News / Estate could release billions

The NHS could release £1bn by selling unused or underused estate and save £1bn a year by better procurement and standardising the cost of facilities management.

In its annual report on NHS estate, consultancy EC Harris said the service had continued to reduce underused or wasted space. Its first report in 2008/09 put the figure at more than 3 million square metres. This fell to 2.1 million in 2009/10 and is now down to about 1.9 million.

The report, Shaped for the future – reforming the NHS estate, said disposing of half this would release £1bn. Decommissioning facilities management (FM) services could then save £228m a year and further savings were possible as FM costs vary widely – primary care trust maintenance costs vary from £58.84 per square metre to £205.22. It added £1bn a year could be saved by reducing FM costs to the level of the best performers.

Report author and EC Harris health sector partner Conor Ellis welcomed recent improvements, but warned further improvements would be harder. ‘While clinical change is the biggest cost opportunity to the reform agenda, radical action is needed to unlock capacity from the estate,’ he said.

He added that most excess space is owned by foundation trusts. ‘It is therefore not accessible to the Treasury to dispose of. This means local collaboration is more important than ever,’ he said.