Tory administration seek every penny it can muster to sustain its small-state, low-taxation prospectus? His ministerial job may disappear - he was a ‘remainer’ after all, and we’ve no idea how he gets on with Boris. But whereas his prospects don’t really bother me that much, the future of our local hospital does, so one rather hopes that the much promoted £350 million per week that we shall save by exiting Europe will quickly become available to rectify Devon’s vast deficit on health spending and save out NHS local hospitals.  I hope to see Hugo in action on that score PDQ.

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