The Naylor Review, published in March 2017, laid out a new NHS Estates strategy to get rid of “surplus” NHS property.
It is a con trick designed to turn public property into private wealth. Here’s how it works.
The NHS estate is to be shrunk on the basis of un-evidenced Sustainability and Transformation Partnership proposals that self-care and care in the community can adequately replace hospital care.
The Naylor Review offers both carrot and stick to force those reductions through.
Disingenuously, Naylor states:
‘Even if the new models to be developed are fully successful, the STPs are likely to need the same level of hospital capacity (eg. in terms of bed numbers) as at present. The disposal of any estates must therefore not result in a reduction in bed numbers’.
But there is no reassurance that hospital capacity (bed numbers) will not be reduced.
‘Project Phoenix’ – Fire Sale of NHS Land Via Public Private Partnerships
Update 20 Nov 2019 The Health Service Journal reports that the government has cancelled Project Phoenix. In the 2 years since the government first announced the scheme, it developed into a proposal by government subsidiary Community Health Partnerships for Regional Health Infrastructure Companies. These would raise private capital for NHS infrastructure projects in a new form of public-private partnership. But a Community Health Partnerships spokeswoman confirmed to the Health Service Journal that Regional Health Infrastructure Companies have been “permanently cancelled”, after a government policy change. Because of “purdah” in the lead up to the General Election, the Department of Health and Social Care have refused to say what will replace Regional Health Infrastructure Companies’ capital funding.
In response to the Naylor report, the government is now getting ready to agree several major deals with private firms to sell £5.7bn worth of NHS land and property.
Six regional Public Private Partnerships will be created to sell off “ surplus” NHS assets. Tenders for the partnerships are expected to be published in the Official Journal of the European Union this summer and the Public Private Partnerships will probably go live later in 2017.
It seems that private funding could be used to achieve the best market price for the sales, for example by converting, renovating or demolishing existing buildings, or securing planning permission. This would maximise the price for the sale without needing upfront public investment.
“Surplus” NHS land and buildings could be sold to developers wanting to build homes, or to the private sector to be improved and then leased to local health services.
The profit from sales will probably be shared between the NHS and the private partners.
This plan, named Project Phoenix, has been produced by a team including PwC that the Department of Health set up in late 2015 to examine what role Public/Private Partnerships could play in implementing Sustainability and Transformation Plans and moving on from the Local Improvement Finance Trust. (This was set up in 2001 to involve the private sector in financing primary care, social care and community infrastructure.)
Channelling public money into Public Private Partnerships comes at a big cost. It means the state doesn’t have to finance and pay capital costs upfront – but we know from the disastrous Private Finance Initiative history that these projects end up costing much much more than publicly financed projects, because of ruinous interest and facilities management costs. We also know that they compromise safety and usability standards during the construction stage, because profit is put ahead of everything else.
Sustainability and Transformation Plans and the corporate gravy train
When the current West Yorkshire & Harrogate Sustainability and Transformation Plan leader Rob Webster was still Chief Executive of the NHS Confederation he put his name to a Report: Capital, capacity and capability – Independent sector providers helping to develop a strong Sustainability and Transformation Plan.
The NHS Confederation represents organisations working in the NHS, and these include the NHS Partners Network – a powerful and influential lobby group of private healthcare companies which is at the heart of the corporate rip off of the NHS and a trustee on the NHS Confederation Board.
Rob Webster’s NHS Confederation report announced:
“[Y]our partners in the independent sector can provide vital support as STPs are developed: providing crucial access to capital, capacity and capability and helping to make local services sustainable.
The STP development process is a great opportunity to strengthen and broaden these partnerships and leverage the capital, capacity and capability which the independent sector offers.”
Government’s public spending cuts mean shortage of capital for new buildings
The proposed “reconfiguration” of Halifax and Huddersfield Hospitals needs £300m capital spending – according to the Pre-Consultation Business Case, or £274m according to the hospitals Trust Chief Exec at the June 2016 public consultation meeting in Huddersfield.
The total West Yorkshire and Harrogate STP capital spending ask is around £732m.
Because of the government’s decision to cut public spending, there is a great shortage of capital to pay for these new buildings.
