HFC Briefing Note 4: Government Response to Naylor Review

The Government has now set out its full response to Sir Robert Naylor’s review of NHS property and estates, which was published in March 2017. Click here to read the full Naylor review.

Naylor Review

In its response, the Government stresses the importance of Naylor:

a landmark report, highlighting the challenge of making sure the NHS has the buildings and equipment it needs, but also the scale of the opportunity that the NHS estate offers to generate money to reinvest in patient care
We agree with his primary conclusion that the NHS must manage and use its estate more efficiently and strategically, whether by selling land and buildings that it no longer needs to deliver clinical services or using that land to develop new services in line with modern thinking or to provide housing for NHS staff

It argues that its response capitalises on those opportunities and in particular that they will support the delivery of the NHS Five Year Forward View. Click here to read the NHS Five Year Forward View.

Five Year Forward View

As a quick reminder, the Naylor Review highlighted the importance of developing a modern fit for purpose estate, releasing unneeded land for maximum impact, increasing efficiency and addressing backlog maintenance. It included seventeen recommendations covering capability, strategic planning and measures for driving more efficient decision-making. It advocated a national approach to master planning and increasing skills and capacity. It also put a cost on how much it could cost the NHS to tackle backlog maintenance and reflect local Sustainability and Transformation Plans (STPs) of some £10 billion, with key sources being property disposals, private capital and Central Government funding. It also highlighted the opportunities to connect better use of the estate with addressing key issues around housing, including for NHS workers. Naylor commissioned the King’s Fund to analyse the current strengths of estates strategies in the NHS. The King’s Fund identified a number of shortfalls – and that better use could be made of existing skills in the EFM community.

At HFC, we think that one of its most valuable findings was to stress the importance of making a robust connection between the estate and the services that it needs to enable and support including ensuring flexibility and safety, and one eye on likely changing patterns in the future.

You can read the HFC Briefing Note on the Naylor review here.

At the time of its publication, the Government welcomed Sir Robert’s review and accepted many of the key emerging recommendations. It set out its intentions to further develop an incentive scheme that was already in development, that would encourage more efficient use of the estate by guaranteeing that proceeds of sales would be available for reinvestment. It also accepted the need for clear leadership through a new NHS Property Board, and that more needed to be done to provide expert input into estates decision-making, to make the links with STPs more effective.

In its full response, it sets out what it has and is doing in response. The Government accepted most of Naylor’s seventeen recommendations and details of its actions and rationale – including details of how it has varied it response to some of the recommendations are set out here: Click here for the Government Response to Naylor.

Government Response to the Naylor Review

Future vision for the Estate

The review sets out the Government’s vision of an efficient, sustainable and clinically fit-for-purpose estate. It defines this as one that:

  • Provides a modern estate able to deliver the Five Year Forward View, including new types of models of care
  • Ensures local strategic estates planning reflects changing delivery models, and in particular shifts into primary care
  • Aligns with current and future clinical service strategies
  • Is proactive in making sure it maintains its assets and reduces backlog maintenance
  • Clearly identifies what it does not need or which is no longer cost effective to maintain or redevelop, and uses the proceeds to strengthen the remaining estate – and creating new homes
  • Has a robust understanding of the true costs and benchmarks
  • Develops its own in-house expertise, but utilises expert advice when it needs to

Three Key Themes

The Government groups its response under three main themes:

  • Building capacity and capability across the system by creating an NHS Property Board, investing in training and development, providing specialist support and guidance and improving the collection and use of data to enable STPs to make more informed decisions.
  • Investing in the transformation of the estate, including greater alignment with the Sustainability and Transformation agenda, including additional investment, creating a strategic plan of key capital investment projects over the next five years, and holding STPs to account for delivering capital developments. It also includes reviewing the rules on NHS Trusts’ use of capital funding with the intention of driving more effective maintenance.
  • Enabling local NHS bodies and STPs to take a more strategic approach by requiring estates strategies to be regularly updated, to be more comprehensive and to consider how best to “future proof” the estate.

This “enabling” strand includes a number of other important measures:

  • Emphasising that NHS providers should give greater prominence to the estates at Board level
  • Encouraging the NHS to work with local government and other public sector bodies to maximise the potential of collective assets as part of the One Public Estate programme
  • Supporting the disposal of surplus land – and including encouraging its use for NHS staff and other residential housing: this is a point that Lord O’Shaughnessy, the Minister responsible for the NHS estate, stressed that where there were opportunities for affordable housing, then NHS staff should receive priority
  • Refreshing the incentives by allowing NHS bodies to keep receipts from land sales, provided they are reinvested in local capital, and support the delivery of local priorities and STP strategies

Incentives for disposal

This latter is one of the few areas where the Government did not entirely agree with Naylor. The Naylor Review recommended that sale receipts should be used locally and suggested a form of “two for one” offer to incentivise land disposals by which public funds would match receipts achieved through disposals. Although the Government has accepted the need for change, it has only partly adopted the Naylor recommendations. Instead, the focus is very much on ensuring that all capital generated is used to help to deliver clear strategic aims set out in local STPs. NHS providers will be able to keep receipts from the sale of surplus land and property, provided this is reinvested to deliver local priorities and STP strategies. It did not adopt the two for one offer, arguing that funds should go to support achievement of STP priorities and that the best of these would secure higher levels of funding. However, the Government does intend to introduce new arrangements by which Trusts can release and “bank” an asset so that it can draw on the receipts achieved at the point at which it is ready to invest in new capital schemes. In addition, Trusts can apply to the Department for funds from the disposal of former PCT estate (previously, half went to the Department).

NHS Property Board

Overseeing all of this will be a new NHS Property Board. The Government reacted quickly to Naylor’s recommendations about the need for an overarching property board, to overcome the challenges that have arisen with responsibilities dispersed across many entities. As recommended, the Department has set up an NHS Property Board to provide clear, strategic direction and oversight to drive change. Chaired by a Departmental Minister, it includes representatives from the Department, NHS England (NHSE), NHS Improvement (NHSI), the NHS, wider Government and the two NHS property companies (NHS Property Services (NHSPS) and Community Health Partnerships (CHP)). The Department has rethought the status of the Board, and it will be within the Departmental structure, not an arm’s length entity. In contrast, the strategic estates planning team will be. Rather than merge the two NHS property companies, instead the Department will look to them to strengthen their performance.

The Board will also work with the Department of Housing, Communities and Local Government and the Government Property Unit to ensure that national policies support the disposal of unused NHS property. This means it will be acting as a bridge between the healthcare sector and policies on planning reform, the housing market and the wider public sector estate.

Guidance and support

More announcements are expected about the creation of a national Strategic Estates Planning service, that is expected to help connect capital decisions with STPs and other local priorities. The need for training and guidance are also flagged. NHS Improvement will develop material setting out policy and technical guidance on the estate. A key training need already identified is that of creating robust business cases.

The whole package is expected to work in tandem with the Carter programme on productivity – click here to read the HFC Briefing Note on the Carter Report.

How HFC can help

The messages from Naylor and the Government’s response are clearly about the need for robust and comprehensive estate plans, development control plans and strategic plans mapping the organisation’s direction of travel against its estate.

Those NHS bodies that have given careful thought to their existing estate and how they could strengthen its strategic fit with clinical care are likely to be in a stronger position to make the case for investment. Conversely, those lacking robust plans are not likely to see investment.

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HFC offers a range of services to support NHS bodies through our training partner Grovenbridge Academy, all of which are available at a 50% discount to delegates from Trusts that are HFC Members. Click here for more information.