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the government's response to the Naylor Review

26 February 2018

We wrote some time ago (on 26 April 2017) on the subject of the Naylor Review, being the report published by Sir Robert Naylor (NHS Property and Estates: Why the estate matters for patients).

Since that time there have been many debates and publications discussing the Naylor Review, but recently the Department of Health and Social Care has released a response to the Naylor Review entitled ‘The Government Response to the Naylor Review’ (we will refer to it in this article as 'the Response'). It was published in January 2018. The Response is an interesting read and seeks to address and comment upon the Naylor Review’s recommendations and highlight where the government agrees with the recommendations and seeks to implement them (or part of them), and additionally show where it is already tackling those recommendations and what it is doing about them.

In the introductory section the Response recognises that even if certain premises across the NHS estate were upgraded, "some of these older buildings would not meet the demands of a modern health service" (para 1.2, page 5). The Response also recognises that where property held is vacant or underutilised, it attracts additional costs (for example capital charges, maintenance and security costs) and that those costs divert money away from frontline services.

It is clear from the government’s response that they fully support the majority of the Naylor Review’s recommendations. Overall, the response thanks Sir Robert Naylor, and all others who contributed, for an "excellent review" (para 1.2 page 5).

In certain circumstances, they acknowledge that some of the recommendations have only been accepted in principal and they have chosen a different method of delivery to the one set out originally in the Naylor Review.

The Response sets out its sections very clearly and commences with an introduction followed by commentary on the vision for the healthcare sector (section 2), how they propose to deliver the vision (section 3), leadership and capability (section 4), national planning and funding (section 5) and finishing with a section on incentivising local action (section 6).

The Response also helpfully sets out in Appendix A the government’s response to the relevant review recommendations in the original Naylor Review. This is most helpful because it sets out the original recommendations (reminding us clearly of what they were) and the government’s direct response to those recommendations. It makes it easier to read and digest quickly without cross referring back to the original paper.

The Response also sets out in Appendix B details of the tranches of sustainability and transformation partnership (STP) capital funding allocations (which are stated to be provisional at the time).

Turning to the relevant sections within the Response, some particularly interesting and key points are as follows:

Section 3 – how we will deliver our vision

The Response notes that the NHS Property Board will oversee the delivery of the recommendations working alongside the Department of Health and all other relevant partners within the health system. The Response summarises the plan to implement the actions in three sections (see page 10), namely:

  1. building capability and capacity in strategic estates planning and management across the system
  2. how they will invest in estates transformation and align it with the wider sustainability and transformation agenda
  3. a proposal to enable local NHS organisations and STP’s to take a more strategic approach to estates planning and management.

In each of these three summary sections there are numerous bullet points which set out the actions which will be taken to implement those plans. Interestingly, the importance of STPs comes across very strongly with £2.6bn of the £3.9bn being allocated to support STP estates transformation plans (see page 9).

Section 4 – leadership and capability

In this section the Response talks more widely about the NHS Property Board which has been established, and explains the make-up of that Board (which it states includes senior representatives from the Department, NHS England, NHS Improvement, NHS Property Services and Community Health Partnerships and the wider government). Interestingly it is noted (at section 4.7, page 12) that estates policy and technical guidance to the NHS will be delivered on behalf of the NHS Property Board by NHS Improvement.

Section 4 also refers to sustainability and transformation of partnerships and references the One Public Estate programme ('the OPE Programme'). The OPE Programme has been running for some time but it is interesting that it seems only more recently, with the advent of STPs, that its existence and aims are being more widely noticed in the NHS and there is more encouragement to engage with this programme.

There is also recognition (section 4.21, page 14) of the loss of significant local estates expertise throughout the NHS over the last few years. It does appear that with further restructuring of NHS bodies and organisations over the last few years, there has been a significant amount of movement of NHS personnel and in our experience, the amount of NHS estates knowledge within local organisations has reduced over the last few years.

