Background to the report

NHS Property Services Limited (the Service) is a company wholly owned by the Secretary of State for Health and Social Care. The Service was established in December 2011 as part of reforms to the health system to manage, maintain and improve NHS properties in England and facilities previously owned by strategic health authorities and primary care trusts. It began activity in April 2013.

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The Service aims to manage, maintain and improve NHS properties and facilities, working in partnership with the NHS to create safe, efficient, sustainable and modern healthcare and working environments. In addition, the Department of Health & Social Care (the Department) wanted the Service to be financially independent from departmental allocations and for the Department to be able to sell the company on the open market if desired. The Service has three main roles:

  • Acting as a landlord to manage the estate
  • Providing strategic estates management
  • Providing support and facilities management services

Its portfolio consists of 2,900 properties (about 12% of the entire NHS estate by floor space) with an estimated value of £3.8 billion. More than 60% of the properties are health centres, surgeries or clinics. It has about 6,950 tenants. Almost half of the Service’s tenants are NHS trusts and NHS foundation trusts (31%) and GPs (18%).

Content and scope of the report

In May 2014, we reported on the setting up of the Service and early performance. Following Parliamentary concerns about the Service, including slow progress in achieving its objectives and the level of bonuses being paid to its directors, this investigation builds on our previous work and sets out the facts about the progress the Service has made. It covers:

  • its main roles, the types of property and tenants in its portfolio, the issues it inherited and organisational changes (Part One);
  • performance of the Service against its main roles and financial objectives, and in particular acting as a landlord to manage the estate (Part Two); and
  • the Department’s oversight (Part Three).

Concluding remarks

The Department created the Service in 2011 to manage NHS property. To a large extent the Service has, albeit slowly, succeeded in improving the professional support required, collecting data, streamlining contracts and identifying market rental rates. However, more than eight years later, it still does not have the powers it needs to work effectively, as the Department originally intended, and the accuracy of bills is still disputed. In our view, too many NHS organisations and GPs seem to regard paying for their premises as optional, with almost £700 million either written off or still unpaid. The framework for charging for NHS property is not working effectively and the Department urgently needs to address the fundamental causes of this unsatisfactory situation.

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“The Service has slowly improved the way it manages its NHS properties. However, more than eight years after being created it still lacks the powers it needs to run its affairs effectively, and the accuracy of bills is still disputed.

“In our view, too many NHS organisations and GPs seem to regard paying for their premises as optional, with almost £700 million either written off or still unpaid.

“The system for charging for NHS property is not working effectively and the Department urgently needs to address the fundamental causes of this unsatisfactory situation.”

Gareth Davies, the head of the NAO

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Press release

View press release (26 Jun 2019)

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