A report to NHS England’s 15.12.16 board meeting said:
“Capital is very tight over the next few years; STPs’ requests exceed what is available.”
The report also said NHS England and NHS Improvement would review all STP capital requests and that funding would be available for:
“strategic schemes that are essential for unlocking local improvements and efficiencies”.
A BMA report confirmed that 36 of the 44 Sustainability and Transformation Plans between them required £9.5bn of capital funding but there is nothing like that money available.
Naylor review recommends quick NHS estate sales to generate capital funding
The Naylor Report says that “property disposals, private capital (for primary care) and from HM Treasury” could fund the estimated £10bn STP capital requirements, £5bn backlog maintenance and a similar sum likely to be required to deliver the 5 Year Forward View.
However money from “property disposals” could be diverted into running costs and disappear that way. Jeremy Hunt has recently made it clear that the practice of diverting capital to running costs will continue up to 2020.
The Naylor carrot: wasteful incentive for fast NHS estate sales
The Naylor report proposes that the government should match the amount of money from quick NHS land/estate sales, effectively doubling what the selling NHS organisation receives.
‘a time limited offer, with a fixed funding pot and allocation on a “ first come first served” basis’,
This wholly inappropriate and wasteful incentive subverts the NHS organisations’ duty of care to make sure that any sale realises the full value of the land. These assets belong to the people and their exploitation should be in our best interest; but the offer of extra government funding for rapid sales would benefit private investors at the expense of the public.
Because a fast deal could generate twice the income, any purchaser slow to offer more money would put NHS staff in a bind – they would have to decide whether to go for the best deal with the purchaser or to speed up the process to get a ‘double deal’ from the government.
NHS managers must not be placed under pressure to sell at an undervalue, causing financial loss to the public, merely to meet targets for unrealistic NHS funding cuts.
Rather, if this extra ‘incentive’ money is available, it should now be added, unconditionally, to the budgets of the NHS organisations.
The Naylor stick: if the STPs don’t take the carrot, providers won’t be eligible to access public capital funding
The Review says providers should not be eligible to access public capital funding, if Sustainability and Transformation Partnerships (STPs) don’t move quickly enough in the Government’s direction with provider plans embedded in STP plans; maximum possible NHS estate disposals; addressing backlog maintenance; and delivering the 5 Year Forward View.
If the STP plans don’t hit targets and public capital funding is not given to providers could this lead to unnecessary risks for the community? If so, then who has responsibility for any harm caused, given that the Sustainability and Transformation Partnership has no legal status?
Accountable Care Organisations
The Naylor Review states that the creation of Accountable Care Organisations (ACOs) responsible for all health care for a given population would overcome the conflicts of interest that currently exist between the “advisory” role of STPs and the statutory responsibilities of NHS provider trusts. An ACO would incentivise acute providers to invest property assets in primary, community and mental health services, alongside private investors, and so enable more patients to be treated closer to home in line with the 5 Year Forward View.
But as an ACO becomes a stand-alone, standardised, “public-private partnership”, we will have lost the sense of any National Health Service.
With Naylor, we will lose a lot of our public assets and public wealth into private pockets.
I guess that’s the point.
Disinvestment opens NHS door wide to privatisation
Decades ago, psychiatric hospitals were sold off with the result that the police now frequently have to care for those in mental health crisis as there is nowhere else for them to go. Mental health patients may be hospitalised hundreds of miles from home, so acute is the lack of beds.
This disinvestment from NHS mental health services opened the door wide to privatisation – mental health services are now almost entirely colonised by private companies.
As the Devil’s Dictionary of Healthcare explains, the corporate gaze has now shifted to primary and community care.
“Community services are already pretty much under the control of private companies and it’s only a short step to link such services with primary care under the banner of integration.”
Money from the sale of “surplus” NHS estate will supposedly generate capital to pay for new buildings to house “community” services that are to provide “care closer to home.”
In fact it will often be care further from home since the services will be provided in huge GP super hubs rather than in your local GP practice.
Increasingly, new NHS properties designed and built for “care closer to home” are owned and rented out by Real Estate Investment Trusts, while Cornwall Sustainability and Transformation Plan proposes “innovative ownership models.”