The solution to the NHS funding crisis? Its property

The only way for the National Health Service to avoid years of deficits is for it to outsource its buildings to professional management companies

Dag Detter – The Guardian – Thursday 9 March 2017 11.30 GMT

The NHS was offered little relief in Wednesday’s budget. The proposed spending increase of £250m in social care the first year and then £130m the following two years will hardly cover inflation, let alone other cost pressures that the shortfall places on the health service. With such austerity the NHS faces years of underfunding, according to a King’s Fund report.

Yet the most promising avenue towards financial salvation is not even contemplated. The NHS is one of the country’s largest property owners; but also one of the least efficient property managers. Decades of debate have raged between those who want to keep it that way, and those who want to privatise or outsource property management to the private sector. The glaring third alternative has been left by the wayside – professional management of NHS property while maintaining public ownership but isolated from short-term political meddling.

The British Medical Association asks for a short-term £10bn funding increase, which would bring the NHS up to about 10.3% of GDP, still below spending in many other European countries such as Germany or Sweden. The government simply stalls, requesting NHS efficiency savings of £22bn by 2020. It refuses to clear the path towards professional NHS property management beyond the marginal initiative of the NHS Property Services, which manages only a fraction of the total portfolio.

The NHS in general, or each individual trust, has no detailed list of assets or even a basic understanding of the portfolio value and yield. Without a professional understanding of the extent of its real-estate portfolio, or recognising the market value, it lacks incentives to maximise value. Many of the buildings owned by the NHS are not even managed to maximise healthcare quality. For example, because of political pressures, opening new hospitals and health facilities is much easier than closing old, underused and inefficient NHS buildings, despite the fact that transferring services to more modern facilities will usually deliver better health outcomes.

NHS struggling to plug a £22bn funding ‘black hole’, says report

In 2014-15, NHS trusts in England had a net deficit of £843m, down from £91m recorded in 2013-14 and a £592m surplus in 2012-13

Read the rest of the article  in The Guardian


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