Chapter 5: The NHS as a land and capital asset holder

Why this matters

NHS organisations often have significant physical assets that can be leveraged for community benefit. Though data are limited on the exact size of the NHS’s entire estate portfolio, it includes 8,253 trust and primary care sites across 6,500 hectares of land in England alone.

Anchor strategies involve thinking about how the NHS can manage and develop its land and estates to support broader social, economic and environmental aims – for example, by working with partners to support more high-quality, affordable housing and widening access to community spaces. This is especially important for lower-income groups, which tend to have poorer-quality housing and less access to green and community spaces.

Housing is an important driver of health; physical and mental health is affected by quality of housing, where it is located and how connected it is with the wider community. Estimates from 2011 suggest that poor quality housing costs the NHS around £2.5bn per year. Affordable housing close to workplaces can benefit staff, while helping to improve retention and offering environmental benefits.

Communities are also more resilient when people are connected through social networks, and opening NHS buildings and land for community use or supporting the development of green spaces can provide vital opportunities for social interaction. The NHS also influences the local economy through who it lets operate and conduct business in its facilities (such as stores and food outlets). By providing more opportunities for SMEs and working with organisations that promote social good, the NHS can further support community wealth development.

What do anchor capital strategies look like in practice?

Expanding community access to NHS property

  1. Enabling local groups and businesses to use NHS estates

Converting and selling estate for community benefit

  1. Supporting access to affordable housing or housing for key workers using NHS estate
  2. Working in partnership across a place to maximise the wider value of NHS estates
  3. Developing accessible community green spaces

Policy context

In many parts of the country, NHS estates are in poor condition, lacking sufficient buildings and infrastructure to meet clinical demands. The capital budget for investments in buildings and maintenance has declined in real terms between 2010/11 and 2017/18, leading to chronic maintenance backlogs and many NHS sites needing significant upgrades. The government did recently announce a £1.8bn short-term capital funding increase for the NHS in England, but this level of investment falls well short of what is required to bring NHS infrastructure to modern standards., These immediate pressures can make it difficult for the NHS to consider the wider value of its estate for local communities.

This context has put pressure on the NHS to raise capital through sales of land and assets, which have more than doubled since 2010/11. In 2017 the government published the Naylor Review to help develop a new strategy for NHS estates, which reinforced the need for the NHS to dispose of surplus land to free up more funding for capital. Financial pressures have meant that NHS organisations are sometimes incentivised to sell land and assets to the highest bidder as an opportunity to plug funding gaps.

At the same time, there is now greater emphasis on how unused or surplus NHS land can be used to widen access to affordable housing. The Naylor Review recommended that any NHS land that is sold should be developed into housing for NHS staff as a priority, and that 30,000 homes could be built on land belonging to acute estates. This would support broader government aims to accelerate the development of new housing across the UK and help achieve the Department of Health and Social Care’s aims of releasing NHS land to build 26,000 more homes by 2020. According to 2019 figures, NHS trusts have nearly 890 hectares of surplus land that could be sold or converted. Lack of affordable housing has compounded the recruitment and retention challenges currently facing the NHS, providing further impetus to use surplus estate to develop housing for staff, particularly clinicians.

However, ownership and control of NHS estates is complex, with important implications for how property can be sold and repurposed for community benefit. NHS trusts own most of the land they occupy, though this is not the case with general practices, which typically lease land from NHS Property Services (which owns and manages over 10% of all NHS estate), community health partnerships or owners outside of the NHS. This means that the opportunities to implement anchor strategies will look different across the sector, as accountability sits with different NHS organisations.

Moreover, since the 1990s, NHS organisations have used private finance initiatives (PFIs) to fund building development. PFIs allow the NHS to use private finance to fund capital projects, and usually mean that NHS organisations only obtain full ownership of the asset once payments have been completed (typically 30 years). This places further constraints on the ability of some NHS organisations to use their estate for broader community benefit.

Given the context, it is not surprising that we see fewer examples of NHS organisations adopting anchor practices on the use of land and estates compared with areas like employment. However, there are opportunities to think differently about how the NHS leverages its assets for social benefit.

Learning from practice

Expanding community access to NHS property

  1. Enabling local groups and businesses to use NHS estates

The NHS often has facilities that are not used at certain times (such as weekends), which means it can offer the space to community groups at little or no cost. This could make a big difference to small local charities and organisations that otherwise would have no access to space, and help enhance social networks locally.

