The Naylor Review and the role of estate in NHS service transformation

Jackie Hadwen, Senior Manager at Attain talks about the Naylor Review and what this means for capital planning and service transformation.

All too often we see estate as barrier to change instead of an enabler for change. This is naturally linked to the availability of capital. The constraints on NHS capital are well documented in the Naylor Review published on 31st March 2017.

“The general consensus is that current NHS capital investment is insufficient to fund transformation and maintain the current estate. We estimate that STP capital requirements might total around £10billion, with a conservative estimate of backlog maintenance at £5billion and a similar sum likely to be required to deliver the 5YFV.”

NHS Property and Estates – Why the estate matters for patients
Sir Robert Naylor for the Secretary of State for Health, March 2017

Can the recommendations in the Naylor Review unlock the barriers and allow estates to be the enabler for service transformation it needs to be to deliver the Five Year Forward View?

The Naylor Review is encouraging in stating that there will be, ‘a discontinuation of using capital to support current activity’. Capital should not just be about propping up aging estate but deployed more strategically to ensure that premises are fit for future purpose and aligned with clinical strategies and the implementation of new models of care.  Similarly encouraging are the recommendations calling for more integrated and pragmatic guidance including business case guidance.

The NHS capital budget has been frozen in cash terms over the course of this parliament. Approximately £1.2bn was transferred to revenue budgets in each of the last two financial years, and a further £1.75bn is expected to be transferred over the next three financial years according to the Health Service Journal.

In March 2017, the chancellor, Philip Hammond, announced £325m of capital funding to support the “strongest” sustainability and transformation plans spread over the next three years. This came with a commitment to review requirements for all STPs with a further announcement of a multi-year capital programme promised in the autumn.

Where then can we expect capital to come from? The Naylor review recommends three approaches to accessing capital:

  • Public Sector Capital
  • Land and Property Disposals
  • Private Sector Capital

Accessing public sector capital is likely to remain restricted. The Naylor Review recommends a 2 for 1 capital matching regime to incentivise disposals including the retention of disposal receipts for all sectors of the NHS and not just NHS Foundation Trusts.

The ‘Next Steps on the Five Year Forward View[1]’ references £100 million capital funding for ensuring clinical streaming at the front door of A&E. However other ‘asks’ likely to require some capital funding in this financial year include:

  • Rolling out Urgent Treatment Centres by Spring 2018
  • 150 to 200 Children and Adolescent Mental Health (CAMHS Tier 4) beds
  • Modernising primary care premises
  • Backlog maintenance

The focus on land disposals in the review is a welcome one. There is recognition of the dis-incentive to sell land by NHS organisations who currently cannot retain the receipts for redevelopment. The recommendation is that all organisations should be able to retain land receipts. The case for land disposals is particularly strong in London where land values are high. There is a risk if matching funds become available of some of the most disadvantaged area’s where land values could be low struggling to generate a level of land receipt necessary to support development.

Routes to private capital include the Private Finance initiative, Local Improvement Finance Trusts and the much heralded ‘Project Phoenix’ which the Naylor Review expects to be the route used to support capital development in community and primary care in the majority of cases. Project Phoenix is expected to go out to procurement for development partners to join the framework in the summer of 2017.

What is becoming increasing clear is that there isn’t a quick fix for NHS capital planning. In addition, timescales for planning and implementation may not match the availability of capital and consequently the need to be creative and innovative in developing and prioritising solutions across STP footprints is critical. The Naylor Review recommendations directly relevant to STPs include:

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How can Attain help?

Our approach to developing estate strategy at STP level is:

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It is important to acknowledge that at present STP’s have no statutory powers. The 2012 Health and Social Care act vests a set of statutory powers and accountabilities at individual provider or CCG level. This creates the potential for conflicting financial interests between what is right for an STP and what is right for an individual Trust.

At Attain we are able work with local estates and facilities partners and providers to drive strategy and bring expert analytics and modelling capability to support. Where business cases are required we have extensive experience in health planning and have drafted numerous capital business cases in accordance with both NHS England and NHS Improvement guidance. Most importantly Attain has an unrivalled depth of experience working across multiple organisations delivering new models of care and we are able to align new models of care and capital planning effectively.

The Naylor Review has the potential to enable more innovation in supporting service transformation and specifically if the recommendations are accepted, removes the current barriers to some NHS organisations retaining and using capital receipts. The challenges will remain stretching innovation and transformation beyond organisational boundaries and then utilising and accessing capital to enable that transformation in a timely manner.

To learn more about how the work that Attain does can support you, please contact gareth.hartley@attain.co.uk

Examples of our work

Hull 2020

Attain programme managed the mobilisation of a nine public sector partnership programme across the city. This included the establishment of an ‘estates collaborative’ that has gone on to consider becoming a ‘One Public Estate’ initiative. This involved:

  • Securing partner commitment to share detailed cost information and metrics.
  • Setting up governance arrangements including agreeing the terms of reference for the group.
  • Developing and agreeing the initial scope of work.

Outputs included:

  • A joint strategy between the NHS and Humberside Fire and Rescue Service to consider estate rationalisation and reconfiguration in East Hull culminating in the proposed development of a new Integrated Care Centre incorporating facilities shared between the organisations and supporting new models of care in which both are involved.
  • An agreement to transfer land between the Council and the NHS for public sector use.
  • An associated social housing development proposal alongside the proposed Integrated Care Centre.
  • Business case for Hull Integrated Care Centre.

Hull Integrated Care Centre

Client: Hull CCG

Capital value: £9 million

Attain roles: Programme management; health planning

Hull Integrated Care Centre commenced construction in January 2017.

Estates and Facilities Acute Trust Collaboration

Attain have recently led the development of a Case for Change considering the options for the: provision of Estates and Facilities services on a collaborative basis across five acute Trusts. The work included:

  • Analysis and reconciliation of detailed Estates and Facilities Management information to establish an agreed baseline.
  • Identification of options for future service provision including, out-sourcing, lead provider and the potential creation of an arm’s length body.
  • A detailed option appraisal including identifying the scope of the efficiency opportunities associated with each option.
  • Development of the Case for Change in a transparent manner including the sharing of all calculations supporting analysis.

The Case for Change identified indicative savings ranging from £45million to £252 million over 5 years for the most beneficial option.

[1] Next Steps on the Five Year Forward View, Department of Health, March 2017