making creative use of the nhs estate
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Making creative use of NHS estatePeter MolyneuxCommon Cause Consulting4 June 2014
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• Land surplus to requirements
• Lodge with public land registry for 50 days
• If NHS or other public body interested then transferred or sold at NPV.
• If not marketing agent instructed and sealed bids sought.
• Bids assessed and received by District Valuer
• Highest bid accepted.
NHS land disposal process
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• Land surplus to requirements
• Foundation Trusts must operate within risk assessment framework.
• Decision may require approval from the Board and Council of Governors.
• NHS Trusts are entitled to keep proceeds up to £5m.
• Over £10m a business case is required.
• Up to £50m a business case for investment must receive NHS TDA approval.
• Over £50m DH and Treasury approval is required.
Rules on assets
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• Low financial risk
• Raises fixed capital sum quickly – for investment in new facilities
• Overage partly recoups uplift from development
• Trust loses equity in perpetuity
• Trust loses control over development and development of community infrastructure is difficult
• Early sale may reduce income and cost control needs to be robust to limit risk of overrun.
Release value of land at outset
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• Surplus land is exchanged for new mental health facilities.
• Financial certainty is delivered early – design certainty also needs to be delivered early.
• Trust is not distracted from core purpose.
• Financial failure of selected purchaser.
• Trust is very dependent on purchaser delivering on obligations
Cross-subsidy with single partner
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• Selection of right partner will share burden of optimised delivery of the whole
• Control maintained over timing and sequencing of the whole development and community development.
• Sales values maximised.
• JV structure could be used to incentivise the delivery of holistic best value.
• Income at risk from market fluctuations.
Single flexible partner, release in phasesusing open supply chain
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• Selection of right partner will share burden of optimised delivery of the whole
• Financial risks and workload are shared.
• Opportunity to engage or involve community partners in the consortium – which can also hide / reduce value of cross subsidy.
• Risk share may reduce outturn value to the Trust for cross subsidy.
• Delivery of best value in discrete elements may not deliver best value overall.
Consortium approach to whole of planning consent
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• Housing associations should have a clear service offer that is measurable, tradeable and marketable.
• Understand service transformation and CIP programmes and how they can help with them.
• Understand land disposal plans of local Trusts and appetite for disposals or JVs
• Understand proposals of local authority.
Making an approach