For example, University Hospitals Birmingham NHS Foundation Trust regularly gives community groups free use of its buildings and facilities, allowing charities to host their annual conferences there. It is also looking into hosting free film screenings for the community in unused lecture theatres. Some trusts are also allowing local schools to use their space in the evenings and at weekends for arts programming.

Another way the NHS can support staff and the wider community is by offering childcare facilities on site, increasing the provision of childcare available in the local community. Sussex Community NHS Foundation Trust, for example, offers nursery places on three sites for NHS and emergency services staff, also reserving some places for local families.

As an anchor, the NHS can also support community development by leasing its retail space to local community businesses, thereby encouraging patients, staff and visitors to spend local. Some hospitals host farmers’ markets on trust estates that are open to the broader community. Cambridgeshire Community Services NHS Trust, after consulting with the community advisory group, is opting to work with a locally owned cafe rather than a large national chain while rebuilding a community hospital.

Some NHS organisations have reported that PFI contracts can restrict their ability to allow local businesses to sell on-site due to exclusivity clauses (although some NHS organisations have been able to negotiate access for local businesses on PFI-owned sites). For example, Southmead Hospital in North Bristol worked with PFI contractors to negotiate a weekly local farmers’ market on-site for patients and visitors using locally sourced produce. The trust had to demonstrate how the farmers’ market would not be in direct competition to existing shops within the hospital. To help make the produce more affordable for residents, the farmers’ market agreed to reduce profit margins to help expand access to healthy food within the trust and community. In exchange, the trust provides volunteers to help run the stall.

Converting and selling estate for community benefit

  1. Supporting access to affordable housing or housing for key workers using NHS estate

    Given the links between housing and health, there is a case for NHS organisations to ensure that their decisions around land use support the needs of their staff, the local community and, over time, contribute to reducing health problems from poor housing. Our interviews with stakeholders revealed that where such efforts are taking place, they are often motivated by more immediate issues of improving recruitment and retention, rather than part of an anchor mission to tackle inequalities:

    ‘We are absolutely struggling to recruit nurses because no nurses can afford to live and work in some areas, so it is in our interest to somehow build affordable housing, so you can subsidise nursing staff to live in the community, which means they’re not going to be struggling to recruit those staff.’

    Deputy director of strategy

    NHS England

    There are opportunities to align the NHS’s strategic priorities around workforce with broader social objectives, and some NHS organisations are explicitly prioritising social value as part of decisions to sell land. For example, when NHS Property Services sold the former St George’s hospital site in Hornchurch for £40m (the largest reinvestment in the NHS through sale of surplus land), 15% was allocated for social housing and 1.6 hectares of land retained to host a new community health centre.

    When selling surplus land, or redeveloping its own land, the NHS could more actively consider social value and the impact on the wider community – though doing so is not always straightforward. Stakeholders we interviewed expressed concern that most NHS land sold by trusts does not include affordable housing provision. A New Economics Foundation analysis of NHS surplus land sales in 2017/18 found that of the sites with planned homes, two-thirds will be unaffordable for nurses on an average salary. Even when there are provisions for affordable housing embedded in the sale agreement, it is not always achieved. For example, in West Yorkshire, a large housing developer committed at the point of sale to building 30% affordable housing on the site of Pontefract General Infirmary – a figure later reduced to 6% after declaring ‘financial unviability’. Strong accountability mechanisms are necessary to ensure that the full social value of NHS estates can be realised after sales are completed. NHS organisations will not always have full control over decisions on the use of their surplus estate for affordable housing, as local authorities often have the primary role. This makes developing partnerships ever more important in delivering these aims.

    Converting NHS land and facilities for community use can also require significant upfront investment that many NHS organisations cannot afford in the current financial climate. Stakeholders emphasised the overriding pressures in the NHS from system leaders and trust boards to sell any surplus land on the open market to the highest bidder, even if gains are short-term:

    ‘We’ve engaged with housing associations, we’ve engaged with primary care associations, all are very keen for us to promote and take forward plans to develop affordable housing. We find ourselves slightly thwarted by the centre… They are completely focused on today’s agenda as opposed to a more broad, long-term view.’

