Pioneering vacant space scheme to cut NHS estate costs

NHS Property Services has launched the Vacant Space Handback Scheme which will help commissioners to cut the cost of empty space in their buildings, leaving them more to spend on frontline care.

The new scheme comes in response to feedback from commissioners who want to reduce the cost of maintaining space that they decide is no longer needed for clinical services.

Although the costs of vacant space in the NHS are kept as low as possible, some costs are unavoidable because rent, business rates and some service charges remain payable. The total amount and cost of vacant space in the NHS is hard to calculate, but costs are estimated to be in excess of £10million a year on the NHS Property Services estate alone.

The vacant space handback scheme is an innovative arrangement which allows commissioners to pass the liability for eligible vacant space back to NHS Property Services (NHSPS).

The company will then use its expertise to re-use the space via re-letting, disposal or development to generate much-needed funds for reinvestment in the NHS.

John Westwood, Director of Asset Management at NHS Property Services, said:

“This is an example of how we are applying commercial property expertise for the benefit of the NHS.

“We know that commissioners don’t want to be spending their money on empty space, and now we can help them avoid some of those costs. This scheme will free up more of their budgets for frontline care.

“We can then use our property knowledge to put the space back into use as soon as possible, maximising the value of the NHS estate.”

Health Minister Lord O’Shaughnessy said:

“This scheme is an important part of our ongoing efforts to help the NHS make the most of its estates, delivering greater value for money and freeing up extra funds for patient care.”

To qualify for the scheme, space identified by commissioners must have been transferred to NHS Property Services as part of the 2013 health reforms and be:

• A separable and lettable self-contained unit above 100sqm
• Declared surplus to requirements by commissioners
• Vacant and free of debt
• Not a PFI
• In a property in which NHS Property Services has a legal interest

Handing back the vacant space also needs to be in line with the commissioner’s ongoing strategic estate plans.

If a property is eligible for handback, NHS Property Services takes on its future costs, following a one-off final payment. The payment is:

• six months’ accommodation costs for freeholds/long leaseholds, or three months if the building has been vacant since 1 April 2016
• 12 months’ accommodation costs for all other leaseholds, or six months if the building has been vacant since 1 April 2016

The scheme is endorsed by both the Department of Health and NHS England.

Commissioners can find out more about the scheme, including how to apply, here.