Watchdog says NHS Property Services was ‘set up to fail’

The Public Accounts Committee has criticised HM Courts & Tribunals Service for falling behind on ‘critical reforms’.

NHS Property Services was “set up to fail” and created with “a muddled objective”, according to a new report from The Public Accounts Committee.

The watchdog, which scrutinises the value for money of public spending, has also called out the organisation on the fact that 70% of its tenants still do not have rental agreements.

NHS Property Services is a private limited company wholly owned by the Department of Health and Social Care.

The PAC said: “Without these agreements, it is very difficult to run an effective property management company and provide value for the NHS and taxpayers from the £3.8bn estate that it was set up to manage.

“The lack of rental agreements has led to many bills being disputed, outstanding debt has almost tripled to £576m in March 2019, and £110m of debt has been written off in the last five years.”

It has requested The Department of Health & Social Care set out a clear timetable over the next two months for NHS Property Services to agree tenancy details with all tenants by July 2020.

PAC chair and MP Meg Hillier said: “NHS Property Services was gifted valuable local assets when the NHS was reorganised. It can neither make its own decisions about the future of these public assets, but nor does it always engage well with local stakeholders.

“It lacks the powers to run its £3.8 billion portfolio of properties effectively. It is unacceptable that the majority of its tenants, including health centres and GP surgeries, have not signed rental agreements. The department must take urgent action to fix this system which does not serve the taxpayer or local health bodies well.”

An NHS Property Services spokesperson said: “We welcome the PAC’s report and recommendations. The report focuses on the legacy issues inherited by NHS Property Services such as the absence of formal rental and service agreements, and rightly identifies that these issues must be resolved for NHSPS and its NHS partners to reduce billing issues and recover income.

“We have applied our property expertise to invest £447 million upgrading, maintaining and developing new NHS facilities, and disposed of 410 properties declared surplus, raising £347m by March 2019. All capital receipts received from NHSPS properties are reinvested back into the NHS estate. As a direct result of releasing land and buildings the NHS no longer needs, we have enabled provision for c.6000 housing units to be developed.

“We are committed to working constructively with the Department of Health and Social Care, NHS England/Improvement and other NHS partners, to develop a joint action plan to address these recommendations.”

Separately, PAC has also criticised HM Courts & Tribunals Service (HMCTS) for falling behind again on “critical reforms”.

It said: “HMCTS is now three years into its ambitious £1.2bn programme to modernise the courts, which plans to change the way people access justice by digitising paper-based services, moving some types of cases online, introducing virtual hearings, closing courts and centralising customer services.

“We last looked at the programme in mid 2018, and reported that we had little confidence that HMCTS could deliver its ambitious plans within its timetable. Although HMCTS responded to these concerns and extended its timeline to seven years, it is still struggling to deliver all it promised.”

PAC added that many of the concerns it had previously raised on the reform programme have “not been addressed”.

Hillier added: “HMCTS’ ambitious modernisation programme continues to slip despite an extra year added to a much extended timetable, while the revised schedule appears over-optimistic.

“HMCTS must ensure that further reforms, particularly those that include closing more courts, do not mean citizens lose access to justice which would undermine public confidence in the fairness of the justice system.”

PAC recommended that HMCTS writes to the House of Commons once it finalises its next business case to set out proposed alternative arrangements if plans cannot be achieved within current timeframes, “including what projects could be eliminated, reduced or delayed if reforms come under further pressure”.

https://www.egi.co.uk/news/nhs-to-launch-wework-style-open-spaces-service/

To send feedback, e-mail anna.ward@egi.co.uk or tweet @annaroxelana or @estatesgazette