New property scheme launched to cut the cost of empty space in NHS buildings

New property scheme launched to cut the cost of empty space in NHS buildingsA new scheme to help the NHS cut the costs of empty space in their buildings has been launched this week by NHS Property Services (NHSPS). Properties that qualify for the scheme must be deemed surplus to NHS requirements and may be re-let, disposed of or considered as a development opportunity. The new Vacant Space Handback Scheme comes in response to feedback from commissioners who want to reduce the cost of maintaining space that is no longer needed for clinical services.  The cost of maintaining vacant space is kept as low as possible, though some costs are unavoidable where rent, business rates and some service charges remain payable. The total amount and cost of maintaining vacant space in the NHS is difficult to calculate, but costs are estimated to be in excess of £10 million a year on the NHS Property Services estate.

This new arrangement sets out practical steps for NHS commissioners to pass on the liability for eligible vacant space to NHSPS. The initiative is endorsed by the Department of Health and NHS England.

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 expertise 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 NHSPS as part of the 2013 health reforms and be:

  • A separable and lettable self-contained unit above 100 sq m
  • Declared surplus to requirements by commissioners
  • Vacant and free of debt
  • Not a PFI
  • In a property in which NHSPS 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, NHSPS takes on its future costs, risks and opportunities 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 1st April 2016
  • 12 months’ accommodation costs for all other leaseholds, or six months if the building has been vacant since 1st April 2016

More information on scheme – part of the NHSPS’ work  to reduce costs, create a more fit for purpose estate and generate funds to reinvest in supporting improvements in frontline patient care – is available here:

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