    Deputy director of planning

    Acute trust

    Housing associations, local councils and other community organisations often miss out on development opportunities as they have fewer resources than private developers to make competitive bids. However, interviewees said there is scope for the NHS to pursue alternatives to open market sale and enter into joint ventures with housing associations or councils, who may be able to help attract upfront investment for the development of housing and community spaces. This could help ensure that more of the NHS’s land benefits the community; for example, the NHS could sell land to or enter a leasing arrangement with housing associations, who then develop the land themselves and give the NHS a share of the rental income. However, the need to offset current deficits may severely limit these options. Interviews and learning from the grey literature suggest that, where this is possible, partnerships tend to be more successful if the housing association and the NHS have long-standing relationships and the housing association can make a clear financial case which directly benefits the individual NHS provider.

  2. Working in partnership across a place to maximise the wider value of NHS estates

    Beyond the sale of surplus assets, NHS organisations in some areas are working proactively with other anchors to help improve the local built environment to support community health and wellbeing.

    At the national level, NHS England’s Healthy New Towns programme is bringing together NHS providers, commissioners, local government and other partners to test how new housing developments can advance population health through 10 demonstrator sites. The NHS Long Term Plan committed to publishing guidance based on learning from the programme to help other local areas work together to develop healthier built environments. There will also be a new quality standard to incentivise future developments that support prevention.

    Cambridgeshire Community Services NHS Trust is negotiating with the Ministry of Defence and the local council, which own adjacent land, to manage the whole site as one plot on which to rebuild a smaller hospital and develop affordable housing. While the circumstances in Cambridgeshire are specific, with strong historical relationships, they highlight the potential for the NHS to partner across a place and to think differently around land use when opportunities arise. STPs and ICSs may provide further scope for the NHS to build these relationships and work more collaboratively to improve local planning and the built environment for health.

    If NHS organisations are to make the most of opportunities to use their estate for public good, then meaningful public engagement during the planning process is essential. This has been an important lesson from Healthy New Towns, which highlighted the importance of developing a shared vision with local people on how space can be used, and actively involving communities and residents in decision making on new developments. Partnerships and local stewardship can unlock this, particularly with marginalised and underrepresented communities, as local councils and housing authorities may have different relationships with the community and can be instrumental in forging new links.

  3. Developing accessible community green space

Given the positive associations between quality green space and health and wellbeing outcomes, some NHS organisations are exploring how they can create more accessible community parks. These green spaces provide a habitat for wildlife and space for physical activity, and contribute to improved health and wellbeing, particularly for people who otherwise would not have access.

Some NHS sites have existing green space that they have opened to the local community, and others are working to develop green space on unused land. For example, Bromley-by-Bow Centre – a GP practice and community charity based in a socially deprived area in east London – owns 3 acres of land that it has converted into green space, with a children’s play area, an allotment and garden. And at a primary care centre near Sunderland, staff worked with NHS Property Services and a local charity, Groundwork, to convert derelict space into a community garden and allotment. The space is now used to run a gardening course as part of a community mental health recovery programme.

Summary and implications for practice and policy

Taking a broader view of the socioeconomic value of NHS capital and estate can be difficult. The demands placed on NHS capital and lack of capital funding puts pressure on the system to immediately dispose of surplus land, typically to the highest bidder. While these pressures will continue, there are examples of good anchor practices where NHS organisations are supporting the development of affordable housing and other community assets and doing more to open their doors to community organisations. However, there is more that can be done.

Nationally, NHS policymakers can support local action by providing clear guidance and clarity to NHS organisations on how to embed provisions for social value into sales and monitor their implementation, and signal this as a priority.

At the local system level, NHS organisations can work with other public sector partners to develop joint strategies that optimise the use of public estate for broader social objectives, such as affordable housing and green spaces. This can also help with immediate organisational pressures around staff recruitment or retention.

For individual organisations, knowing how best to leverage land and estates for social value starts with a detailed understanding of existing estate portfolios to see what can be opened for community use or converted from surplus land. NHS organisations should build relationships with housing associations and local councils to pursue alternatives to open market sale. They should also engage in discussions with local residents to explore community needs for space, and how NHS land and estates can be used to meet those needs.

Practical resources to support implementation

Housing Associations and the NHS: New Thinking, New Partnerships (The Smith Institute)

Putting Health into Place. Introducing NHS England’s Healthy New Towns programme (TCPA, The King’s Fund, The Young Foundation, Public Health England, NHS England)

Supporting the Healthy New Towns programme (The King’s Fund)

Previous Next