News

Good progress, with huge improvements to come

by Jeremy Peters

Morpeth Health CentreIn our first ten months we have made good progress as we start to tackle some of the challenges we inherited.

We have already made efficiency savings of around £30 million. This is important as every penny we save is reinvested to benefit the NHS.

For example, using our economy of scale, we saved £1.2 million by the single procurement of gas and electricity.

Since 1 April 2013 we have already sold or exchanged contracts on 34 properties, with a sales value of £24.9m which are surplus to NHS requirements, with a further 70 properties – all of which are currently vacant – identified for disposal in 2013/14.

For the following year we have identified more than 100 properties that are due for disposal as no longer suitable or required for NHS services. As well as releasing capital for reinvestment in the NHS, this will also save over £12 million a year in wasteful running costs of securing empty properties.

At auctions in February and March 2014 we expect to raise more than £10 million from the sale of surplus assets that are no longer needed for patient care and have previously been on the market, some of them for up to four years. This alone will save some £2 million in running costs. In the first two auctions all properties sold well above their listed valuations.

As well as releasing cash for the NHS, some of these sites offer prospects for much-needed housing. In all, our target is to generate 991 housing units over the next two years.

Tenants are also looking for better, more efficient properties. To date, we have been leading around 50 new developments or improvements for tenants.

Some of the areas where we are looking for improvements in the year ahead are:

  • How we bill tenants. Although we took the decision to bill tenants and customers based on the previous years’ agreements, we need to improve clarity.
  • We are working on a model lease, again to give tenants clarity.
  • We are improving our capital development programme, and we are looking at rates charges for tenants.

We know that the biggest improvements will come in the next two years, as we make best use of our national scale and purchasing power. We have set ourselves a challenging target of 20% efficiencies over the next three years. But is not just about saving money – we are investing in quality and sustainability to do things consistently better.