The pressure to release value from surplus land must be weighed against the risk of limiting future flexibility. The NHS, for example, faces this challenge as it seeks to optimise its estate, reduce costs, and reinvest in patient care, all while ensuring it can adapt to changing service models and population needs.
Principles for balancing disposal and future flexibility
1. Integrated strategic planning
- Data-led decision making: Use utilisation studies and data analytics to identify genuinely surplus land, while also modelling a range of future scenarios. This helps ensure disposals are based on robust evidence, not just current pressures.
- Stakeholder engagement: Early and ongoing engagement with system partners (ICBs, Trusts, local authorities) uncovers potential future requirements and helps avoid short-sighted decisions.
2. Phased and conditional disposals
- Phased disposals: Where there is uncertainty, consider phased disposals—selling part of a site now, while retaining options on the remainder. This keeps future pathways open if needs change.
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Overage and clawback clauses: Include contractual provisions that allow the NHS to share in future uplifts in land value or to reacquire land if strategic needs emerge. These mechanisms provide flexibility and protect long-term interests.
3. Scenario planning and risk assessment
- Scenario modelling: Regularly review estate strategies against a range of possible futures—demographic shifts, policy changes, new models of care. This ensures disposals are resilient to change.
- Risk mitigation: Identify and mitigate risks such as planning constraints, market volatility, and service transformation, ensuring disposals do not inadvertently undermine future service delivery.
4. Sustainable and adaptive estate management
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Retain core assets: Focus disposals on genuinely surplus or underused assets, while retaining core sites that offer strategic flexibility for future expansion or service change.
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Reinvestment: Ensure proceeds from disposals are reinvested in the estate to support modernisation and adaptability, not just short-term financial goals.
NHSPS in practice: Real-world examples
Chiswick Health Centre
The transaction structure provided for a joint venture to deliver a new health centre with increased service provision and flexible design for future adaptation. This enabled the release of surplus land for 55 affordable homes, nominated to NHS key workers (100% of first lets and 50% thereafter for a 60-year period).
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Northwood & Pinner Cottage Hospital:
The delivery of a new health centre, which meets current and future needs through a flexible design, was made possible through a short-term leaseback arrangement. This ensured capital receipt while supporting ongoing service delivery and managing planning transitions.
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Best practice from the sector
- Use of data analytics: Modern land management increasingly relies on data-driven insights to anticipate trends and inform both acquisition and disposal decisions.
- Sustainable land use planning: Integrate environmental, social, and economic considerations to ensure land use decisions support long-term community and organisational resilience.
- Stakeholder collaboration: Involve local communities, planners, and service users to ensure disposals align with broader needs and aspirations.
Conclusion: Striking the right balance
Balancing land disposal with unknown future needs is about flexibility, evidence, and partnership. By combining robust data, scenario planning, phased approaches, and protective legal mechanisms, organisations like the NHS can unlock value today without closing off tomorrow’s options.
If you’d like a more detailed case study or a template for phased disposal agreements, just let us know.