Section 5 – national planning and funding

The Response sets out (at section 5.3) that £2.6bn will be given to support STP’s in delivering transformation schemes. This appears to be the largest chunk of the £3.5bn of capital investment which has been committed for estates transformation and improvement. Interestingly, and very helpfully, Appendix B of the Response sets out the first two groups of schemes which are to benefit from the new STP funding. This is interesting reading and helps to give the reader a flavour of which localities will benefit from and commence the estates transformation work.

A further point of interest is that at section 5.15 of the Response, it is to be noted that STPs are encouraged to identify any projects which could make effective use of private financing (for example LIFT, PF2 and other public private partnerships). From our own experience, we have noted that such schemes have been very few and far between over the last few years but this clearly encourages consideration of using these types of schemes.

Section 6 – incentivising local ction

There is encouragement for local NHS leaders to look at how receipts from disposals should be used to fund priorities within their own STP footprints, with a suggestion that they should work together to identify estates investment requirements (para 6.3, page 18).

Interestingly in referencing the £3.3bn disposals target, it is to be noted that the Response suggests a large proportion of these proceeds will come from London (para 6.12). We can only presume this is because of the greater value of land and buildings in London which will ultimately heavily support the costs targets, compared to lower land values outside the capital.

Section 6 discuss further how the overage provisions contained with primary care trust (PCT) Transfer Schemes could be considered to disincentivise NHS providers from disposing of property, and there is a suggestion that a new arrangement could be introduced whereby NHS trusts and foundation trusts that hold those former PCT properties could apply to the Department to retain the overage sum to fund STP capital priorities (para 6.18). This is an interesting proposition, however, it is then separately noted that capital receipts from the sale of any properties owned by NHS Property Services will continue to be retained at national level and the investment directed to where it is considered most needed by patients (see para 6.19). Opportunities will potentially be available for clinical commissioning groups (CCGs) locally to apply for those funds for local investment via NHS England.

Again, the Response encourages NHS bodies to work with local government, as well as the Homes England, and take into consideration the One Public Estate programme to maximise opportunities (para 6.22). It is interesting to note on the One Public Estate website itself the examples of positive collaboration between various public sector bodies to maximise space utilisation and the proposal in the Response to support and use the OPE programme seems a very positive idea.

Appendix A: summary of government responses

Appendix A is found at page 24 and entitled 'Government Response to Review Recommendations'. It very helpfully and clearly sets out the original recommendations made by the Naylor Review together with the government’s responses directly below each recommendation. It sets out whether the recommendations are accepted or whether they are accepted in principal with some further discussion and/or amendment. In each one of the recommendations there is then a clear explanation of how these recommendations are to be taken forward and implemented.

One of the particularly interesting and much-talked about recommendations is recommendation 10, which required STP’s locally to be able to agree ‘stretching local targets’ for disposals and that a failure to agree those stretching local targets could result in access to funding being withheld. This recommendation is accepted and it will be interesting to see the discussion develop over what those stretching local targets for disposals could be.

In addition, recommendation 11 of the Naylor Review referred to ‘two for one offers’ whereby the public funds would match disposal receipts. This was a much discussed recommendation and one which has been accepted in part. The Response accepts that NHS trusts are not sometimes given the sale receipts from disposals of surplus land until such time as new capital developments need to be funded. To address this and encourage earlier release of unused assets, the Response suggests putting in place new arrangements which would allow NHS trusts to apply for the receipts in advance and draw them back with interest later where needed to fund agreed STP priorities. There is also the suggestion that where the Secretary of State would often require half of any profits from the sale of former PCT estate to be paid as overage (under the terms of the original PCT Transfer Schemes), that a new arrangement could be introduced whereby NHS trusts can apply to the Department to retain the overage sum to help fund STP capital priorities. This would appear to be the part which is accepted.

The Response however does not accept the review’s recommendation of a time limited ‘two for one offer’ (page 28).

In summary

Overall, the Response is a very clear and interesting read and very much welcomed in view of the original Naylor Review creating so much discussion. The Response will no doubt prompt further important discussion and debate between NHS trusts and other NHS bodies with regard to estates matters and how to continue to drive home costs efficiency and improve the estate from which our valued health services are delivered.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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